Prisoners’ dilemma facing anti-government persons in bitcoin


New Member
Jul 18, 2016
Is the government inherently antagonistic to Bitcoin? There are many anarchists and anti-government persons in the bitcoin field, who think that the government is born to deny bitcoin. Is this really the case?

Chapter 1 Prisoner’s dilemma
Prisoner’s dilemma is a scene related to the game theory. Here is a widely-cited case to explain the phrase. (The following content is cited from zhihu!) A and B, two members of a criminal group, are arrested and separated, so they are unable to exchange information with each other. The police now lack adequate evidences, thus being unable to declare them guilty. However, they have obtained some secondary evidences, which can sentence them to one year imprisonment, respectively. Therefore, the police trade with these two prisoners.
1) If A and B both confess their crimes, each will be sentenced to two years of imprisonment;
2) If A confess but B does not, A can be released and B will be sentenced to three years of imprisonment; (vice versa)
3) If A and B both refuse to confess their crimes, each other them will be sentenced to one year imprisonment. The following table can make the above statements clearer:

If you are A or B, what is your choice? You are in darkness about the choice of your partner. Your confession might release you or sentence you to two years in prison. Your refusal to confess will sentence you to one year or three years in prison. Obviously, confession is a more attractive bargain. This is a choice to maximize profits and minimize losses. The final result is that both A and B confess. The two criminals are pushed by the game to a tragic dilemma. Originally, they might be able to “achieve favorable results both,” but at the end the results “are not that satisfactory to both.” The inevitable result is the so-called “Nash equilibrium.” At present, the development of bitcoin is also faced with such a prisoner’s dilemma to some extent.

Chapter 2 Someone bitcoin-er thinking trapped in the prisoner’s dilemma
Currently, bitcoin is faced with a choice to scaling. One path for it to achieve expansion is to directly expand itself onchain, that is, to enlarger the 1M block. The path is highly efficient and simple solution plan. Opponents of the path mainly think the government is hostile towards bitcoin.
Those opposing expansion think that expansion might lead to centralization of full-nodes and hash power of bitcoin. They also think that the government is inherently against bitcoin and that the government has not yet rooted out bitcoin because of decentralization. Once centralization is realized, the government will eliminate it by every means. For example, on July 11, BTCC translated an article written by a foreigner, saying that: Bitcoin is just like Starbucks that the government attempts to close. However, it exists safe and sound because the government cannot find a way to the end. Below is an analysis of the decision-making process:
1) If the small block of bitcoin can guarantee decentralization of bitcoin (though it is still uncertain whether decentralization can be achieved), bitcoin can survive despite of the government’s hostility or not. However, the small block will restrict further development of bitcoin.
2) A large block will expose bitcoin to risks of losing its decentralization. If the government is against bitcoin, bitcoin is doomed to die.
3) If bitcoin is expanded into a large block and the government is not against its existence, bitcoin will fare better and its development will be unlimited.

(Whether the big block will result in centralization is not discussed in this article. This article is written in the mind-set of opponents.) Because we cannot know whether the government is against bitcoin, the safest way is to maintain decentralization of bitcoin as much as possible no matter whether its development is the best. This is a typical prisoner’s dilemma.

Chapter 3 The solution to the prisoner’s dilemma: Communication with the government
The crux of the prisoner’s dilemma is that two prisoners cannot communicate with each other, let alone establish any trust relationship. The key to resolving the prisoner’s dilemma is to send reliable information to another prisoner, thus building efficient communication. Up to now, bitcoin has tens of millions of people involved in its operation. The market value has reached tens of billions of USD. It is impossible for the government to turn a blind eye to bitcoin. Various links of the bitcoin industry have also started their interaction with the government. Even BTCC has cooperated with the government numerous times, though their COO firmly persists in operating in a small block. The US entrepreneurs have done more. They even canvass for support in the Capitol Hill. The US government has established a full set of management bills, which, though being severe, do not aim at rooting out bitcoin. In the bitcoin field, several most important US enterprises have obtained the business license issued by the US government. Therefore, the hypothesis about the government’s inherent hostility to bitcoin is untenable. Entrepreneurs should be more active to cooperate, which is more beneficial for the development of the ecosphere. On the contrary, if all hold a prisoner’s mentality, bitcoin should be prepared to fight against any government efforts to eliminate it. Such alertness will make the government suspect its existence more, and the government will turn to the principle of presumption of guilt. If enterprises involved in bitcoin operations keep on expanding, the government will come to levy taxes on them, investigate them and even make them have a difficult time. Therefore, to give up the prisoner’s mentality and to build the cooperator’s mentality can keep all safe and sound. In the bitcoin community, there are a large number of anarchic fundamentalists, who are inherently against the government, thinking that the government made up of civil servants must be antagonistic to bitcoin. The group of people is also the earliest core personnel of bitcoin. Many core developers hold opinions of the kind. The bitcoin community needs them. Their contributions and creativity form an important part of bitcoin. Now, it is imperative to efficiently communicate with them. To tell the truth, the author is not good at establishing new contacts, let alone cooperating with the government in terms of things which are so complex and financial like bitcoin. The author is just writing this article to express some ideas instead of raising some substantial, constructive and operational methodologies. (Please forgive the “mouth cannon” of the author.)

