This article was published by Vitalik Buterin in NAKAMMOTO on January 3, 2020. The translation was provided by First.Vip. For the convenience of the reader, the translation has been deleted.
Foreword: In this article, Vitalik emphasizes the importance of trusted neutrality and sums up several characteristics of trusted neutrality mechanisms. Because crypto networks are essentially a new way to motivate behavior. Thousands of people around the world are currently effectively paid through autonomous agreements that provide verification work (mining). These systems also allow rules to be coded to compensate people for other types of work, such as Zcash's founder rewards or Decred's decentralized finance. For these systems to succeed, a trusted neutrality needs to be maintained to ensure that no organization is unfairly attacked, otherwise these systems will encounter a series of security issues.
- The joint-stock company has created the world's major wealth, will the encryption network be the next one?
People are sometimes dissatisfied with developers' direct decision to allocate tokens to some people, but they are not dissatisfied with the mining rewards allocated to miners by Bitcoin and Ethereum.
People will be dissatisfied that social platform audits will block out some content related to political forms, but they will not be upset by punishing drivers who violate Didi rules.
In this case, God V believes that there is a very important principle at work: when establishing mechanisms to determine high-risk outcomes, these mechanisms must be credible and neutral.
Mechanism: Algorithm + Incentive
In essence, the mechanism is algorithm + incentive, a tool that introduces the values of decision makers. A well-functioning mechanism can lead people to make effective and desirable results, and it is motivating and allows people to participate "honestly".
Here are some examples of mechanisms:
- Democracy: Ballots control elected government seats.
- Social media: Likes control more people can see this content, while opposition and blocking is reduced.
- Blockchain's PoW and PoS mechanism: Miners and participants decide whether the longest chain is in compliance with the norm, and rewards are used to encourage correct behavior.
We are entering a highly networked, highly mediated, and rapidly developing information age. In this era, centralized institutions are losing public trust and people are seeking alternatives. Therefore, we need different forms of mechanisms.
What is trustworthy neutrality?
In essence, if you look at the design of the mechanism, it will not discriminate or oppose any particular group of people, then the mechanism is absolutely neutral. "Anyone who mines a block will get 2 ETH", which is absolutely neutral; "Bob wrote a lot of code and should be rewarded for him" is not neutral; "posts marked as bad by five people will not "Shown" is credible neutral.
In real life, it is difficult to achieve complete neutrality. Anyone who digs out a block will get the same amount of rewards, but it is more beneficial to people in cheap power areas and cheap mining machines. A neutral mechanism treats everyone fairly so that most people can trust it. The identity of a miner is easy to verify, but it is more difficult to define whether a person is a developer and has made a significant contribution. So the focus of the neutral mechanism is not on neutrality, but on reliable neutrality. In other words, it is important that the mechanism is designed so that most people have the same payouts / costs. Every participant can see that the mechanism is fair. Easily give up and this mechanism.
In other words, what we need is the concept of common sense, or we can use less mathematical terms to explain the broad legitimacy and rationality. In order to obtain this common sense of neutrality (that is, the common sense that everyone considers this mechanism to be public), the publicity of the mechanism must be very obvious.
Building credible neutral mechanisms
There are four main rules for establishing a credible neutral mechanism:
- Don't write specific people or specific results into the mechanism
- Open source and publicly verifiable execution
- Simplify things
- Don't change often
1. Simple and easy to understand. Going back to the previous example, "anyone who mines a block gets 2 ETH" is credible, while "Bob gets 1,000 tokens" is not. In reliable neutral mechanism design, the goal is that these desired results are not written into the mechanism. Most of the information in the output on the free market should come from the input of the participants, not from hard-coded rules inside the mechanism itself.
2. Easy to understand: The rules of the mechanism should be public, and it should be possible to publicly verify that the rules are executed correctly. In many cases, users do not want the input to be publicly visible, so the combination of zero-knowledge proof and blockchain can achieve both verifiability and privacy.
3. The simpler the mechanism, the fewer parameters the mechanism has, and the smaller the space for inserting hidden privileges against the target group or against the target group.
4. Do not change the mechanism too frequently. Changing too often will lose trust.
Not limited to neutrality: efficacy is also important
Opposite credible neutrality is the pursuit of extreme neutrality: if it cannot be completely public, it cannot be enforced.
The fallacy of this view is that narrow neutrality is achieved at the expense of general neutrality. The mechanism can ensure that each miner is in the same rules as each other miner, 12.5 BTC or 2 ETH per block, but the contribution of the miner cannot exceed the developer. If we adopt uncompromising narrow and pure neutralism, the other needs of the community will not be supported systematically, and neutrality in the broad sense will not be achieved.
Therefore, the principle of credible neutrality must also be expanded. Good mechanisms must also solve real problems. Failure to do this will lead to criticism of mechanism makers. If a reliable neutral mechanism is not found to solve the problem, an imperfect neutral mechanism will be adopted first. Blockchain pre-sale and developer rewards for a certain period of time are imperfect examples of temporary adoption in the short term. The other is that when a decentralized method has not been adopted, it must be tested first. Nonetheless, we must recognize the value of trustworthy neutrality and gradually achieve it.
If someone is concerned that incomplete neutrality can lead to a loss of trust, it can be supplemented with a "fail-safe" approach. People can add event limits and rewards will disappear after a limited time and must be updated. People can implement this mechanism in Layer 2 (rollup or ETH 2 execution environment) to achieve network effect locking. If this mechanism is out of balance, this mechanism can be discarded through coordination.
A credible and neutral mechanism for solving problems exists in theory and needs to be developed and improved in practice.
- Prediction markets, such as electionbettingodds.com, serve as a "credible neutral" source to predict who will win elections in the near future.
- Reputation system.
The biggest challenge now is to make the mechanism both open but also resistant to attacks, but the development of encryption technologies that allow open rules and guarantee verifiable execution and output and input privacy will make this easier.
In principle, we know that it is entirely possible to establish rules with trustworthy neutrality-as mentioned above, we have basically done so in most cases. But as the number of software-intermediated markets we rely on increases, ensuring that these systems don't empower a few people to be a top priority-whether it's an operator platform or a service provider-we need to create The rules of the letter system are supported by anyone.
Why trusted neutrality matters
Crypto networks are essentially a new way to inspire human behavior. It turns out that hundreds of thousands of people in the world have been effectively remunerated through autonomous agreements that provide verification work (mining). These systems also allow rules to be coded to compensate people for other types of work, such as Zcash's founder rewards or Decred's decentralized finance. In order for these experiments to succeed, they need to maintain a trustworthy neutrality to ensure that no organization is attacked unfairly, otherwise they may encounter problems that plague encryption systems, and encryption systems hope to replace these problems.