Abstract

This paper proposes a self-governing cryptocurrency, dubbed Autonocoin. Cryptocurrency owners play formal tacit coordination games by making investments recorded on the blockchain. Such investments represent bets about the focal point resolution of normative issues, such as whether a proposed change to Autonocoin should occur. The game produces a result that resolves the issue. With a typical cryptocurrency, the client software establishes conventions that ultimately lead to the identification of the authoritative blockchain. Autonocoin completes a circle by making transactions on the blockchain that in turn define those conventions and the expected software behavior. The distributed consensus mechanism embodied by formal tacit coordination games, meanwhile, can make other types of decisions, including which of competing blockchains is authoritative and whether new Autonocoins should be rewarded to benefit those who have taken actions to benefit Autonocoin. This establishes a unique funding model for a cryptocurrency, and it addresses objections to cryptocurrencies issued predominantly to the initial founders, as well as to those that encourage wasteful mining activities.

Highlights

  • Cryptocurrency software establishes conventions that determine whether particular cryptocurrency transactions are valid and which collection of valid transactions is authoritative

  • Each instance of the client software maintains a copy of the blockchain and updates it based on these conventions

  • The client software itself does not establish conventions for making decisions about the future direction of the cryptocurrency, such as whether the conventions should be changed or whether particular individuals or firms should be rewarded for taking actions supporting the cryptocurrency

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Summary

Introduction

Cryptocurrency software establishes conventions that determine whether particular cryptocurrency transactions are valid and which collection of valid transactions (generally known as a “blockchain”) is authoritative. Autonocoin is built on the concept of a formal tacit coordination game, which can identify a community consensus resolution of a normative issue This is different from simple vote counting (which is infeasible for a cryptocurrency in which individuals are unknown) or auctioning decisions to the highest bidder. Among the tasks that a formal tacit coordination game perform is the fundamental one of confirming the validity of blocks and of determining which of multiple blockchains containing valid blocks is itself authoritative Bitcoin accomplishes these tasks through “proof of work.”. Part II explains how formal tacit coordination games work and how they can be applied to the tasks of determining rewards and determining whether a cryptocurrency should be improved This part develops ideas that are explored in more detail in an earlier paper.[1] Part III explains how formal tacit coordination games can perform the central challenge of a cryptocurrency, determining which of multiple blockchains (each internally consistent and containing only appropriately signed transactions) is authoritative. Its adaptability and potential for rewarding contributors make it a promising candidate to become a relatively focal cryptocurrency in the already existing tacit coordination game that determines cryptocurrency value

Tacit Coordination
Proof of Belief
Rewarding Activities Benefiting the Cryptocurrency
Findings
Conclusion
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