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21
Outside Work / Great article on Futarchy by Ralph Merkle
« Last post by MattGoldenberg on June 08, 2016, 03:01:23 am »
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Advanced / Re: Market Empiricism
« Last post by MattGoldenberg on May 31, 2016, 03:17:18 am »
So to me this is an issue of "square peg, round hole".  As you noted, there's already a system in place (peer review) that tries to deal with this. The issue with peer review is that the peer reviewers themselves aren't being reviewed.  Trying to bring in a prediction market introduces additional liquidity problems, and we already know that journals won't be willing to solve those, given that most already don't pay their reviewers.

Crystal can easily be applied to this problem, by adding the notion of reputation to each peer reviewer, and having them provide probability densities of things like replication chance, retraction chance, and correction chance.  Reviewers with higher accuracy will gain more reputation, and be weighted higher in the future, so you don't need a highly populated market with lots of participants. You only need the few who have already proven they're well calibrated.  If you somehow do find someone to provide money, it need not be enough to provide liquidity to a prediction market. They can just pay what the information is worth to them, then it will be distributed based on the reputation of the peer reviewers after the prediction has cleared.
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Advanced / Re: Prediction Wish List
« Last post by MattGoldenberg on May 31, 2016, 03:04:41 am »
Private Decisions:
Job Title X Expected Average Salary for New Graduates in 4 Years
Area X Expected Change in Property Value in 5 Years
Area X Expected Change in Rent in 5 Years

Philanthropy:
Additional Money Invested X Expected Change in QALYs (as measured by someone like Givewell)


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Design / Incentives / Game Theory / Re: Paying the oracle
« Last post by zack on May 29, 2016, 01:42:26 am »
It sounds like Matt would prefer assurance contracts to dominant assurance contracts.
I am pretty sure that dominant assurance contracts will be easier to coordinate, and harder to censor.
Both types should be allowed.

I agree that the oracle doesn't need to participate in the assurance contract. It is for the purchasers to use.

The idea of everyone getting refunds for the price of their shares is interesting.
Augur is planning on doing this, so it is an idea we should explore. When the Augur oracle's result for a decision gets repeatedly challenged, the rep gets copied into 2 flavors. One flavor where the decision is true, and the other where it is false.
Is it actually safe to give everyone refunds at the current price? or can this be manipulated?
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Design / Incentives / Game Theory / Re: Paying the oracle
« Last post by MattGoldenberg on May 28, 2016, 10:54:57 pm »
Yes, this is the exact reply I had to Paul about the attack he mentioned, but I'll reply here instead.

I don't see this as needing to be solved by the oracle btw, outside of charging enough.  Industries will implement this as a fair trade contract - If everyone in their industry doesn't pay in to get the information, then all of the individual actors get paid back, and the information doesn't get into the blockchain. This stops any individual company an industry from getting an advantage over the others in that industry. 
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Can you walk me step by step of an example of how this works?  In my mind it works like this

1. Oracle R(Real) and Oracle P(Parasite) advertise their services.
2. A company pays Oracle R to get it Data S.
3. Oracle R gets Data S
4. Oracle P steals Data S.
5. A company now pays Oracle P because it's advertising cheaper prices and has good reputation.
6. Oracle P doesn't have information to give and is revealed as a fraud.

I see no way for this game to have an equilibrium of Oracle R's price going to $0.  Oracle P can only make their move after Oracle R has gotten paid, and Oracle R gets to set the price at which it gets paid.  If their are multiple companies getting the same information, it can simply set the price such that many of those companies must pay it.  The only way that this game has an equilibrium of $0 for Oracle R s if you switch step 2 to after step 5.

> Oracle P can only make their move after Oracle R has gotten paid

Wrong. I can say, "Regardless of how many people sign up with Blue Oracle, I (the red oracle) will charge $X and copy the Blue Oracle's answers". You can, indeed, move step 2 to after step 5.


> So firstly, a companies success isn't only dependent on how it pleases the users.