Chapter 4 The solution to the prisoner’s dilemma: Establishment of a wider social space
In HK gangster movies, if the head of a gang and his/her followers are both arrested, the latter dares not confess crimes of the head considering the safety of their family members. Through intimidation, the head of a gang resolves the prisoner’s dilemma. However, we are all civilized people. The method is not for us. We should adopt some more civilized solutions. The legitimacy of governance in the modern society is based on public recognition. If the majority of the public are against bitcoin, the government policies will tend to eliminate bitcoin. (Pitifully, now, most people hate bitcoin, and they are in the majority.) On the contrary, if bitcoin can include more people into its economic scope, the government policies will tend to protect its development. No matter how powerful a government is, it fears the protest of its people. The power of people is the best way to cope with the government. On the APP, there is an article entitled The Real Decentralization Relies on a Wider User Participation, which includes the following though experiment: Which of the following scenes is the most decentralized?
1) A million people are operating their respective full-nodes at home and another one million are independent bitcoin users. (This is equal to the population of a small city.)
2) There are ten thousand independent full-nodes but just 100 million people using bitcoin. (This is equal to the population of a G20 country.)
*3) There are 10 full-nodes and all mankind is using bitcoin. The conclusion of the above experiment is clear. It is the least possible for the government to be hostile to bitcoin in the third scene, and the most likely in the first scene. The current development of bitcoin is most similar to the first scene. There are few people passionate about and using bitcoin. Most users are the young, the programmers or those with an economic mentality. The author thinks this is not an ideal living environment for bitcoin. To attract more users and diversify users—this is the only way to guarantee a better survival environment for bitcoin. Once there are a large number of diversified bitcoin users, the whole system calls for no guards. Myriads of users will safeguard its existence and development. Obviously, to obtain more diversified users, the direct on chain scaling is a must.

Chapter 5 Conclusions
The optimal survival environment for bitcoin is to have adequate and diversified users. These users will form the powerful protection for bitcoin.

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Staff member
Dec 16, 2015
Nice article, and welcome to the forum!

We should not - by default - assume inherent hostility of any government toward Bitcoin.
There are some people who do this, they fall into the trap of not communicating enough, like you say.

Government is obviously different in many countries, and they take different attitudes toward Bitcoin.
Government also changes, quite frequently.
We can look towards the United Kingdom, Turkey, Venezuela, etc.
Even the United States has a big election coming.

So it is not a certain truth that if a country is big, the government will not change. Consider the USSR - once big superpower, then broken up into smaller countries with their own governments and policies.

There are many ways to find out what a government thinks about a matter.
Asking is sometimes not even guaranteed to give the correct result.

It is a different question whether you believe that you need to ask the government whether Bitcoin should be allowed to grow free.

Bitcoin is like a plant. It will grow in many places, if the climate is suitable. Growing in one country - or not - it can still grow in many other countries. Governments are starting to look at this seriously, e.g. China thinking about introducing its own cryptocurrency (same for Russia, UK, and other respectably significant economies).

In my view, one of the key reasons for Bitcoin coming into existence is to give people a little more financial freedom, that is independence from having to ask favor from a bank or central institution (which, depending on the country you live in might be private or state-controlled). It doesn't matter exactly who controls your money if it's someone other than you. That becomes a minor philosophical difference.

In the US it might be Bank of America, in Germany it could be Deutsche Bank, in Russia it might be SberBank. It's still someone else controlling your money. That is one of the big problems that Bitcoin can solve. It is also a problem which not only affects individuals, but even entire countries. Just the other day, Venezuela had its foreign currency accounts closed by Citibank.

So looking on a bigger scale than individual, we see similar problems in financial autonomy can occur.

The social space today is very wide - the Internet connects all of us. We should be able to trade freely with each other. This would optimize the global economy.