* [Bitcoin-development] Long-term mining incentives
@ 2015-05-11 16:28 Thomas Voegtlin
2015-05-11 16:52 ` insecurity
` (2 more replies)
0 siblings, 3 replies; 37+ messages in thread
From: Thomas Voegtlin @ 2015-05-11 16:28 UTC (permalink / raw)
To: Bitcoin Development
The discussion on block size increase has brought some attention to the
other elephant in the room: Long-term mining incentives.
Bitcoin derives its current market value from the assumption that a
stable, steady-state regime will be reached in the future, where miners
have an incentive to keep mining to protect the network. Such a steady
state regime does not exist today, because miners get most of their
reward from the block subsidy, which will progressively be removed.
Thus, today's 3 billion USD question is the following: Will a steady
state regime be reached in the future? Can such a regime exist? What are
the necessary conditions for its existence?
Satoshi's paper suggests that this may be achieved through miner fees.
Quite a few people seem to take this for granted, and are working to
make it happen (developing cpfp and replace-by-fee). This explains part
of the opposition to raising the block size limit; some people would
like to see some fee pressure building up first, in order to get closer
to a regime where miners are incentivised by transaction fees instead of
block subsidy. Indeed, the emergence of a working fee market would be
extremely reassuring for the long-term viability of bitcoin. So, the
thinking goes, by raising the block size limit, we would be postponing a
crucial reality check. We would be buying time, at the expenses of
Bitcoin's decentralization.
OTOH, proponents of a block size increase have a very good point: if the
block size is not raised soon, Bitcoin is going to enter a new, unknown
and potentially harmful regime. In the current regime, almost all
transaction get confirmed quickly, and fee pressure does not exist. Mike
Hearn suggested that, when blocks reach full capacity and users start to
experience confirmation delays and confirmation uncertainty, users will
simply go away and stop using Bitcoin. To me, that outcome sounds very
plausible indeed. Thus, proponents of the block size increase are
conservative; they are trying to preserve the current regime, which is
known to work, instead of letting the network enter uncharted territory.
My problem is that this seems to lacks a vision. If the maximal block
size is increased only to buy time, or because some people think that 7
tps is not enough to compete with VISA, then I guess it would be
healthier to try and develop off-chain infrastructure first, such as the
Lightning network.
OTOH, I also fail to see evidence that a limited block capacity will
lead to a functional fee market, able to sustain a steady state. A
functional market requires well-informed participants who make rational
choices and accept the outcomes of their choices. That is not the case
today, and to believe that it will magically happen because blocks start
to reach full capacity sounds a lot like like wishful thinking.
So here is my question, to both proponents and opponents of a block size
increase: What steady-state regime do you envision for Bitcoin, and what
is is your plan to get there? More specifically, how will the
steady-state regime look like? Will users experience fee pressure and
delays, or will it look more like a scaled up version of what we enjoy
today? Should fee pressure be increased jointly with subsidy decrease,
or as soon as possible, or never? What incentives will exist for miners
once the subsidy is gone? Will miners have an incentive to permanently
fork off the last block and capture its fees? Do you expect Bitcoin to
work because miners are altruistic/selfish/honest/caring?
A clear vision would be welcome.
^ permalink raw reply [flat|nested] 37+ messages in thread* Re: [Bitcoin-development] Long-term mining incentives
2015-05-11 16:28 [Bitcoin-development] Long-term mining incentives Thomas Voegtlin
@ 2015-05-11 16:52 ` insecurity
2015-05-11 17:29 ` Gavin Andresen
2015-05-14 0:44 ` Melvin Carvalho
2015-05-25 18:31 ` Mike Hearn
2 siblings, 1 reply; 37+ messages in thread
From: insecurity @ 2015-05-11 16:52 UTC (permalink / raw)
To: thomasv; +Cc: bitcoin-development
On 2015-05-11 16:28, Thomas Voegtlin wrote:
> My problem is that this seems to lacks a vision. If the maximal block
> size is increased only to buy time, or because some people think that 7
> tps is not enough to compete with VISA, then I guess it would be
> healthier to try and develop off-chain infrastructure first, such as
> the
> Lightning network.
