Post
Topic
Board Development & Technical Discussion
Re: Elastic block cap with rollover penalties
by
DumbFruit
on 11/06/2015, 12:51:17 UTC
This is not the prisoner's dilemma table. The Nash equilibrium is the best possibility for both. When a player chooses S, he helps the collective but also helps himself selfishly. There is nothing anyone can gain by "defecting". Every miner chooses S because it benefits him, not because he has some sort of pact where the other miner does the same.
The defector does gain by defecting; They gain market share. This isn't a prisoner's dilemma, it's just the best way for a mining entity to out-compete the other. It doesn't make a lick of difference that they can make more profit (Split between the two) by cooperating over a long period of time by not leveraging a competitive advantage over that same period.
Market share and out-competing are means, not an end. The goal of a miner is to maximize his profits. A big miner does this by creating large blocks. Why would he care that the other miner also gets more profit? Is he jealous or something? Please clarify what it is exactly that you're trying to say...
Sure, but the defector gets more profits by capturing market share. The defector gets more profit at 90% market share even if total profit split between the two is higher by cooperating at 50%.

It really is very similar to a cartel, except that the mechanism for higher profits is different. The way the cartel falls apart is the same; The defector gains profit for itself by capturing a larger market share.