Exploding Nash Equilibrium For Trustless Trade

An incentive-compatible ‘deposit-refund’ mechanism for enabling trade without trusted third parties is the ‘exploding Nash equilibrium’ where both parties put up 100% of the value in an ‘exploding box’, and if either is unhappy, the value is destroyed. Neither party gains from scamming the other. This can be implemented as ‘2-of-2’ escrow in Bitcoin & was popularized by the NashX website, and proposed for darknet market use.
bibliography⁠, economics⁠, Bitcoin⁠, decision-theory⁠, Silk-Road
2016-05-182021-08-01 in progress certainty: log importance: 3 backlinks