If your end goal is "compete with VISA" you might as well just give up
and go home right now. There's lots of terrible proposals where people
try to demonstrate that so many hundred thousand transactions a second
are possible if we just make the block size 500GB. In the real world
with physical limits, you literally can not verify more than a few
thousand ECDSA signatures a second on a CPU core. The tradeoff taken
in Bitcoin is that the signatures are pretty small, but they are also
slow to verify on any sort of scale. There's no way competing with a
centralised entity using on-chain transactions is even a sane goal.
^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-11 16:52 ` insecurity
@ 2015-05-11 17:29 ` Gavin Andresen
2015-05-12 12:35 ` Thomas Voegtlin
2015-05-14 0:11 ` Jorge Timón
0 siblings, 2 replies; 37+ messages in thread
From: Gavin Andresen @ 2015-05-11 17:29 UTC (permalink / raw)
To: insecurity; +Cc: Bitcoin Dev
[-- Attachment #1: Type: text/plain, Size: 1238 bytes --]
I think long-term the chain will not be secured purely by proof-of-work. I
think when the Bitcoin network was tiny running solely on people's home
computers proof-of-work was the right way to secure the chain, and the only
fair way to both secure the chain and distribute the coins.
See https://gist.github.com/gavinandresen/630d4a6c24ac6144482a for some
half-baked thoughts along those lines. I don't think proof-of-work is the
last word in distributed consensus (I also don't think any alternatives are
anywhere near ready to deploy, but they might be in ten years).
I also think it is premature to worry about what will happen in twenty or
thirty years when the block subsidy is insignificant. A lot will happen in
the next twenty years. I could spin a vision of what will secure the chain
in twenty years, but I'd put a low probability on that vision actually
turning out to be correct.
That is why I keep saying Bitcoin is an experiment. But I also believe that
the incentives are correct, and there are a lot of very motivated, smart,
hard-working people who will make it work. When you're talking about trying
to predict what will happen decades from now, I think that is the best you
can (honestly) do.
--
--
Gavin Andresen
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-11 17:29 ` Gavin Andresen
@ 2015-05-12 12:35 ` Thomas Voegtlin
[not found] ` <CABsx9T1h7p3hDr7ty43uxsYs-oNRpndzg=dowST2tXtogxRm2g@mail.gmail.com>
2015-05-14 0:11 ` Jorge Timón
1 sibling, 1 reply; 37+ messages in thread
From: Thomas Voegtlin @ 2015-05-12 12:35 UTC (permalink / raw)
Cc: Bitcoin Dev
Thank you for your answer.
I agree that a lot of things will change, and I am not asking for a
prediction of technological developments; prediction is certainly
impossible. What I would like to have is some sort of reference scenario
for the future of Bitcoin. Something a bit like the Standard Model in
Physics. The reference scenario should not be a prediction of the
future, that's not the point. In fact, it will have to be updated
everytime technological evolutions or code changes render it obsolete.
However, the reference scenario should be a workable path through the
future, using today's technologies and today's knowlegde, and including
all planned code changes. It should be, as much as possible, amenable to
quantitative analysis. It could be used to justify controversial
decisions such as a hard fork.
Your proposal of a block size increase would be much stronger if it came
with such a scenario. It would show that you know where you are going.
Le 11/05/2015 19:29, Gavin Andresen a écrit :
> I think long-term the chain will not be secured purely by proof-of-work. I
> think when the Bitcoin network was tiny running solely on people's home
> computers proof-of-work was the right way to secure the chain, and the only
> fair way to both secure the chain and distribute the coins.
>
> See https://gist.github.com/gavinandresen/630d4a6c24ac6144482a for some
> half-baked thoughts along those lines. I don't think proof-of-work is the
> last word in distributed consensus (I also don't think any alternatives are
> anywhere near ready to deploy, but they might be in ten years).
>
> I also think it is premature to worry about what will happen in twenty or
> thirty years when the block subsidy is insignificant. A lot will happen in
> the next twenty years. I could spin a vision of what will secure the chain
> in twenty years, but I'd put a low probability on that vision actually
> turning out to be correct.
>
> That is why I keep saying Bitcoin is an experiment. But I also believe that
> the incentives are correct, and there are a lot of very motivated, smart,
> hard-working people who will make it work. When you're talking about trying
> to predict what will happen decades from now, I think that is the best you
> can (honestly) do.
