I Have No Idea What (Game Theory) I'm Doing

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We have recently been gifted the short piece "Providing Some Clarity on Bitcoin Unlimited's Financial Decisions" from the newly filled Press Secretary position of the venerable political organization known as Bitcoin Unlimited or, affectionately, Public Relations Unlimited. Only after I finished reading it and the laughter subsided, I realized this wasn't a satirical piece, but one written in earnest!

That fresh narrative in my head was so fascinating I felt the urge to shine a light on every instance where reason and a grip on reality were summarily hijacked by that very ordinary hominid instinct towards contending with each other and vying for political power! However, "brevity is the soul of wit", so I'll focus on the first error that caught my attention. Other interesting themes present in the piece including, but not limited to, "We're the Good Guys", "Hindsight is 20/20", "French Man Bad" and "The Worse, The Better" are also ripe for investigation but will have to be autopsied in later pieces.

Now this one needs a title, and it needs to be as divisive and clickbaity as possible, so I'm going with "I Have No Idea What (Game Theory) I'm Doing".

"I Have No Idea What (Game Theory) I'm Doing"

In the months leading up to November of 2018, two broad competing camps were about to participate in an iteration of a hawk-dove game: speeding their muscle cars towards each other, and whoever swerved first would lose. Being a fair-minded individual myself, I'll name these factions "Risk.\nFinance" and "Not Stupid.".

I will posit that, if the strategy of removing the steering wheel of your car, making sure your rival sees you throw it out the window and then hitting the gas is the optimal strategy to get him to swerve instead of you, then, PR Unlimited's actions were akin to a sweaty driver unable to get his hands off the wheel, visibly struggling to stop himself from turning even before the key is in the ignition, all livestreamed directly to "Risk.\nFinance" driver's dashboard in real time.

The fact that this was recently framed by BU as "Tried to stop the ecosystem from splitting" is merely the hilarious cherry on top of the stand up comedy cake.

But I digress. Why did they choose this ineffectual course of action? Do they not have Wikipedia at home?

For that, we need to take a look at the payout matrix in dove-hawk games that takes into account the value at stake - V -, and the cost of an escalated fight - C -, and THIS is where things get interesting:

Bitcoin Unlimited's article pretty pinky swears that their disparate investment between BTC and BCH has no influence whatsoever on their 100% commitment to Bitcoin Cash, but in fact, while V can be assumed to be more or less constant in most scenarios, the mismatch above has immediate consequences to C ! It tells us that BU knows that, in the event of a collision, they're in the seat with the BTC air bags, while anyone holding mostly or all BCH is guaranteed to get an impromptu plastic surgery, minus anesthesia of course. That's a strong hint to us that C might indeed be less or equal than V in their case.

Attribution-ShareAlike 3.0 Unported (CC BY-SA 3.0)

If that is true, we aren't playing a hawk-dove game at all, but a prisoner's dilemma. You know, that one where the only strong Nash equilibrium is mutual defection.

The Internet often says "Never attribute to malice that which is adequately explained by stupidity" so that's what we're going for, if only for high-ground-having points. Nonetheless, it becomes clear that PR Unlimited's painful lack of self-awareness is, at best, a huge gap in knowledge that hampers their ability to function cooperatively in what is essentially an anarchic space, and, at worse... well, we get these Reddit exercises in "Who are you going to believe in? Me or your eyes?".

Finally[1], one must reach the troubling conclusion that Bitcoin Unlimited's previous actions indeed not only failed at their stated goals, but were diametrally opposed to them, certainly contributing to the historical outcome of the "Risk.\nFinance" and "Not Stupid." game of chicken, i.e. a spectacular head-on crash nobody can look away from, even years later.

[Spoiler warning] In the epic - if somewhat on drugs - final book of Cixin Liu's "Three Body" trilogy , Cheng Xin, the empathetic and egalitarian-minded protagonist who had just before lost a dove-hawk game whose stakes were literally the continued existence of the entire human species, is taunted by the envoy of the rival alien civilization, who unflatteringly compares her to both Luo Ji, her predecessor who did not share the full extent of her sensibilities and had sat on the "driver seat"for the preceding 62 years, and Thomas Wade, a cold, calculating Machiavellian who attempts to murder Cheng Xin to take her place at the wheel, but fails:

"(...) “I’m leaving,” said Sophon. “Please convey to Dr. Luo Ji the deepest respect of all of Trisolaris. He was a powerful deterrer, a great warrior. Oh, and if you get the chance, also give Mr. Thomas Wade our regrets.”

Cheng Xin looked up, surprised.

“In our personality studies, your degree of deterrence hovered around ten percent, like a worm wriggling on the ground. Luo Ji’s degree of deterrence was always around ninety percent, like a fearsome cobra poised to strike. But Wade—” Sophon gazed at the setting sun behind the smoke, only a sliver of which now was above ground. Terror glinted from her eyes. She shook her head vigorously, as though trying to chase away a mirage in her mind. “He had no curve at all. No matter what the other environmental parameters were, his degree of deterrence stayed at one hundred percent! What a devil! If he had become the Swordholder, none of this would have been possible. This peace would have had to last. We’ve already waited sixty-two years, but we’d have had to keep on waiting, maybe for fifty more years, or even longer. And then Trisolaris would face an Earth equal to us in technology and power. We’d have to compromise.... However, we knew that humanity would choose you.”"

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[1] I am reasoning from the premise that, giving the "Risk.\nFinance" faction influence over the Bitcoin Cash protocol was unacceptable, given that the ideas they pushed were, well, not "Not Stupid.". This prior is, I believe, also shared by Bitcoin Unlimited's chief scientist, to his credit.

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Comments

Invests $30k in a PR campaign, is begging everyone to run a full node using their software, and is digging themselves a hole as to why they're permanently invested in BTC over BCH 32:1? Yes this looks like the best option for BCH leadership /s

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Yep.

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