Date: Sat, 04 Jul 2020 20:58:57 +0000
To: Itay Tsabary <sitay@campus.technion.ac.il>
From: ZmnSCPxj <ZmnSCPxj@protonmail.com>
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Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>,
 Matan Yehieli <matany@campus.technion.ac.il>
Subject: Re: [bitcoin-dev] MAD-HTLC
Precedence: list

Good morning Ittay,


&gt; The analysis in our MAD-HTLC paper shows that when all players are rat=
ional (i.e., make the best decisions), and have the greater strategy space =
(which is easy to achieve, 150 Loc), the subgame-perfect-equilibrium strate=
gy (this is like Nash-equilibrium for dynamic games&nbsp;https://en.wikiped=
ia.org/wiki/Subgame_perfect_equilibrium) for even relatively-small fee is t=
o support the attack. Putting it in game-theory terms -- strategy "exclude-=
Alice-until-timeout-then-include-Bob" results with higher utility than stra=
tegy "include-Alice-Tx-now" (and by definition, "include-Alice-Tx-now" does=
 not dominante&nbsp; "exclude-Alice-until-timeout-then-include-Bob").

It may be helpful to think in terms of Prisoner Dilemma.


               | cooperate | betray
    -----------+-----------+---------
    cooperate  | -1, -1    | 0, -3
    -----------+-----------+---------
    betray     | -3, 0     | -2, -2

"include-Alice-Tx-now" imposes a greater cost on those playing "exclude-Ali=
ce-until-timeout-then-include-Bob" players, than the benefit that both mine=
rs play "exclude-Alice-until-timeout-then-include-Bob".

Basically, "cooperate" =3D=3D "exclude-Alice-until-timeout-then-include-Bob=
", "betray" =3D=3D "include-Alice-Tx-now".

One way to get around this is to invoke Iterated Prisoner Dilemma, but that=
 requires that miners can identify other miners and to be able to act accor=
dingly to how those other miners have acted in the past.
The entire point of Bitcoin mining is to allow strong anonymity of miners (=
not that this commonly happens in practice, given the habit of putting iden=
tifying information in coinbases).

Another way would be to have a higher system that polices its constituents =
and ensures that every miner plays "exclude-Alice-until-timeout-then-includ=
e-Bob", and punishes "include-Alice-Tx-now".
But that would be equivalent to a centralized cartel, and would be the deat=
h of Bitcoin anyway, at which point, all Bitcoin tokens will be worthless.


Regards,
ZmnSCPxj