Author Topic: How to tell if your DAC idea is actually just a vending machine  (Read 3580 times)

0 Members and 1 Guest are viewing this topic.

Offline SatoshiFantasy

  • Jr. Member
  • **
  • Posts: 28
    • View Profile
I've seen lots of "DAC" ideas around here that seem to totally miss the point. The purpose of a DAC is to cause the emergent behavior of a large network of people to behave in a way that a centralized entity could not, while adding value for all participants. Most of what I've seen is just "let's take this business model and put it on a blockchain" - almost always it seems *worse* than a centralized solution.

So here's the litmus test: Which social dillemma is your DAC addressing, and which payoff matrix is flipped as a result of adding the blockchain?

For BTS DNS: Each individual benefits from having squatted a successful domain, while the collective as a whole suffers from the lack of available domains. By the auction/dividend model, it is now *more profitable not to squat than to squat*.

For BTS X: It is *more profitable* to participate in the market peg than to fight it.

For Bitcoin: It is *more profitable* to be an honest miner than a dishonest miner.

Also, if the centralized version of your DAC, is on the edge of legality, or has high barrier to entry due to regulation, then your DAC is viable too.

Offline MolonLabe

  • Full Member
  • ***
  • Posts: 58
    • View Profile
I've seen lots of "DAC" ideas around here that seem to totally miss the point. The purpose of a DAC is to cause the emergent behavior of a large network of people to behave in a way that a centralized entity could not, while adding value for all participants. Most of what I've seen is just "let's take this business model and put it on a blockchain" - almost always it seems *worse* than a centralized solution.

So here's the litmus test: Which social dillemma is your DAC addressing, and which payoff matrix is flipped as a result of adding the blockchain?

For BTS DNS: Each individual benefits from having squatted a successful domain, while the collective as a whole suffers from the lack of available domains. By the auction/dividend model, it is now *more profitable not to squat than to squat*.

For BTS X: It is *more profitable* to participate in the market peg than to fight it.

For Bitcoin: It is *more profitable* to be an honest miner than a dishonest miner.

You might be looking for these:
http://en.wikipedia.org/wiki/Economic_surplus
http://en.wikipedia.org/wiki/Value_proposition

The second part of your litmus test line leads me to believe that you may be also searching for the phrase which describes the field in which I work: http://en.wikipedia.org/wiki/Mechanism_design

If you're unfamiliar, the owner "principal" commits to a mechanism (algorithm, or the DAC program code) and then players "agents" publish reports (signed messages/transaction in this case, but in general anything) and the mechanism pays everyone. Outside the mechanism, the principal says what he wants to have happen, the players implicitly agree to do that by playing, and so the goal is to get them to "report truthfully". They do this because certain message cost more than others (ie, cheap to sign a message from a private key you control vs from a private key you don't control).

With DACs the principal also wants some agents to run the software and become nodes/miners. Thus surplus is created.

One example of a strategy producing new value (surplus) is "Grim Trigger"  http://en.wikipedia.org/wiki/Folk_theorem_(game_theory) A blockchain lets you commit or Precommit http://en.wikipedia.org/wiki/Precommitment in a CREDIBLE way to a new payoff scheme in the hopes of achieving surplus in a similar way.

Offline santaclause102

  • Hero Member
  • *****
  • Posts: 2486
    • View Profile
Daniel once has written an article about that. Can't find it anymore. Does anyone know where that was?

Offline barwizi

  • Hero Member
  • *****
  • Posts: 764
  • Noirbits, NoirShares, NoirEx.....lol, noir anyone?
    • View Profile
    • Noirbitstalk.org
Help me create a technical, then a non-technical description for public viewing, i want to push it to the DACbootcamp repository.
--Bar--  PiNEJGUv4AZVZkLuF6hV4xwbYTRp5etWWJ

The magical land of crypto, no freebies people.

Offline bytemaster

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline toast

  • Hero Member
  • *****
  • Posts: 4001
    • View Profile
  • BitShares: nikolai
I've seen lots of "DAC" ideas around here that seem to totally miss the point. The purpose of a DAC is to cause the emergent behavior of a large network of people to behave in a way that a centralized entity could not, while adding value for all participants. Most of what I've seen is just "let's take this business model and put it on a blockchain" - almost always it seems *worse* than a centralized solution.

So here's the litmus test: Which social dillemma is your DAC addressing, and which payoff matrix is flipped as a result of adding the blockchain?

For BTS DNS: Each individual benefits from having squatted a successful domain, while the collective as a whole suffers from the lack of available domains. By the auction/dividend model, it is now *more profitable not to squat than to squat*.

For BTS X: It is *more profitable* to participate in the market peg than to fight it.

For Bitcoin: It is *more profitable* to be an honest miner than a dishonest miner.
Do not use this post as information for making any important decisions. The only agreements I ever make are informal and non-binding. Take the same precautions as when dealing with a compromised account, scammer, sockpuppet, etc.