Bitcoin as replacement for the electoral system

Saturday, 23 November, Year 5 d.Tr. | Author: Mircea Popescu

The notion that Bitcoin is here to replace everything everywherei isn't exactly new if you've been reading Trilema. Let's do a case study to better understand how this works.

The factsii of the matter are something like this :

  • BitBet runs a proposition betting service. Bets listed may close at a time specified when they're proposed, or else at a prior time under certain circumstancesiii.
  • As there exists such a thing as a time-value of Bitcoin (we presume), BitBet includes the concept of weight, which means that out of equal bets, earlier bets will receive a larger share of the winnings pool. The exact proportions are user-settable when bets are proposed, but as a principle weight is ubiquitous.iv
  • Because of the foregoing, it can be said that if the bet closes at its announced date, the possiblity of moral hazardv resulting from people betting earlier or later is adequately covered : not because the evolution of weight over time necessarily reflects the fair value thereof, but because users knew aforehand how that is going to be calculated, and they can at any point in time adjust their actual exposure accordingly to whatever differences they perceive.
  • This leaves open the problem of bets that end early. In our earlier example, what would happen should the bet actually be satisfied December 7th ? Obviously, it would be closed, and the winners paid. However, in that narrow interval of time between the event actually occurring and the bet being closed, people could send bets that are credited at a high weight, which is unwarranted by the actual circumstances. The guy getting credited with half your weight in spite of betting moments before, or moments after the event taking place isn't being adequately compensated for the risk he actually undertook, which means that neither are you. After all mutual betting isn't a casino racket, dedicated to fleecing people in a man-against-the-house scam.

The way BitBet resolves this outstanding problem is quite simple : if a bet closes early, bets that have registered before the cutoff event are refunded (minus the BitBet 1% fee, which applies to all bets anyway). However, bets that have registered after the cutoff are not refunded. This means that from the position of the punter, betting on an event that just closed or is just about to close is quite a risky proposition : If his transaction makes it through the network before the BitBet mods close the bet, he will maybe make a 1% loss, or maybe make an unspecified gain, depending on the bet. However, if his transaction doesn't make it through the network before the BitBet mods close the bet, he will make a 100% loss. Since by its very nature and design the Bitcoin network is unreliable - with blocks taking as long as two hours on occasionvi - there is absolutely nothing he can do to increase his odds at successful exploitation of this system.

This then resolves the problem statistically, which is to say on average and generally speaking, people are unlikely to engage in morally hazardous behaviour. It also resolves the problem quite cheaply, as it requires absolutely no human intervention, the entire thing works quite mechanically.

The challenge presented to this solution comes, of course, from the ignorant user (which the earlier linked source wholly describes). Fundamentally, one ignorant that this arrangement exists in the first place, and further ignorant of the actual constraints operating in the space that make this arrangement a correct and necessary solution will proceed to act immorallyvii. Consider the case of the man who lived his entire life in a society where rape is customary and consensual relations unheard of. Once he lands at JFK he goes straight up to a TSA agent with a cute butt, rips off her blouse and proceeds to fuck her right by the concessions stand.viii Has he committed a most heinous crime ? Well... not according to himself he hasn't. Or, if you'd rather take something more banal, consider the goat herder that jaywalks. He's never seen street lights before, has no idea what they are, did he do anything wrong ? According to whom ?

At its core ignorance reduces to an argument ad bestialitatem. What the ignorant is saying, fundamentally, is "I am no different from the beast of the field, it is upon you to make it so I can live as if I were in the field, except I wish to live in town". Obviously put in its nude form this could never stand, a point not quite lost on the ignorant himself. Consequently, when the problem is encountered it will always be argued in purely political terms, which is to say "Why should I have to submit to your moral system ? I want you to submit to mine!"

This reflex is quite visible in the linked text, as the aggressor tries to play the role of the victim, and in spite of being the only possible thief in the room tries for his life to represent the authority as "the thief".ix If a kid steals another kid's piece of pie, and you come in, smack him one atop his head and confiscate his stolen piece of pie will he claim you've "stolen his pie" ? Well, why not ? What's to keep him ?

Reconstructed around the political terms, this dispute would have been resolved in the old, fiat world as a "let's all just try and get along" situation, because everyone votes there : both the ignorant and the actual thief have a vote, and there's two of them and only one BitBet. Consequently, rules and regulations would have been drawn up, with the goal of better matching the statistical behaviour of the site to the individual circumstances of individual bettors. This, obviously, reflects an increase of complexity, which will necessarily create an increase of costs - which is exactly the way government intervention in the market under the guise of "regulation" and "protecting" always works out.

