Quote from: Dorky on April 15, 2017, 02:06:36 PM

Quote from: iamnotback on April 15, 2017, 08:06:55 AM

The only way I can see that the fees won't rise egregiously on BTC on chain (with $trillionaire/$billionaire whales free riding on the rest of us) is if something can compete with Bitcoin such that the whales feel they are losing control of the blockchain (and eventually global) economy, and/or if fungible money can be removed as important from civilization.

You want people to point out your error.

Quote from: iamnotback on April 14, 2017, 07:48:36 PM

However, I think whales will end up demanding a kickback from miners for their transaction fees, so that miners can jack up fees on non-whales. Whales can make this demand because they can refuse to send their transactions to miners which won't deal. Yet non-whales can't make a credible threat, because miners who generally offered lower fees would end up losing hashrate relative to those miners who didn't defect from the fee market. Thus I think you will probably see miners colluding to extract the maximum fees that gouge non-whales.

If the whole thesis of a fee that gets too high for average joe to use bitcoin is based on whales colluding, then here are my arguments.

1. That scenario of whales ($billionaires, elites, etc) colluding will NEVER happen.
2. Humans (whales, $billionaires, $millionaires, elites, etc) are never rational. Forget about game theory. It works only on simplistic binary situation. Humans are scientifically documented to be far more irrational than rational in decision-making.
3. The whales ($billionaires, power brokers, shadow elites, etc) would be owning over 50% of all bitcoin ever mined. If miners give way to their "colludion" (pardon my English it's not my fault that English is a stupid language) by making the non-whales pay up, that is economical nonsense.
   1st, the miners are the gatekeepers. If the whales refuse to pay the fees, they can get the hell out from using bitcoin.
   2nd, if all non-whales are pushed into alts, leaving only the whales, then the whales will pay the fee. "Colludion" makes no difference.

The pareto effect of 80:20.
-> 20% whales own 80% of bitcoin.
   (whales pay 80% of total fee)
   (non-whales pay 20% of total fee)
-> The whales collude not to pay fee and push out non-whales.
-> If miners comply, they will force the 20% non-whales to make up for the 80% difference. This is economically impractical. The miners are not advantaged by complying.
-> If miners don't comply, they will still earn the fee as usual. The whales have no choice but to continue using bitcoin and pay their share of the fee. The miners are not disadvantaged by not complying.

Your reasoning/logic based on game theory is flawed/incomplete.

Note: Businesses make their profit from servicing the rich (those who can afford the price), not from the poor (those who cannot afford the price). This is valid throughout all economic activities.

A dialogue...
Whale: I am not going to send you transaction if you charge me fee.
Miner A: Where will you send your transaction?
Whale: To miner B.
Miner B: So you want me to NOT charge you any fee?
Whale: Yes.
Miner B: And if I refuse?
Whale: I will take my business to miner C.
Miner C: What now?
Whale: Okay, I pay my fee to you.
Miner A & Miner B: Get lost!
Whale: Well, at least I still pay.
Miner A & Miner B: Bluffer!

The next whale (whale #2) shows up...
Whale 2: Hi! I am here to make a deal.
Miner A: Fuck off and die if it's about free transaction.
Whale 2: Urmmmm...... no. I pay.
Miner A: Good.

With game theory it's not mainly about rationality, but how likely someone who want to get some reward from the game would act given this or that informations.

It works mostly for economic scenario, when there are interest engaged , and the only given is that the person want to make profits or "win the game" when all other actors are also willing to do the same.

It's a model to tell how likely a person is going to make this or that decision given this or that infos, and how the reward balance out the risk to decide on a strategy.

The higher the stake, the better it works, because it's very un likely someone would engage big stake without at least thinking twice to the potential benefits/loss.

Game theory are all about reaction to risk and unknown, it's not that much about rationality, but how a person can percieve his own interest, and the higher the stake, the better game theory will apply.

In this dialog btw you show very well the two interwinded games for whales & miners

To put in math term it would end with two equations

one that define the speculative value of the coin, what make the coin attractive to trader according to any strategy they choose, and what influence trader choice and what make the coin looking profitable for a trader/investor

and the other related to mining profitability, and what risk a miner is willing to engage for the reward

One third interest is user who wants to rely on the system to make a tx but he has zero power.

and putting then those two equation in relation you would see they share a certain number of variable with their own matrixes of probability that would push some of the lowest probability variable ( less likely behavior) to some constant in favor of the more important criteria on the variables they share, to maximizes the likelylness of the following of the protocol for mutual interest of the big speculative forces engaged.

Well just quick shot to lay put the idea on the big lines lol

And im pretty sure it's not even that hard core to model with game theories. But it also incorporate other constant like inflation rate and maybe other factors that are not purely speculative value and mining reward/risk.