Author: Jeremy Rubin 2022-10-16 17:35:54
Published on: 2022-10-16T17:35:54+00:00
In the Bitcoin white paper, the proof-of-work is introduced as a solution to determining representation in majority decision making. The honest chain with the greatest proof-of-work effort invested in it is represented by the longest chain and if a majority of CPU power is controlled by honest nodes, the honest chain will grow the fastest and outpace any competing chains. Satoshi claimed that for Bitcoin to function properly, a majority honest nodes are required but did not define what aspects of honesty are important for the network. Defining an honest behavior can create a higher utility system because most people are "law abiding citizens" who might not be short term rational. For example, miners would be interested in making sure lightning closes are "accurate" because increasing the utility of lightning is good for Bitcoin, even if it is irrational. It is unclear if relying on an honest majority assumption where the honest behavior does not include replacement if not requested would ensure the safety of 0conf given the potential of race conditions in the mempool.It is suggested that the assumptions of Bitcoin should be more tightly documented in practice and what those assumptions do in terms of properties of Bitcoin, as well as pathways to weakening the assumptions without compromising the behaviors users expect the network to have. It is important not to weaken assumptions that only seem local to one subsystem of Bitcoin if they end up destabilizing another system. In particular, things that decrease "transaction utility" for end users decrease the demand for transactions which hurts the fee market's longer-term viability, even if we feel good about making an honest policy assumption into a self-interested policy assumption.Bitcoin is specified with an honest majority assumption but also has a rational dishonest minority assumption over both endogenous (rewards) and exogenous (electricity) costs. Satoshi did not suggest that Bitcoin works with a rational majority assumption.
Updated on: 2023-05-22T21:45:12.678422+00:00