The morality and game theory in Blockchain

Posted 2021-04-29 数字货币及美股GAFATA投资

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数字货币与美股GAFATA投资（shuzihuobihemeigu）

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https://medium.com/@Achilles_Zhang/the-morality-and-game-theory-in-blockchain-1e000351f0d9

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PART Ⅰ

Introduction

In the previous article, how to eliminate the EOS bribery? I emphasized the following opinions:

1、Firstly, It is technically difficult to distinguish the proxy voter、 Entrusted Investment clients and the BP shareholders. Because the design of the EOS token cannot allow to separate the vote rights with property rights. This prevents us from blocking bribery in terms of technical and commercial practices.

2、Therefore, we should think in different way, how to lead bribery elections rational and more conducive to ecosystem of EOS.

3. Extend the token locking period of BP selection, from 3 days to 6 months (or much longer). Give incentives to the community members, lead them to participate in the voting system. It is the best way to eliminate bribery from economic motivation.

4. When everyone finds that the cost of bribery is very high and the income from bribery is very low, there is no longer any interest-driven participation in the voting. Instead, the community members will spend more time to think, identify and choose which BP is more long-term benefit to EOS ecology.

Above all, from arbitration perspective to eliminate the bribery is high costs, we should try to lead it rather than to prevent it.

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PART Ⅱ

The morality in Blockchain

What I want to continue talking about today is the morality in the blockchain industry:

Continue to take the HUOBI pool as an example. If the HUOBI pool claims that all its BP’s revenues are used for the daily operation, which focus on developing technology. The return of HUOBI pool to the clients is derived from the quantitative trade and rental income (it’s not impossible, you can check my previous article). Ok, now, someone will ask HUOBI pool to disclose their shareholder details, beneficiaries, own funds, and financial statements. It’s a good idea. Even it’s much better to have an audit reports from accountants and law office to ensure the reliability of public information.

If HUOBI pool is required to do this, should the other BPs to do the same? As far as I know, except EOS LAOMAO had promised to be the non-profit BP and donate all the BP salary to the EOS ecological construction, none of others BP had ever made such a commitment. Even there is no BP ever publishes its own shareholder details, its own funds, beneficiaries, and financial reports until now. The BP information published in bp.json is very simple and cannot be trusted. The Provisional Constitution does not require any information publicity to BPs.

Some people immediately suggested that this should be voluntary. Of course, there is an old saying goes in Chinese that Do not do to others what you would not like to do. Therefore, in order to build a better community, can all the BPs publish financial and operation reports those have been audit by professional accountants and lawyers?

I think the possibility is very low. On one hand, not all BPs have the consciousness of LAOMAO, on the other hand, because the DPOS mechanism is kind of game, no BP would like to show all the cards on the table.

Can we put our hopes on BPs’ self-discipline and high moral standards? Is there any morality in the blockchain world? How many ICO project proved to be scams and have escaped with money? How many projects tokens have been off-line by exchanges? How many projects team、fund、VC、bigshots just disappeared? Where did their morals go? There is no way to protect your rights, if you complain a few words in the project’s official group, the administrator will immediately send you a plane ticket. Now the gamble game is so hot on EOS, is it moral in the real world? It is disgusting to talk about morality in the blockchain world. Again, no one can be asked to maintain a high moral standard in the blockchain world.

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PART Ⅲ

Game playing prior to morality.

“The so-called morality is not the “moral” in our ideal world, but an objective phenomenon, that is, morality is an interdependent relationship of interests in its essence.” Morality requires spontaneousity, essentially in line with your own interests. Don’t talk to me about Lei Feng, DA YU, Mahatma Gandhi, Mother Teresa, the saints who are completely selfless are always few.

Any game playing is cruel because it is a purely interest conflict. The major BPs are opposed to the HUOBI POO’s mining mode, which is conflict of their interests. The investors support the HUOBI pool is also interest related. One of the essential attributes of the blockchain is that Trustless, the POW of Bitcoin is a cruel mining incentive mechanism, and it does not talk about morality at all. You are in my interest, I will go with you, you are not in my interest, I will not go with you. The game mechanism is the basis of POW, POS, and DPOS. Both emphasize economic interests and vote with where they stand.

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PART Ⅳ

Rules is between game playing and morality.

If you know the Nash equilibrium theory, game theory assumes that both sides are rational. The result of rational people is that it is very likely that all parties will suffer losses. Therefore, after the full rational game, in order to achieve the long-term maintenance of the best balance of interests, everyone will sit down and make rules. We are now developing the EOS constitution to supplement some of the shortcomings that the EOS DPOS mechanism may still has, because it does not achieve the best balance of interest based solely on full game. Rules must be followed, and those who do not follow the rules should be punished. That’s why we have to set up the ECAF in EOS.

When the rules after the full game playing have been implemented, everyone will consciously abide by it, and on this basis, morality can be promoted.

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PART Ⅴ

Only game playing is feasible.

So back to the EOS bribery issue, we have three options:

Firstly, as I have already discussed above, from the perspective of human pessimism, it is impossible require community members to be conscious from moral status.

Secondly, from the rules making perspective, it’s also impossible to ask all the BPs to hire professional accountants and lawyers to audit and issue financial and operational reports. The reasons have also been discussed above.

Thirdly, it is a complete game. Since it is a game playing, there is no concept of bribery. It is entirely profit-driven.

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PART Ⅵ

Conclusion:

Some rules we can’t make, but some can be modified to improve the game playing environment. We should eliminate bribery from the perspective of economic motivation. For example, once we change the voting lock period to more than 6 months (or longer), then the proxy voters、Entrusted Investment clients and BP shareholders , these three identities will be integrated into one identity, the BP shareholders. This way will also eliminate any suspicions of bribery. 

When everyone finds that the cost of bribery is very high and the income from bribery is very low, there is no longer any interest-driven participation in the voting. Instead, the community members will spend more time to think, identify and choose which BP is more long-term benefit to EOS ecology.

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