[p2p-hackers] Bitcoin incentive on Kademlia networks

[James A. Donald]

On 2012-11-01 7:18 PM, CodesInChaos wrote:
> I believe there is a number of systems that can profit from monetary
> incentives. I'm mainly interested in TOR like anonymization/relay
> systems, but file sharing is another system where incentives would be
> useful. But getting it right isn't trivial.
>
> 1) Plain bitcoin doesn't support micro-transactions
> 2) Plain bitcoin isn't untraceable (essential for use in an anonymous system.

Need fully automated fractional reserve banks, which use bitcoin as gold.  
Accounts are, of course, public keys, banknotes are chaumian tokens.

> 3) You need to figure out an appropriate price. In the simplest case
> the uploaders simply send to the offer with the highest payment
> attached.

That just offloads the problem of price discovery somewhere else in the  
system.

Price discovery is hard.

Price discovery in micro transactions needs to be substantially automated - 
at both ends.  People will not invest the effort needed for manual price 
discovery.

Bad, incompetent, or buggy price discovery has killed every previous  
effort to solve this group of problems.

Price information is probabilistic, thus a price discovery mechanism has  
to support a full Bayesian model, recursive probabilities estimating the  
probability that the true probability is p, performing maximum entropy  
modeling.  This is the sort of work that gets very smart engineers hired  
at astronomical salaries by wall street.

> 4) You need to ensure cheating is unprofitable. In particular running
> with debt incurs a loss greater than the debt.
> 5) If you give incentives for uploaders/relays that can lead to
> perverse incentives for people who share metadata. For example if you
> manage to give a client only collaborating uploaders, those might be
> able to set a price far above market level.

This is a real life problem, for which there are real life solutions.  A  
friend tells me "As soon as they see your nose, the prices will go up by  
ten times.  Let me negotiate for you, and then you appear with the money."

He negotiates, then calls me in.  Upon seeing my race, some of the people 
he has negotiated with have fits at his lack of racial loyalty.

So, end users just have to get multiple independent sources of metadata.

And, to motivate them to get multiple independent sources of metadata,  
those that don't have to get scammed.



_______________________________________________
p2p-hackers mailing list
p2p-hackers at lists.zooko.com
http://lists.zooko.com/mailman/listinfo/p2p-hackers

----- End forwarded message -----
-- 
Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org
______________________________________________________________
ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org
8B29F6BE: 099D 78BA 2FD3 B014 B08A  7779 75B0 2443 8B29 F6BE