Lounge Started Jul 4, 2026 7:32 PM

The Economics of Blockchain Consensus : Exploring the Key Tradeoffs in Blockchain Design

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Jul 4, 2026 7:32 PM
#1
book interesting mining crypto economics consensus

I was recommended this book by a certain Chinese ai, and I think it might be of interest to people here. Suppose this topic alone determined everything in crypto, all other bs you hear on the news is temporary? The description comes out making big claims, but I haven't read it yet so can't vouch for anything. A few people have mentioned zero to monero so I know there are some hardcore readers here!

Description:
Blockchain technologies have been rapidly adopted for the creation of cryptocurrencies and have been explored for a myriad of applications. While this is of important economic interest, the computer science behind how blockchains operate to provide security and provenance has been largely inaccessible to economists. This book is a bridge between the computer science and the economics of blockchains. The focus is on the value and the achievement of blockchain consensus; that is, how distributed and independent nodes are able to reach an agreement on what the current state of digital ledgers, that are the product of blockchains, are. The book shows that the goals of computer scientists in designing blockchains place very high weight on security beyond what an economist trained in game theory and mechanism design would require. It shows how blockchains can be redesigned to account for key economic trade-offs, and will be of interest to researchers and students of economics, financial technology and computer science, alongside policymakers.

Unethical link:
https://annas-archive.gl/md5/ba0d3b661d5971c135d649393d2b869b

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Jul 4, 2026 7:45 PM Edited Jul 4, 2026 7:49 PM
#2

I've look through it and unfortunately it doesn't discuss asic-resistance, a glaring omission.

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Jul 4, 2026 10:11 PM
#3

I'll add it to my list, after I finish Mastering Monero :)

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Jul 5, 2026 11:34 PM
#4

key economic trade-offs, and will be of interest to researchers and students of economics, financial technology and computer science, alongside policymakers
Sounds Keynesean to me.

Really any econ-crypto book that doesn't mention the word "currency" on the summary/store page is probably appealing to moon boys. There are so many great Austrian economics books out there that gambling on something like this would be a waste.
For anyone looking for a taste of economics, What Has Government Done to Our Money is a great starter: EPUB | Audiobook

@Nebuchadnezzar_II your link is perfectly ethical: Ownership has no meaning over non-scarce objects like digital media; Copyright and the DMCA are trash law and trash philosophy.

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Jul 6, 2026 2:44 AM
#5

@ancap_objectivist nah bro I'm an evil pirate don't tell me I'm ethical!

I thought all the moonboys were obsessed with Austrian economics? Look through r/bitcoin if you can tolerate it and you'll see 'Broken Money' by Alden, 'The Bitcoin Standard'. I even saw 'Human Action' by Mises.

I won't pretend to be an economist. To be honest I read the first chapter of Broken Money and think I get the gist already. And I watched a lecture on MMT and again got the gist. I see merit in both, but I don't find the topic so interesting to delve deeper. The most enlightening books on money I ever read are works of fiction that are not on the surface even about money. 'Blood Meridian' by Cormack McCarthy and 'Hospital' by Han Song because they strip away all pretense to reveal the underlying truth: (most) money is crystallized cruelty. (That's why demons come here to boost their 'hash power') How is Austrian economics supposed to account for there being far more money in the world than human flourishing?

'What is money' is a question that has been beaten to death again and again. What I really want to understand is what we should expect to be the future economic relevance of each of the consensus protocols, what makes them dominant / sustainable in their respective niche. I think if we understand that they we can tell the future and maybe yes become moonboys.

There's so many questions!
Will bitcoin always dominate hash power? Could bitcoin realistically ever add a tail emission? Will hash power dominance matter? Big block vs little block? What will happen to L2s? What will happen to Bch?
Will PoS always be used for smart contract environments? Will there be one dominant smart contract chain or more likely multiple? Maybe PoS chains are transient entities and will all be replaced shortly? How do L2s change the equation? How come PoS is suitable for huge real world asset markets but seemingly cannot support a native currency to rivel bitcoin's market cap? How does PoS facilitate the insane memecoin market, when they are often traded offchain?
Why must xmr be asic resistant? Could xmr have used a different consensus layer and still play the same role? Could xmr be replaced by an equivalent if it becomes compromised?
What consensus protocol might support a decentralized liquidity pool for cross chain swaps including bitcoin and monero? Is Thorchain's consensus model really decentralized, despite Rune's death spiral, and should users really care? Is Thorchain's one node one vote policy merely theatre or actually effective? Is Thorchain sustainable?

I think I can answer a lot of these questions already, but with nowhere near the depth that I would feel satisfied with! Maybe you have some suggestions about where I should look?

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Jul 6, 2026 6:34 AM Edited Jul 6, 2026 7:42 AM
#6

@Nebuchadnezzar_II There's no merit in MMT imo, but let's not get into that rn. It seems like what you want isn't really in the realm of economics though (?). The economics kind of end at the point where you can (1) have a currency and (2) use it for trade. Blockchain health etc. is more a software engineering thing.
I'm relatively well read on philosophy & economics but not very much on cryptography, so can't help you there :( I have some Bruce Schneier books on my to-read list, maybe that would be a good place to start.

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Jul 9, 2026 5:51 AM Edited Jul 9, 2026 5:52 AM
#7

@ancap_objectivist
Man I could not disagree more!
Economics is just game theory will dollar signs, and theres plenty of both in consensus engineering, even before the first line of code.
This is why some cryptos are forces of nature, and others are nice ideas that will never work.

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