Some notes on conflicts of interest

Accusations of conflicts of interest are frequent in Bitcoin related debates.

In the block size debate, those working at Blockstream are often accused of having a conflict of interest causing them to advocate for small blocks, in order to make their services related to Lightning and sidechains more valuable. Those advocating for larger blocks are often accused of having a conflict of interest because they only want Bitcoin to gain wide adoption so they can profit off of all the extra users, or so their personal Bitcoin holdings will increase in value.

What is a conflict of interest?
From wikipedia: A conflict of interest (COI) is a situation in which a person or organization is involved in multiple interests (financial, emotional, or otherwise), one of which could possibly corrupt the motivation of the individual or organization.

It is important to note that whether a conflict of interest exists depends entirely on the situation that a person is in. It has nothing to do with whether the person is actually corrupted or not. It is only a statement about the incentives they face in a given situation.

Accusations of conflicts of interest aren't attacks on one's character
People often react very defensively when it is claimed that they have a conflict of interest. They often deny they have a conflict of interest based on the fact that they hold their views honestly. Given the definition above, this is irrelevant to whether there is a conflict of interest.

Prior beliefs don't eliminate conflicts of interest
One defense against conflicts of interest is that a person advocated X before he had a conflict of interest, therefore it is now irrelevant that he has a conflict of interest regarding X.

Although this situation might make it more likely that the person's advocacy of X is not corrupted, there is still a conflict of interest to be concerned about. Suppose there is a tradeoff with X and Y at each extreme, and prior to the conflict of interest the person would have chosen a point 70% of the way toward X. Suppose after the conflict of interest, the person chooses a point 90% of the way toward X. Even though the person was pro-X before, the conflict of interest can still make them push harder for X than they otherwise would have.

As another example, suppose the person previously advocated X, and if not for the conflict of interest would have changed their mind to be pro-Y after encountering some evidence. Suppose the person encounters this evidence after they are in a conflict of interest, and therefore continue advocating X even after the new evidence. In this case the person was still corrupted by the conflict of interest, and having been pro-X before doesn't change that.

Why do conflicts of interests matter?
People can easily deceive themselves. They can believe something completely sincerely, and not realize the underlying reasons. It is usually not possible to introspect and determine whether a conflict of interest is corrupting you. Although having a conflict of interest doesn't mean you have been corrupted, it does make it more likely.