Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader

From: Ivan Brightly <ibrightly@gmail•com>
To: Adam Back <adam@cypherspace•org>
Cc: Bitcoin Dev <bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Răspuns: Personal opinion on the fee market from a worried local trader
Date: Thu, 30 Jul 2015 08:45:16 -0400	[thread overview]
Message-ID: <CAAre=yTfiQhprMx2zmhZHVPuNmazxBLNX5CkVjZzpC-41tgvow@mail.gmail.com> (raw)
In-Reply-To: <CALqxMTHEknuwPW-uG3W9Fv1sQC54ud3zk4aLQaFGTTjAt7ghfA@mail.gmail.com>

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One thing that the below assumption doesn't appear to take into account is
user demand for quick confirmations. I haven't fully thought out the game
theory on this but here goes:

Example: if 75% of hashing power accepts 'medium' fee transactions while
25% is willing to accept low (or any) fee transactions, then a user paying
a lower fee wishing to get their transaction included in the next block
runs a ~75% chance that their transaction won't be included.

Users desiring the most reliably fast confirmations are better off by
paying the minimum fee that a majority of miners will accept. Miners
breaking ranks and accepting lower fees only affects users who aren't
sufficiently interested in quicker confirmations. As long as a majority of
miners 'collude', they will likely be able to keep the average fees higher
than miners with the lower costs of operations might be willing to accept.

On Thu, Jul 30, 2015 at 12:00 AM, Adam Back via bitcoin-dev <
bitcoin-dev@lists•linuxfoundation.org> wrote:

> On 29 July 2015 at 20:41, Ryan Butler via bitcoin-dev
> <bitcoin-dev@lists•linuxfoundation.org> wrote:
> > Does an unlimited blocksize imply the lack of a fee market?  Isn't every
> > miner able to set their minimum accepted fee or transaction acceptance
> > algorithm?
>
> The assumption is that wont work because any miner can break ranks and
> do so profitably, so to expect otherwise is to expect oligopoly
> behaviour which is the sort of antithesis of a decentralised mining
> system.  It's in fact a similar argument as to why decentralisation of
> mining provides policy neutrality: some miner somewhere with some
> hashrate will process your transaction even if some other miners are
> by policy deciding not to mine it.  It is also similar reason why free
> transactions are processed today - policies vary and this is good for
> ensuring many types of transaction get processed.
>
> Adam
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