Post
Topic
Board Altcoin Discussion
Re: So what's the deal with smart contracts?
by
Come-from-Beyond
on 13/05/2016, 07:39:55 UTC
Okay. I'm not much for game theory - I know only the rudiments - but I do know enough rudiment to figure out that the first-ever Bitcoin transaction (10'000 BTC for a pizza) presented a classic prisoner's dilemma situation. A has to send the 10'000 BTC to B and B has to pay for a pizza and send it to A. Unless both A and B co-operate, there's no transaction.

In this case, there's one trust-based outside input required. B has to be trustworthy enough to both pay for and send the pizza. There's also a trust-based inside input required: A has to send over the 10'000 BTC. And of course, if [C,D] or [D,C] is the outcome then the Defector walks away with a freebie. It has to end in [C, C], else there's no transaction with Bitcoin as a medium of exchange. 

I was talking about http://arxiv.org/abs/1311.0243