The Prisoner’s Dilemma of Anti-Governmentism in Bitcoin

Chapter 0 Introduction

Are governments naturally hostile to Bitcoin?

However, there are a large number of anarchists and anti-government elements in the Bitcoin community who believe that the government will naturally deny Bitcoin. Is this really the case?

Chapter 1 The Prisoner's Dilemma

The prisoner's dilemma is a scenario related to game theory. Here is a widely cited example to explain this term (the one quoted here is from Zhihu: https://www.zhihu.com/question/19955241)

Two members of a criminal gang (A and B) were arrested. They were completely isolated and had absolutely no way to communicate with each other. The police currently lacked evidence and could not convict them of the main crime they committed together. However, the police had some secondary evidence and could sentence them to one year each for a lesser crime. So the police proposed the following terms to each of them:

1. If both A and B confess to the crime, each will be sentenced to two years.

2. If A confesses and B does not, then A can be released and B will have to serve 3 years in prison (and vice versa)

3. If neither A nor B confesses, they will each be sentenced to one year.

The table scenario will be clearer:

Think about it for yourself. If you were A or B, what would you choose? Because you have no idea what your accomplices will choose. If you confess, you will either be released or spend two years in prison. If you don't confess, you will either be released or spend one or three years in prison. Obviously, confessing is more cost-effective. This is the choice that maximizes benefits and minimizes losses.

The ending is that both A and B will confess. The two prisoners are forced into a miserable dilemma by this game. There is a possibility of "I am good if you are good", but the result is "I am not good if you are bad". And this inevitable ending is the famous "Nash equilibrium point".

The current development of Bitcoin also faces a prisoner's dilemma to some extent.

Chapter 2: Some people in the Bitcoin community are stuck in the prisoner’s dilemma

Currently, Bitcoin faces a choice of expansion direction, one of which is to directly expand the chain, increasing the block size from 1M to a larger size. This route is a very simple and effective solution, but opponents mainly consider the hostile attitude of the government.

Those who oppose increasing the size of the block size believe that if the block size is large, the Bitcoin full node may be centralized, and the Bitcoin computing power may be further centralized. Then they believe that the government has a natural tendency to be hostile to Bitcoin. The only reason why the government has not yet eliminated Bitcoin is because it is decentralized and the government has no way to do anything. As long as it is centralized, the government will eliminate you in minutes.

For example, on July 11, BTCC translated an article written by a foreigner that clarified this idea:

Bitcoin is more like Starbucks, which the government has always wanted to shut down. It is precisely because it cannot be shut down that it will continue to exist.

Let’s analyze this decision-making process:

1. Small blocks can ensure the decentralization of Bitcoin (whether it can be decentralized or not is not discussed here, and I will write here based on the idea of ​​opposing on-chain expansion). Whether the government is hostile to Bitcoin or not, Bitcoin can survive. However, small blocks will limit the development of Bitcoin.

2. Large blocks have the potential risk of causing Bitcoin to lose its decentralization. If the government is hostile to Bitcoin, then Bitcoin is doomed.

3. If it expands into larger blocks and the government is not hostile to Bitcoin, then Bitcoin will thrive and its development will not be restricted.

Make a table as follows:

(Note: Whether large blocks will lead to centralization is not within the scope of this article. This article is just written along the lines of opponents)

Because we cannot know whether the government will be hostile to Bitcoin, the safest approach is to maintain Bitcoin as decentralized as possible, regardless of whether its development is the best. A classic prisoner's dilemma.

Chapter 3 How to solve the prisoner's dilemma - communicating with the government

The crux of the prisoner's dilemma is that the two prisoners cannot communicate, let alone establish a trusting relationship. The key to solving the prisoner's dilemma is to send effective and credible information to the other prisoner and establish effective communication.

Bitcoin has been involved in tens of millions of people and its market value has reached tens of billions of dollars. The government cannot ignore Bitcoin, and all links in the industry have begun to contact the government. BTCC has cooperated with the government many times, although their COO holds a strong opinion of small blocks. American entrepreneurs do more, and they will lobby on Capitol Hill. The US government has established a set of management bills, which are very strict, but not to kill Bitcoin. Moreover, the major American companies in the Bitcoin industry have obtained licenses issued by the US government.

The assumption that the government is naturally hostile to Bitcoin no longer exists. Entrepreneurs need to establish a positive and cooperative attitude, which is actually more conducive to the development of the ecosystem. On the contrary, if everyone has a prisoner's mentality, regardless of what the government thinks, they will start with the presumption of guilt, and I am ready for you to kill me anyway. This approach will make the government more suspicious of you, and the government will use the principle of presumption of guilt. As long as any Bitcoin company becomes big and prosperous, the government will knock on the door to collect taxes, check your accounts, and even mess with you. Abandoning the prisoner's mentality and establishing a cooperative mindset can make everyone's business safer.

The Bitcoin community undoubtedly has a large number of anarchist fundamentalists who are naturally hostile to the government and believe that a government composed of civil servants will inevitably be hostile to Bitcoin. These people are the earliest core personnel of Bitcoin, especially many core developers who hold similar views. The Bitcoin community also needs them, and their contributions and creativity are an important part of Bitcoin. We must also find ways to establish effective communication with them.

To be honest, I am not good at building relationships with others, let alone establishing cooperation with the government, especially on something as complex and financial as Bitcoin. This is difficult. I just write articles and express my own opinions. I cannot write substantive, constructive, and actionable methodologies. (Please forgive my verbal abuse)

Chapter 4 How to solve the prisoner's dilemma - building a broader social space

In Hong Kong police and gangster movies, the younger brother and the boss are arrested at the same time. The younger brother dares not confess the boss's crimes because he is concerned about the safety of his wife, children and mother outside. The boss solves the prisoner's dilemma by intimidation. We are civilized people and cannot use this method. Instead, we should use a more civilized method.

The legitimacy of the mainstream government in modern society is based on the recognition of the public. If the number of people who oppose Bitcoin is overwhelming, then the government's policy will definitely tend to eliminate Bitcoin. (It is a very regrettable fact that most people now hate Bitcoin, accounting for the vast majority.) But on the other hand, if Bitcoin can bring more people into its economic scope, the government's policy must be biased towards ensuring the development of Bitcoin.

No matter how powerful a government is, it still fears the people’s resistance. The power of the people is the best way to fight against a stupid government. In the btc.com APP, there is an article titled “True decentralization relies on wider user participation” which tells a thought experiment:

Which of the following scenarios is the most decentralized?

1. One million people running their own full nodes at home, and another one million unique Bitcoin users (roughly the population of a small city)

2. 10,000 independent full nodes, but 100 million people using Bitcoin (the population of a G20 country)

3. 10 full nodes, but all of humanity uses Bitcoin

In fact, the conclusion of the above experiment is very clear. The government is least likely to be hostile to the third scenario, while the first scenario is most likely to be hostile to government policies.

At present, Bitcoin is actually most similar to the first scenario. The number of people who love and use Bitcoin is small, and the population distribution tends to be single, mostly young people, programmers, and those with economic thinking, etc. If I were Bitcoin, I would not think this is a very ideal parasitic environment.

Get as many users as possible, as well as diverse users. Such a user group will create a better living environment.

Get as large and diverse a user base as possible. Once that happens, the system will need no guardians. The sea of ​​people will protect it.

Obviously, direct on-chain expansion is necessary to acquire more and more diverse users.

  Chapter 5 Conclusion

The best environment for Bitcoin to survive is to have a large enough and diverse user base. The vast ocean of people will naturally protect it.