Subject: Re: [bitcoin-dev] Inquiry: Transaction Tiering

From: AJ West <[email-masked]>
Date: Mon, 27 Mar 2017 12:29:20 -0400

Hi I'm AJ West, I made a service http://preferredminer.com which is a
proof-of-concept project designed to spur discussion on exactly this issue
of "miners as service providers."

The current status is that Bitcoin end users are looking to support
specific miners, whether that's because they agree with a miner/pool's
political positions, their consensus ideology, physical location (yes some
people would like only miners in particular countries to mine their
transactions) and the list of reasons goes on. The main attitude right now
is that people would like to 'support' miners who signal for the features
they care about.

I strongly believe, whether the Bitcoin developer community facilitates it
or not, certain miners will become preferred by users. In summary, there
are realistically two proposed ways of providing this service in the
present-day situation: 1) By creating 'segregated mempools' where an
authenticated third-party like my web service Preferred Miner manages the
access to pending transactions destined for a specific set of miners, and
2) by creating transactions where the mining fee is in one way or another,
an output to an address owned by the preferred miner(s).

There are some terrible pitfalls with both of these methods. The first
being that you have to trust a lot of people, including the 3rd party (me)
and the pools to work in your users' interest ("don't give my transactions
to other miners or broadcast to mempool please"). Then there are the extra
fees users will have to pay to offset the risk of a miner losing out for
having to send the network a not-yet-broadcasted transaction. And finally,
the other method requires that they be larger transactions, and a directory
of mining pools' receiving addresses for outputs must be maintained. Then
you have to hope the miner will be setup to scoop in your transaction
knowing it's got a fee for them. Plus, how many nodes going forward are
going to hold what seem to be 0-fee transactions in mempool (because the
fee is in the outputs)?

I am not necessarily looking for answers or solutions to these issues, but
simply to show a case and to express that this idea of having specific
miners/pools process their transactions, is important to some people.