Problems With Game Theory Mechanics In Distributed Systems

Despite the incentive structures and game theory mechanics driving honest behavior in the Bitcoin network, there are some important issues that are widely recognized. Centralization of the mining as a result of mining pools has led to concerns that the reinforcing Nash Equilibrium of the system can be compromised through a 51% attack.

The empirical problem laid out by critics is that the success of game theory models in these platforms cannot be determined academically, only through practice. Some of the assumptions made by game theory models in cryptocurrency platforms revolve around a specific threshold of people acting honestly or dishonestly.

Predicating platform security on implied assumptions of human behavior can be risky, especially when there is no precedent for the technology or models being implemented.

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