Subject: Re: [Bitcoin-development] Even simpler minimum fee calculation formula: f > bounty*fork_rate/average_blocksize

From: Michael Gronager <[email-masked]>
Date: Fri, 15 Nov 2013 12:47:46 +0100

On 15/11/13, 11:32 , Peter Todd wrote:

> alpha = (1/113)*600s/134kBytes = 39.62uS/byte = 24kB/second
> 
> Which is atrocious... 

alpha = P_fork*t_block/S = 1/113*454000/134 = 29ms/kb

or 272kbit pr second - if you assume this is a bandwidth then I agree it
is strikingly small (ISDN like), but this is not the case, the size
dependence of this number originates both from the limited network
bandwidth and from the validation and verification time of the blocks as
well as the latency in sending thee again.

The connection between propagation time and fork rate cannot be denied,
and the bandwidth can be deducted from that alone - see Decket et al.

t_0 on a 10000km link is on the order of 40ms, and that is only counting
the finite light speed in the fibers - if you ping the same distance you
get roughly 1-200ms (due to latencies in network equipment). at a size
of ~100kbyte t_0 hence becomes irrelevant.

> This also indicates that pools haven't taken the simple step of peering
> with each other using high-bandwidth nodes with restricted numbers of
> peers

agree

> , which shows you how little attention they are paying to
> optimizing profits.  Right now mining pulls in $1.8 million/day, so
> that's up to $16k wasted.

yup, but the relevant comparison is not 16k vs 1.8m, but the pool
operator earnings which are on the order of 1% of the 1.8m so it is 18k
vs 16k - I wouldn't mind doubling my income...

> 
> However, because miners don't orphan themselves, that $16k loss is born
> disproportionately by smaller miners... which also means the 24kB/sec
> bandwidth estimate is wrong, and the real number is even worse.

Yes, agree

> In
> theory anyway, could just as easily be the case that larger pools have
> screwed up relaying still such that p2pool's forwarding wins.

Yeah, we should resurrect p2pool ;)

> 
> 
> 
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