The problem with increasing costs is that this is a burden that will actually have to be borne - Bitcoin isn't Bernankoin to just keep printing worthless fiat paper. So yes, indeed I could have a more refined system in place, that better distinguishes between plain idiots (which is what the guy involved here probably is) and actual thieves. This system would cost more. Obviously the concern trolls who are otherwise worthless, bored and utterly useless socially (but they vote!) would gladly agree that I should do exactly that. After all, they can identify more easily with the idiot, being one, than with all the people who aren't idiots, and so aren't likely to end up in the situations idiots end up in. Nevertheless, would the userbase actually want to pay 2% instead of 1% on all their bets just so the system is safe to use for any idiot ?

The more important point, and where Bitcoin really shines, is that it doesn't matter what they or anyone else would rather or wouldn't rather. The owners of the service decide how it works, it is strictly their empire to judge if the increased fees are justified by the increased complexity. If they make the right call they will prevail in the marketplace - over the dead bodies of the butthurt idiot parade. This will be a good outcome for society as a whole, because people will have a good service they can use no matter what anyone else says. If they make the wrong call they will fail in the marketplace, and this will be a good outcome for society as a whole, because entrepreneurs will have one good example to guide their future behaviour by.

When I say Bitcoin is here to take over, this is what I mean : the entire political process of keeping the squirrels captive while the bear and the wolf decide through democratic ballot what's for dinner is at stake. The entire system that ruined the US, the unholy alliance between professional shitslingers and professional looters of the public treasury is being challenged, quite in the open, quite plainly. What's funny is that it doesn't have a prayer, the battle's already won. They may not know it yet, much like cartoon characters spend sometimes a second after being obliterated in their original form before collapsing in a pile of shards. They will start realising it soon enough, and watch out for the fireworks then.

In point of fact any Bitcoin business is a sovereign government, making policy decisions in an autocratic manner much like some latter day Louis XIV. It's true that some businesses don't have their Mazarins and Colberts, their Turennes and Vaubans, their Molières, Racines and La Fontaines, their Le Nôtresx and for that reason prefer to outsource their political duties - let me repeat that, duties - to a provenly dysfunctional subcontractor. That's not particularly important, because other businesses do in fact have their cardinals and painters and generals and architects, quite ready to take over.

This is what the future looks like. There are no nation states and probably no states at all in the futurexi. There may be voting but there's definitely no "electorate", there will exist political organising but definitely no ACORN, there may be a Parliament but definitely nothing even vaguely similar to the current mockeries of that venerable institution. There's no room in the future for any of the modern products of Roosevelt's many follies. The future is quite strictly bourgeois, it belongs to capital, and to ability, and to knowledge, and to capacity. It doesn't belong to faux moral indignation, and to the unwelcome protestant tendency to organise other people's lives for them.

None of this is optional, or conditional, or in any way dubious. All of it is a fact. Again tomorrow, as yesterday and the day before that and the day before that, mankind will be called to choose whether he wants to live a free and rich life, of choice and achievement, or whether he would prefer to toil in the subterraneans of socialism, hungry and cold. And some men will choose the former, and some will have no choice but to put up with the latter - which lack of alternative he'll of course be more than welcome to paint in any colors he pleases, including the pink and purple tones of "progress" and "socialist equity" and so on and so forth.

It's quite clear to me which side I fall on, and I believe it's equally clear to you which side you fall on. The answer may not be too comfortable, which might explain why you don't particularly wish to answer this question, but there's exactly one guarantee in this life, and that guarantee is that at some point you will be asked the question whether you wish to or not.

It seems to me one's better served by having a prepared answer.

