Re: [bitcoin-dev] Proposal: rewarding fees to next block miner

From: Eric Voskuil <eric@voskuil•org>
To: George Balch <gbalch714@gmail•com>,
	Bitcoin Protocol Discussion
	<bitcoin-dev@lists•linuxfoundation.org>,
	Lucas Clemente Vella <lvella@gmail•com>
Subject: Re: [bitcoin-dev] Proposal: rewarding fees to next block miner
Date: Sun, 28 Jan 2018 20:49:10 -0800	[thread overview]
Message-ID: <261a9388-64fe-a664-85f0-4b0e8ca9ec1e@voskuil.org> (raw)
In-Reply-To: <CAC94VgAoZFwu4TC8CdNP9cbxUiFgQP4bOsXykJyb4+8y-eSY1Q@mail.gmail.com>

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Your statements contradict each other.

This is not a question of whether it is a "huge" cost, but whether there
is an problem of incentive compatibility, which there is not. Miners
incur the opportunity cost of the space that they mine that does not
include the most optimal fees, which is equal in value to those forgone
fees.

If miners exclude available higher-fee transactions, or mine empty
space, or mine their own "recovery" transactions, they are merely
purchasing block space at market rates, just like everyone else.

The only difference is that they are getting nothing in return, while
everyone else is presumably getting a useful monetary transfer. In other
words, they are losing value to do this. Therefore the incentive is to
not do so. But again, the option to do so is perfectly incentive compatible.

I'm not sure who cooked up this myth about miners gaining advantage over
those who buy block space by mining empty space, rejecting higher-fee
transactions, and/or mining "recovery" transactions, but the idea is
complete nonsense.

e

On 01/28/2018 05:44 PM, George Balch via bitcoin-dev wrote:
> If miners leave transactions out of a block they do pay a cost by not
> being rewarded those fees.  If they include their own spam transactions
> to get back the fee they gain nothing.  Since blocks can have fees
> resulting in hundreds of thousands of dollars, it would seem unlikely
> that miners incur a huge cost for not including transactions.
> 
> On Sun, Jan 28, 2018 at 8:54 AM, Lucas Clemente Vella via bitcoin-dev
> <bitcoin-dev@lists•linuxfoundation.org
> <mailto:bitcoin-dev@lists•linuxfoundation.org>> wrote:
> 
>     If the miner wants to force fees up, why would he fill up a block
>     with placeholder high fee transactions, instead of simply cutting
>     off transactions paying less fee than he is willing to take? Is
>     there any evidence someone is doing such a thing for whatever reason?
> 
>     2018-01-27 6:45 GMT-02:00 Nathan Parker via bitcoin-dev
>     <bitcoin-dev@lists•linuxfoundation.org
>     <mailto:bitcoin-dev@lists•linuxfoundation.org>>:
> 
>         Miners can fill their blocks with transactions paying very high
>         fees at no cost because they get the fees back to themselves.
>         They can do this for different purposes, like trying to increase
>         the recommended fee. Here I propose a backwards-compatible
>         solution to this problem.
> 
>         The solution would be to reward the fees of the current block to
>         the miner of the next block (or X blocks after the current one).
>         That way, if a miner floods its own block with very high fee
>         transactions, those fees are no longer given back to itself, but
>         to the miner of future blocks which could potentially be anyone.
>         Flooding blocks with fake txs is now discouraged. However,
>         filling blocks with real transactions paying real fees is still
>         encouraged because you could be the one to mine the block that
>         would claim this reward.
> 
>         The way to implement this in a backwards-compatible fashion
>         would be to enforce miners to set an anyone-can-spend output in
>         the coinbase transaction of the block (by adding this as a rule
>         for verifying new blocks). The miner of 100 blocks after the
>         current one can add a secondary transaction spending this
>         block's anyone-can-spend coinbase transaction (due to the
>         coinbase needing 100 blocks to mature) and thus claiming the
>         funds. This way, the block reward of a block X is always
>         transferred to the miner of block X+100.
> 
>         Implementing this would require a soft-fork. Since that
>         secondary transaction needs no signature whatsoever, the
>         overhead caused by that extra transaction is negligible.
> 
>         Possible Downside: When the fork is activated, the miners won’t
>         get any reward for mining blocks for a period of 100 blocks.
>         They could choose to power off the mining equipment for
>         maintenance or to save power over that period, so the hashrate
>         could drop temporarily. However, if the hashrate drops too much,
>         blocks would take much longer to mine, and miners wouldn’t want
>         that either since they want to go through those 100 reward-less
>         blocks as soon as possible so they can start getting rewards
>         from mining again.
> 
> 
> 
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> 
> 
> 
>     -- 
>     Lucas Clemente Vella
>     lvella@gmail•com <mailto:lvella@gmail•com>
> 
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> 
> 
> 
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