But if the feed just provides sub-optimal data, or even starts providing outright lies, how does the scheme incentivize people to get back on the right track? It feels like once we're all pulling from Feed X, anybody who tries to deviate from Feed X is going to get spanked, even if Feed X is now full of shit.
I haven't read the whitepaper yet, so I'm pulling this out of my butt, but...what if we made a contract that said, "On February 20th, Feed Y will be more trustworthy than Feed X," where Feed X is the incumbent feed that you feel has been giving bad data?
What if there are 3 feed services and contracts were settled based on the feeds' majority opinion?
What if there were 10 services and contracts are settled on a supermajority of 80% of feeds? Otherwise, if you don't have 80% agreement, then the contract is a draw?
Like I said I haven't thought this through much. Maybe it's best to just dismiss my ideas.
The feeds aren't actually formally involved in the system as I understand it - they just have participants vote on each thing. What I'm saying is going to happen is that in practice everyone is going to pull their data from some kind of external data feed. Presumably they'll use whatever is simplest and cheapest, then they'll be stuck with that until it completely breaks...
This is actually a problem with a lot of situations where you are punished for getting out of line with the consensus. The market tends to settle on a winner early, usually the one that's easiest to get started with, then has a hard time switching off it, even when everybody can see that there are better options. MS Windows, PHP, the English language, Mt Gox, QWERTY keyboards, cities built on geological faults, etc etc etc. But this is built with a much stronger incentive to stay with the consensus than any of those, and actually deliberately discourages a coordinated attempt to switch to something else, so people may be stuck in the city even as they watch it burn...