[paulgb]

Good overview and I agree with most of it, but I think the power of the grim trigger is overrated here. In the monarchy metaphor, the threat of defection is death. In the crypto example, it's crypto collapsing. As long as the defectors can cash out to fiat before the collapse they are better for it.

This is roughly the dynamic that seems to have played out with BCH. Every exchange would be better off (according to the grim trigger argument) if Bitcoin never forked, but individually they can profit from being a place to exchange BCH. The fewer exchanges "defect", the more profitable it is to defect. So BCH is now #4 by market cap.

[saurik]

That section is talking about miners, not exchanges; and it specifically notes the limitations and assumptions that even make that possible: in this case, that the Bitcoin proof of work is subject to acceleration using ASICs. Even then, that was a response to a specific attack: using >50% of the mining power to do a takeover of the blockchain, which was itself made more possible (as otherwise it would fizzle) using the takeover contract specified by Vitalik. It was an interesting analysis of a specific scenario that the model seems to provide protect against.

In the very different case of Bitcoin Cash, what you saw were miners perceiving segwit as a protocol fork which would devalue the future potential of their investment in specialized mining equipment, as it changes the proof-of-work parts of Bitcoin into a form of contract verification for payment channels rather than as the one true way a transaction can be performed, so we would have expected them to revolt to maintain the rules they had invested assuming (and in fact once they were already dealing with a fork, they went ahead and made their own rule changes to benefit them: larger blocks).

[paulgb]

Fair point, the example of BCH may not have been a good one. I stand by my more general point that grim trigger isn't a strong incentive in crypto because a rational, selfish player can profit from pulling the trigger.

[ojr]

I think a better grim trigger analogy is the market cap of Ethereum surpassing Bitcoin, it proves the digital scarcity of Bitcoin doesn't matter and that opens the possibility of many kings/protocols to be dominant

[davidgerard]

> So BCH is now #4 by market cap.

BCH is still so thinly traded that this is a meaningless number.

[paulgb]

It's 4th by volume also.