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A stronger case for voluntary investing in public works

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Written by   125
1 year ago

My previous post about how assurance contracts improve the situation of contributors and investors in public goods sparked some interesting discussion. Specifically, people asked: "What if you think a thing can get funded without you, and you can get to profit the most if you position yourself right?

To illustrate this thought, consider a simple assurance contract. We do not consider either barebones contributions nor dominant assurance contracts, as they are not directly relevant to the calculations here.

Your goal when considering whether to contribute, should always be moving from bottom right to top left. Assurance contracts simplify your considerations since you no longer have to worry about top-right.

"Wait, im_uname! Sometimes if I think others will cover it just fine, maybe I can get away with bottom-left!"

This is where you are wrong. You are especially wrong in cryptocurrency, a very young field where every imaginable thing on every facet needs people to work on.

Consider there are two projects, A and B. Someone else contributed to A to make it happen (arrow 1), you did not, and think you can get away with it: Congratulations, you are now in bottom-middle, and you seem better off! But wait...

You can profit even more by also contributing to project B where you can make a difference (arrow 2).

There will always be a Project B lying just ahead, where you can make a difference.

One does not simply run out of things to contribute to and make a profit.

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Avatar for im_uname
Written by   125
1 year ago
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Comments

Thank you

$ 0.00
1 year ago

Nice article

$ 0.00
1 year ago

This is the theory. Not that you probably care in the slightest, but, I totally agree. Sadly, without some kind of peer pressure (transparency over who did not donate), clear incentive or coercion, we get what we have had so far. Insufficient support. These articles may help, so thanks! I am not optimistic about the strategy we have been relying on working better for long after the initial extra interest in the idea. I believe the rising price is more likely to be a boost to funding.

$ 0.00
1 year ago

I'm sure u will like my posts , follow me, please have a look.🤗.

$ 0.00
1 year ago

One does not simply run out of things to contribute to and make a profit.

lol! so true.

$ 0.05
1 year ago

A key theoretical element is missing to understand what is happening.

Time.

Miners seem to want some present losses in favor of giant future profits. Businessmen know how to deal with this.

The world is 3D.

$ 0.00
1 year ago

Ok so to put this into an example:

Say there are 20 electron cash development funding proposals on this ac site. Some of them will, without any donation from me, complete and reach their funding goal. Some of them though, will only reach their funding goal with my donation. Some will still not reach their funding goal even with my donation.

As stated before, it would be irrational for me to donate anything to the ones that will reach their goal without me, and it would be rational for me to donate up to the expected value I gain from the development, to the ones that will only reach their funding goal with my donation.

I completely agree with this, as well as the fact that the more proposals there are, the more there will be that you value and where the goal will only be reached if you donate.

The problem though is that you do not know which are which, it is just as difficult to determine for 200 as it is for one, whether you will be a pivotal donor.

So therefore it doesn't become any more rational for you to donate to a proposal purely as a result of more proposals existing. It only becomes rational for you to donate to a proposal when the expected return without you donating is less than that if you were to donate, which requires you to know or have a good understanding of the likelihood that you are a pivotal donor.

$ 0.00
1 year ago