Correct. A much better definition would be "provides a sufficient return on capital employed".

If we distinguish between "flow trust" (restaurant) and "level trust" (bank), my contention is *not* that eliminating the need for "flow trust" has no value. I merely contend [1] that it has very very little marginal value, and [2] the process of removing this trust is abhorrently expensive (given how difficult it is to write secure smart contracts).

Thus, the ROCE of such projects is overwhelmingly unlikely to be sufficient. The opportunity cost of the programming labor alone is relatively astronomical.
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Design / Incentives / Game Theory / Re: A critique of paul's drivechain proposal (and parasite oracles)
« Last post by MattGoldenberg on May 25, 2016, 04:21:58 pm »
>The real oracle must work for free, if there exist any parasites. This is because the parasites can steal the labor of the real oracles, for free. So the equilibrium price is zero.

Can you walk me step by step of an example of how this works?  In my mind it works like this

1. Oracle R(Real) and Oracle P(Parasite) advertise their services.
2. A company pays Oracle R to get it Data S.
3. Oracle R gets Data S
4. Oracle P steals Data S.
5. A company now pays Oracle P because it's advertising cheaper prices and has good reputation.
6. Oracle P doesn't have information to give and is revealed as a fraud.

I see no way for this game to have an equilibrium of Oracle R's price going to $0.  Oracle P can only make their move after Oracle R has gotten paid, and Oracle R gets to set the price at which it gets paid.  If their are multiple companies getting the same information, it can simply set the price such that many of those companies must pay it.  The only way that this game has an equilibrium of $0 for Oracle R s if you switch step 2 to after step 5.

>All of these companies are considered incredibly successful. They delivered high quality products and services to users at unbelievably low costs and tremendous convenience. These companies gave people what *they* really wanted. You seem to want to give them something else, like Google+, which they really do not want.

So firstly, a companies success isn't only dependent on how it pleases the users. The success of it's business model is dependent on many factors, like partnerships with companies in the ecosystem.  Even if there aren't benefits to the users (which I'll argue there are in a second), there can be benefits to the ecosystem as a whole (which indirectly end up benefitting users).

From a partnership perspective, one huge advantage early on is that companies can credibly can commit to not locking down their data.  This is going to be huge in the next few years as knowledge graph and facebook graph start bullying their partners in exchange for access to that data (Twitter has already done this).  Note that there's no way to compete with these companies due to their network effect, unless you can credibly commit to not doing the same thing if the ecosystem switches to you.

>I don't really understand your Android Phone analogy. Many iPhone owners "jailbroke" their phones to install new apps,
Yes, but at huge risk to ruining their phone, and with an automatic void of warranty.  What this shows is that users WANT this behavior, but Apple is doing everything in it's power to prevent it.

>and the Google Play store moderates for content (as do the individual developers who write apps).
There's a single checkbox in android to allow you to download non-android content, because the users want it. If there wasn't, someone would fork android and make a version that had it. Google would then lose its advantage in guiding the ecosystem, so it's in Google's interest to add this checkbox (in contract to Apple, which doesn't have this threat of a fork).

Likewise, the Google play store exists as a curation mechanism, but (this is the important part) because Android is open source, the curation choices it makes have to be beneficial to the users and ecosystem.  If not, it's trivial for a Partner like LG to make their own store, and quickly get everyone to switch over because they're more fair.

Because iPhone is closed source, there's not this threat, and they frequently make choices that benefit them as a company at detriment to the users or ecosystem.

>Apps are constrained, by the operating system of the phone, and by the user's choices...one reason for this, is specifically to prevent the apps from interfering with the phone's core infrastructure or with other apps.

Agreed.

But in the closed source case, another reason is to protect the companies business interests by using monopoly and aggregation advantages to make decisions that benefit that company. Because of these advantages, it's far to costly for users or partners to switch to another platform, UNLESS there's a guarantee that this new platform won't end up doing the same thing once they have the same advantages. Right now, there's way to make that guarantee t in the case of data monopolies and network effects, unless you have a system like Ethereum.  Again, this is hard to go through in a forum post, and I think the article I linked to above makes the case more thoroughly.
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Design / Incentives / Game Theory / Re: Paying the oracle
« Last post by zack on May 24, 2016, 10:03:01 pm »
> Even if there are zero trades and zero trading fees, the oracle still gets paid to judge on the outcome.

