Tragedy of the Commons - Revision history

Phantomcircuit: Proof of Stake does not work.

2015-07-30T21:00:57Z

Proof of Stake does not work.

← Older revision		Revision as of 21:00, 30 July 2015
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	The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. Miners will accept transactions with any fees (because the marginal cost of including them is minimal) and users will pay lower and lower fees (in the order of satoshis). It is possible that the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.		The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. Miners will accept transactions with any fees (because the marginal cost of including them is minimal) and users will pay lower and lower fees (in the order of satoshis). It is possible that the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.

	The Bitcoin protocol can be altered to combat this problem - one proposed solution ~~is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another~~ is [[Dominant Assurance Contracts]].		The Bitcoin protocol can be altered to combat this problem - one proposed solution is [[Dominant Assurance Contracts]].

	Another more radical proposal (in the sense that the required change won't be accepted by most bitcoiners) is to have a perpetual reward that is constant in proportion to the monetary base. That can be achieved in [https://bitcointalk.org/index.php?topic=7500 two ways]. An ever increasing reward (inflatacoin/expocoin) or a constant reward plus a demurrage fee in all funds that caps the monetary base (freicoin).		Another more radical proposal (in the sense that the required change won't be accepted by most bitcoiners) is to have a perpetual reward that is constant in proportion to the monetary base. That can be achieved in [https://bitcointalk.org/index.php?topic=7500 two ways]. An ever increasing reward (inflatacoin/expocoin) or a constant reward plus a demurrage fee in all funds that caps the monetary base (freicoin).

Xmrk at 22:05, 3 May 2012

2012-05-03T22:05:00Z

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	[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).		[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, but every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).

	The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. Miners will accept transactions with any fees (because the marginal cost of including them is minimal) and users will pay lower and lower fees (in the order of satoshis). It is possible that the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.		The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. Miners will accept transactions with any fees (because the marginal cost of including them is minimal) and users will pay lower and lower fees (in the order of satoshis). It is possible that the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.

Jtimon at 12:31, 12 March 2012

2012-03-12T12:31:50Z

← Older revision		Revision as of 12:31, 12 March 2012
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	The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another is [[Dominant Assurance Contracts]].		The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another is [[Dominant Assurance Contracts]].

	Another more radical proposal (in the sense that the required change won't be accepted by most bitcoiners) is to have a perpetual reward that is constant in proportion to the monetary base. That can be achieved in [https://bitcointalk.org/index.php?topic=7500 two ways]. An ever increasing reward (inflatacoin/expocoin) or a constant reward plus a demurrage fee in all funds that caps the monetary base (freicoin).		Another more radical proposal (in the sense that the required change won't be accepted by most bitcoiners) is to have a perpetual reward that is constant in proportion to the monetary base. That can be achieved in [https://bitcointalk.org/index.php?topic=7500 two ways]. An ever increasing reward (inflatacoin/expocoin) or a constant reward plus a demurrage fee in all funds that caps the monetary base (freicoin).

Jtimon at 12:31, 12 March 2012

2012-03-12T12:31:29Z

← Older revision		Revision as of 12:31, 12 March 2012
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	[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).		[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).

	The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. Miners will accept ~~transaction~~ with any fees (because the marginal cost of including them is minimal) and users will pay lower and lower fees (in the order of satoshis). It is possible that the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.		The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. Miners will accept transactions with any fees (because the marginal cost of including them is minimal) and users will pay lower and lower fees (in the order of satoshis). It is possible that the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.

	The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another is [[Dominant Assurance Contracts]].		The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another is [[Dominant Assurance Contracts]].
			Another more radical proposal (in the sense that the required change won't be accepted by most bitcoiners) is to have a perpetual reward that is constant in proportion to the monetary base. That can be achieved in [https://bitcointalk.org/index.php?topic=7500 two ways]. An ever increasing reward (inflatacoin/expocoin) or a constant reward plus a demurrage fee in all funds that caps the monetary base (freicoin).

	This scenario was discussed on several threads:		This scenario was discussed on several threads:

Jtimon: explain why fees will tend to zero

2012-03-12T12:24:38Z

explain why fees will tend to zero

← Older revision		Revision as of 12:24, 12 March 2012
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	[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).		[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).

	The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. It is possible the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.		The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. Miners will accept transaction with any fees (because the marginal cost of including them is minimal) and users will pay lower and lower fees (in the order of satoshis). It is possible that the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.

	The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another is [[Dominant Assurance Contracts]].		The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another is [[Dominant Assurance Contracts]].

Ripper234: fix template

2012-03-11T07:20:17Z

fix template

← Older revision		Revision as of 07:20, 11 March 2012
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	{stub}		{{stub}}

	[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).		[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).

Ripper234: Stub

2012-03-11T07:20:08Z

Stub

← Older revision		Revision as of 07:20, 11 March 2012
Line 1:		Line 1:
			{stub}

	[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).		[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).

Ripper234: Add Dominant Assurance Contracts

2012-03-11T07:16:03Z

Add Dominant Assurance Contracts

← Older revision		Revision as of 07:16, 11 March 2012
Line 3:		Line 3:
	The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. It is possible the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.		The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. It is possible the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.

	The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks.		The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks, another is [[Dominant Assurance Contracts]].

	This scenario was discussed on several threads:		This scenario was discussed on several threads:

Ripper234: Created page with "[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] s..."

2012-03-10T23:18:45Z

Created page with "[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] s..."

New page

[http://en.wikipedia.org/wiki/Tragedy_of_the_commons See Wikipedia]. In Game Theory, Tragedy of the Commons is a [http://en.wikipedia.org/wiki/Market_failure market failure] scenario where a common good is produced in lower quantities than the public desires, or consumed in greater quantities than desired. One example is pollution - it is in the public's best interest not to pollute, by every individual has incentive to pollute (e.g. because burning fossil fuel is cheap, and individually each consumer doesn't affect the environment much).

The relevance to Bitcoin is a hypothetical market failure that might happen in the far future when the block reward from mining drops near zero. In the current Bitcoin design, the only fees miners earn at this time are [[Transaction fees]]. It is possible the honest miners will be under-incentivized, and that too few miners will mine, resulting in lower [[difficulty]] than what the public desires. This might mean various [[51% attack]]s will happen frequently, and the Bitcoin will not function correctly.

The Bitcoin protocol can be altered to combat this problem - one proposed solution is adding [[Proof of Stake]] to the existing [[Proof of Work]] used to mine blocks.

This scenario was discussed on several threads:
- [https://bitcointalk.org/index.php?topic=67900.0 Tragedy of the Commons]
- [https://bitcointalk.org/index.php?topic=6284.0 Disturbingly low future difficulty equilibrium]
- [http://bitcoin.stackexchange.com/questions/3111/will-bitcoin-suffer-from-a-mining-tragedy-of-the-commons-when-mining-fees-drop-t Stack Exchange]

Currently there is no consensus whether this problem is real, and if so, what is the best solution.