Victor Ugochukwu · Dec 14, 2020 . 5min read
Vitalik thinks Counter Coordination is needed for Decentralized Systems
Decentralization between role-based constituencies and using per-person voting instead of per-(coin/share) are among the most notable counter coordination techniques.
By Victor Ugochukwu · Sep 12, 2020 . 6min read
Vitalik Buterin, co-founder of Ethereum network shares his thoughts on the concept of coordination and counter coordination in decentralized systems throwing light on the adverse effect of improving coordination in an unbalanced way.
Likening coordination to a map, Vitalik typifies the extreme cases of coordination and a realistic and achievable state.
He went further to give practical examples where partial coordination among actors leads to net negative for the broader society. Examples like someone selling their votes in an election or sellers colluding to raise product prices. These are vivid examples of partial coordination. He also shares examples even in the context of blockchain and decentralized ledger technology. Large miners colluding to stage a 51% attack is also a potent example of partial coordination going to the extreme.
Vitalik thinks the best way to diagnose a coordination problem in systems is by evaluating intentions and not necessarily actions. Hence, in a system that brazenly allows partial coordination leads to the tragedy-of-commons. At this point, only a few benefits and the larger whole suffers. So it’s important to have a broader perspective as to why action follows in order to design systems that combat these loopholes.
So what are the solutions to partial coordination otherwise called collusion? Vitalik recognizes Game Theory as a potent tool to combat the adverse effects of collusion but still thinks there are better alternatives, one of which is counter coordination.
Vitalik thinks Forking, Skin in the Game and Structured Coordination should be employed as best strategies for counter coordination.
Sharing his views further on collusion and counter coordination techniques, Vitalik advocates for forking and other methods. Vitalik draws examples from the more recent Steem hostile blockchain takeover and how the Hive community forked off from it.
Also, in the attempt to counter collusion in blockchains, Skin in the Game comes in handy. A situation where those who approve a bad decision suffer more prevents tragedy-of-commons.
Lastly, Vitalik concludes by sharing best practices on how to structure coordination for the desired outcome. Out of the many he mentions, decentralization between role-based constituencies and using per-person voting instead of per-(coin/share) are among the most notable. Others, of course, include encouraging and relying on defectors to alert the public about upcoming collisions, adopting technologies and norms that protect privacy etc.
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