Not enough.

You can set the funding target of a dominant assurance contract arbitrarily high.
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Design / Incentives / Game Theory / Re: drivechain
« Last post by zack on May 24, 2016, 09:58:45 pm »
> Mining power doesn't matter. A government sponsored blockchain could be the attacker.

Only by offering prediction market services to the public.

(Mission accomplished!)

The oracles would lie if they aren't paid enough.
What mission would a lying oracle accomplish?

Paying the oracle by some method other than trading fees is important, because eventually there wont be trading fees.
One method to pay the oracles could be a dominant assurance contract.
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> What I'm arguing is that you can't get the former without the latter.  In other words, people won't be able to start viable blockchain business without giving them access to everyone's laboratory.

You may be right about that. I don't think you are, but you might be.

If you *are* right, however, it will just mean that no one ever starts a research laboratory. Instead, people will start something like a lemonade stand. The result will be that decentralized oracles are simply impossible for everyone.

An biological analogy would be that, if cells cannot be forced to cooperate, we will never have multi-cellular life. We will just have single-celled life.

> Because the parasite oracle depends on the real oracle, the real oracle can charge as much as it wants.  They can force entire industries to make smart contracts that collectively pay for the information they need.

The real oracle must work for free, if there exist any parasites. This is because the parasites can steal the labor of the real oracles, for free. So the equilibrium price is zero.

> The real target is companies and industries who can ABUSE brand and trust through economies of scale and aggregation of users.  Amazon does this to it's suppliers, Twitter did this to it's datafeed partners, Facebook does it to it's users, Uber is starting to do this as well.

All of these companies are considered incredibly successful. They delivered high quality products and services to users at unbelievably low costs and tremendous convenience. These companies gave people what *they* really wanted. You seem to want to give them something else, like Google+, which they really do not want.

I don't really understand your Android Phone analogy. Many iPhone owners "jailbroke" their phones to install new apps, and the Google Play store moderates for content (as do the individual developers who write apps). Apps are constrained, by the operating system of the phone, and by the user's choices...one reason for this, is specifically to prevent the apps from interfering with the phone's core infrastructure or with other apps.

> So the miner judgement thing was just an aside - the real idea here was that no matter how good your forecasting is, it will fall EVENTUALLY to a black swan. Relying on prescreening for security is inherently a fragile system.

No forecasting is "required". If there are unforeseen problems, the sidechain is closed down. Given that this closing-down is inevitable, it is simply more efficient to try to anticipate problems. It is also futile to attempt attacks.

> This of course is entirely dependent on how far you granularize "something". As a reductio-ad-absurdum, you could use this argument to say that as long as an economy has a single company that could fail, the entire economy is considered fragile. 

Don't you mean "antifragile"? If layer 6 is made of fragile units, layer 7 might be antifragile.

> Over time, we'll figure out which types of walls work, and which walls still give you interaction with the entire ecosystem WITHOUT exposure to the entire ecosystem's risk.

That is what I have already figured out. It didn't take that long. : )

Assuming that "Cryptocurrency" is the anti-fragile layer, that would imply that the individual crypto-currencies are the fragile layer. So, you are arguing that we should try this experiment of yours, allow it to potentially destroy Ethereum and Bitcoin, and then later start up a new 3rd thing "SztorcCoin" which follows my principles, and have it outcompete the failed Bitcoin and Ethereum.

I don't think that money works that way.

Instead, my vision is that sidechain-systems should be the competitors. Bitcoin's 21,000,000 coin units can compete with Ethereum's ~whatever Ether units. If you think that Bitcoin's sidechains aren't good, start up your own Alt-chain with better sidechains.
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