Quote from: JeffYbarrondo on October 16, 2017, 03:21:43 PM

Quote from: FuzzyQuant on October 16, 2017, 12:58:14 PM

Another interesting aspect to consider is the meaning of "rationality" itself. Often times, you don't know if a behavior is truly rational until enough time has passed to prove it as such. Many things can be rationalized, which is where the trap lies.

For instance, let's say bitcoin ends up being a total fad for some reason in the future, was any participation in bitcoin rational? What would count as rational participation in bitcoin and irrational?

People forget the age-old 'it has to stand the test of time' and I think that applies in a lot of these digital economy cases. Usually, in everyday life, it's easier to judge rationality, as we all have 'life experience' and can make a good, educated judgement as to the outcome people will have if they undertake certain decisions. But for bitcoin, the most we can do is draw parallels to the current fiat economies and gold and whatnot and compare, however it will not be exact as it is a new 'game' on its own.

Time will tell, but I would caution against using 'rational' to describe a lot of the players (even those who vote for the main chain may not be voting out of rational motives).

Interesting topic!

I started this topic about Game Theory and the correlation to the new crypto economic world. It is my firm belief BitCoin will NOT be a fad for any time in the near future in fact you saying it is a possibility kinda tells me you don't know nearly enough about it. But lets entertain that idea:

The rational meantioned in Game Theory is not the definition you are giving it.

Rationality is have a preference order that is complete and transitive. That is the definition of rationality in a game-theoretical sense.

In economics and game theory, it is sometimes assumed that agents have perfect rationality: that is, they always act in a way that maximizes their utility, and are capable of arbitrarily complex deductions towards that end. -

So anyway. Im still learning a lot about game theory. I don't have perfect rationality but I would call the thought of calling BitCoin a fad happening in my lifetime irrational.

http://gametheory101.com/courses/game-theory-101/rationality/

Dude, relax... I specifically used 'bitcoin as a fad' as a hypothetical scenario to depict a game-theory limitation. I am not saying it will be a fad. In fact, if you read my posts, you will understand that I am a big believer in its potential to be the "king" and only survivor to any serious damage to the crypto-world.

John Nash, the father of game theory, said himself that "game theory may serve no actual purpose other than satisfying some intellectual exercise [paraphrased]." In other interviews later on in life, after he had really thought about his contribution, he equated it to "intellectual masturbation [his direct words]."

So, next time, before you go and attack others and make assumptions about what their beliefs are and say stuff like "kinda tells me you don't know nearly enough about it", go and remember that game theory has some serious limitations in understanding aspects of the world and even economics. It is very narrow and any serious investor will tell you that. Game theory gives you very limited advantage on the stock market, or more seriously established investment environments, where you are playing against big and professional players for the most part and which look at fundamentals vs. the perception of fundamentals - which game theory fails to address as it is always stuck in the 'perception of fundamentals'. As an example, are you rational? You took my hypothetical example so seriously that you assumed what my true beliefs were.

Bitcoin will win primarily because of its branding, what the technology has managed to create (by it being implemented more as a protocol than as a pure service) and by having come into existence at the right time in history. Don't let your game theory constructs pull you away from harder, real analysis of the world.

FuzzyQuant

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