What if we could use blockchain and game theory to incentivise charity so that its not a victim of market failure?
Let me explain. I'm not a developer, but i had this thought earlier today. Its an economic model.
What's the current problem with charity?
1) A person doesn't feel integral if they can't donate the whole or at least a feelingly integral part of the goal.
2) People feel like its unfair for them to donate because other people who are choosing to be selfish decide not to as well.
3) Simply put, it doesn't benefit them, so its easy to ignore.
This results in a deficiency of charity given, being only a fraction of what society is willing to delegate to centralized government to forcibly extract. This is a problem, and as a free market anarchist, this is a legitimate criticism of free market anarchism. Probably the only decent one tbh.
So what's a solution? The fundamentals for this are simple. We must reverse engineer the incentive mechanism.
Here's how it works: The philanthropist initiates a contract on the blockchain. In the contract, they set aside some amount of Collateral. The philanthropist decides the Goal Amount, the Donation Amount, and of course this determines the Positions Open. He also determines a Deadline. Heres how the different variables interact.
1) If the Goal Amount is not met before the Deadline, the Collateral is distributed amongst the Position Takers, and the Donations are all refunded to the Position Takers.
2) If the Goal Amount is met before the Deadline, the Collateral and the Positions up to the full amount of the Goal Amount is transferred to the philanthropist.
Incentive adjustment #1: Every subsequent donation is programmed to receive a larger slice of the collateral if the Fundraiser were to fail.
Incentive adjustment #2: With schnorr signatures the number of participants couldn't be viewed on a block explorer.
Incentive adjustment #3: Collateral amounts can be further subsidised by third parties hosting the service, driving up participation. Then these services could take back out a fee if the fundraiser is successful.
Incentive adjustment #4: There can be a voting function on each fundraiser. The sole purpose would be to measure sentiment of a fundraiser. Each vote for or against could cost a transaction fee on the blockchain, and an address could only vote once per fundraiser. This would censor bad fundraisers, removing the collateral from the malicious actor, as less would participate. This also benefits miners.
The big idea:
If a fundraiser has no position takers, then by taking a position you would likely get the collateral, incentivising you to take a position.
There is some incentive to wait, or to try to donate twice, as your subsequent position would yield you more of the collateral
In the moment enough people are greedy enough to get a cut, the fundraiser is satisfied as the greedy lose
If the blocks can be viewed, and 9/10 positions are taken, the philanthropist could put in the last position himself to satisfy the contract
If the blocks can't be viewed, then the chances are more randomized, lessening a need for an accumulative collateral reward rate
No matter what, either a) Your money is refunded with interest or b) The donation of your choice is served to the maximum, at only a fair level of self sacrifice. The only losers are the sorry speculators trying to make a quick buck.
Let's flip the problem of market failure on its head by solving the humanitarianism crisis with capitalism, blockchain, and the future of money.
Someone please build this
Peace
[link] [comments]
source https://www.reddit.com/r/btc/comments/ajyzb7/what_if_we_could_use_blockchain_and_game_theory/
Comments
Post a Comment