  1. Everything everywhere : the workings of the contract as fundamental to all aspects of social organisation, from plain old questions of politics, bureaucracy and allocation of resources - including for instance the complete demantelation of the welfare state, and when I say complete I do mean complete - all the way into proper mysticism as a replacement of all - not some, not certain, all - traditional religions that have survived to date but are now quite certainly going extinct. As I've said before, Bitcoin is not here to in any way adapt to suit fiat anything. Fiat everything has to and will bend over backwards to adapt to Bitcoin. And if it can't, it's going away, there's no question of hierarchy to be sorted out, there's no partial solution to be negotiated. What Bitcoin says goes. Everything else adapts or perishes. []
  2. Which you may read at length here - 42`417 words' worth. []
  3. For instance a common category of bets reads "X will take place on or before Y date". Obviously this bet closes on Y date at the latest, but otherwise can also close whenever X takes place, prior to that. []
  4. Notably users can in fact enter bets without weight (technically, bets where start weight = end weight). Nevertheless, users never do, for some reason. []
  5. Consider the case of a bet saying "Bitcoin difficulty will reach 1 billion - wow, huh - by December 23rd". Today is November the 23rd, and you bet just as the proposition is accepted, so you get full weight. By December 7th new bettors would only receive about half your weight, meaning that if they want to have the same share of the winnings pool as you will have once the bet closes, they have to bet twice as much. This is fair, after all : on December the 23rd, you will have risked your Bitcoin for a month whereas they have risked theirs for two weeks. Obviously to get the same results they need to even that surface out somehow. []
  6. Possibly more frequently than you relise, by the way. Consider :

    Nov 17 16:43:38 mircea_popescu ;;tslb
    Nov 17 16:43:40 gribble Time since last block: 1 hour, 11 minutes, and 24 seconds


  7. Acording to the system. Obviously no person ever acts immorally according to their own personal outlook, if they had actually thought their action immoral they wouldn't have committed it in the first place. []
  8. Or maybe he just fingers her asshole in public. Would that be more palatable ? []
  9. A very common reflex, consider the case of the teenage nigger that got shot recently :

    deadweasel Mobile County Alabama:
    deadweasel it's so surreal... "If his (the customer) life was not in danger, if no one had a gun up to him, if no one pointed a gun at him - what gives him the right to think that it's okay to just shoot someone?. said the relative. .You should have just left the store and went wherever you had to go in your car or whatever.."


  10. Don't you find it funny to discover that all the French names you know actually lived during the same period ? What would you say, is it a case that Louis le Grand got lucky to be the one monarch active at the time all the smart people just happened to be born and brought their contributions the way they would have done anyway, being that smart people have no choice but to share - quite freely - the very rare and thus very valuable and very expensive fruits of their talents ? Or is it a case that without that particular system there is no art, no science, no culture and no human accomplishment possible at all ? []
  11. Unless your notion of a state is much more like the notion of an online tribe, say a WoW guild or such. []
Category: Bitcoin
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9 Responses

  1. It is truly telling that our friend created a poll on Bitcointalk allowing any user to anonymously vote on the matter!

    Obviously no person ever acts imorally according to their own personal outlook, if they had actually thought their action imoral they wouldn’t have comitted it in the first place.
    Even a career criminal?
    Actually, I do agree, I think criminals always rationalize their actions in some way.

    By the way Bernankoin is a PEE (Pankkake Entertainment Enterprises) trademark. Pay up.

  2. Mircea Popescu`s avatar
    Mircea Popescu 
    Saturday, 23 November 2013

    You got a registration of that pee ? Is it in the trademarkchain ?

    But yes, the btctalk poll was a nice touch. The lolcow levels are through the roof in this case.

  3. And now there really is a Bernankoin!

    (Despite the commit dates, the work and the name started earlier, but I redid it around Primecoin, as it's way easier to fork an altcoin.)

  4. Mircea Popescu`s avatar
    Mircea Popescu 
    Wednesday, 18 December 2013

    Thank you for bringing the light of not repeating the mistakes of the great depression to Bitcoin.

  5. Hello,I placed a bet of 7 Bitcoins on MVP in the Ro8 vs. Naniwa to the arddess 1AeVTTcVGE8bGXYLEk2WYHQGtX2MXHp4Q3, broken up with one payment of 4 BTC, and then 3 BTC. You updated the post saying that payments have been sent out, but I have not received any bitcoins from you to 1HqAHZ3Ha3dyXFrVEj18zDZTzhJs944zst, which is where I transferred my bitcoins from in order to place my bet.I did not see any contact information on your site, so I am posting here. Please contact me so we can resolve this issue. Thanks.

  6. Mircea Popescu`s avatar
    Mircea Popescu 
    Friday, 10 April 2015

    As the expression goes, link to the bet in question ?

  1. [...] Mircea Popescu You got a registration of that pee ? Is it in the trademarkchain ? But... [...]

  2. [...] Bitcoin as replacement for the electoral system [...]

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