>
^ permalink raw reply [flat|nested] 37+ messages in thread* Re: [Bitcoin-development] Long-term mining incentives
2015-05-11 17:29 ` Gavin Andresen
2015-05-12 12:35 ` Thomas Voegtlin
@ 2015-05-14 0:11 ` Jorge Timón
2015-05-14 0:48 ` Aaron Voisine
1 sibling, 1 reply; 37+ messages in thread
From: Jorge Timón @ 2015-05-14 0:11 UTC (permalink / raw)
To: Gavin Andresen; +Cc: Bitcoin Dev
On Mon, May 11, 2015 at 7:29 PM, Gavin Andresen <gavinandresen@gmail•com> wrote:
> I think long-term the chain will not be secured purely by proof-of-work. I
> think when the Bitcoin network was tiny running solely on people's home
> computers proof-of-work was the right way to secure the chain, and the only
> fair way to both secure the chain and distribute the coins.
>
> See https://gist.github.com/gavinandresen/630d4a6c24ac6144482a for some
> half-baked thoughts along those lines. I don't think proof-of-work is the
> last word in distributed consensus (I also don't think any alternatives are
> anywhere near ready to deploy, but they might be in ten years).
Or never, nobody knows at this point.
> I also think it is premature to worry about what will happen in twenty or
> thirty years when the block subsidy is insignificant. A lot will happen in
> the next twenty years. I could spin a vision of what will secure the chain
> in twenty years, but I'd put a low probability on that vision actually
> turning out to be correct.
I think is very healthy to worry about that since we know it's
something that will happen.
The system should work without subsidies.
> That is why I keep saying Bitcoin is an experiment. But I also believe that
> the incentives are correct, and there are a lot of very motivated, smart,
> hard-working people who will make it work. When you're talking about trying
> to predict what will happen decades from now, I think that is the best you
> can (honestly) do.
Lightning payment channels may be a new idea, but payment channels are
not, and nobody is using them.
They are the best solution to scalability we have right now,
increasing the block size is simply not a solution, it's just kicking
the can down the road (while reducing the incentives to deploy real
solutions like payment channels).
Not worrying about 10 years in the future but asking people to trust
estimates and speculations about how everything will burn in 2 years
if we don't act right now seems pretty arbitrary to me.
One could just as well argue that there's smart hard-working people
that will solve those problems before they hit us.
It is true that the more distant the future you're trying to predict
is, the more difficult it is to predict it, but any threshold that
separates "relevant worries" from "too far in the future to worry
about it" will always be arbitrary.
Fortunately we don't need to all share the same time horizon for what
is worrying and what is not.
What we need is a clear criterion for what is acceptable for a
hardfork and a general plan to deploy them:
-Do all the hardfork changes need to be uncontroversial? How do we
define uncontroversial?
-Should we maintain and test implementation of hardfork whises that
seem too small to justify a hardfork on their own (ie time travel fix,
allowing to sign inputs values...) to also deploy them at the same
time that other more necessary hardforks?
I agree that hardforks shouldn't be impossible and in that sense I'm
glad that you started the hardfork debate, but I believe we should be
focusing on that debate rather than the block size one.
Once we have a clear criteria, hopefully the block size debate should
become less noisy and more productive.
^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-14 0:11 ` Jorge Timón
@ 2015-05-14 0:48 ` Aaron Voisine
2015-05-14 0:58 ` Pieter Wuille
0 siblings, 1 reply; 37+ messages in thread
From: Aaron Voisine @ 2015-05-14 0:48 UTC (permalink / raw)
To: Jorge Timón; +Cc: Bitcoin Dev
[-- Attachment #1: Type: text/plain, Size: 5388 bytes --]
> increasing the block size is simply not a solution, it's just kicking
> the can down the road (while reducing the incentives to deploy real
> solutions like payment channels).
Placing hard limits on blocksize is not the right solution. There are still
plenty of options to be explored to increase fees, resulting in users
voluntarily economizing on block space. It's premature to resort to
destroying the reliability of propagated transaction getting into blocks.
Child-pays-for-parent is useful, but requires the recipient to spend inputs
upon receipt, consuming even more block space. Replace-by-fee may also
help, but users won't know the fee they are getting charged until after the
fact, and it will make worse all the problems that tx malleability causes
today.
We have $3billion plus of value in this system to defend. The safe,
conservative course is to increase the block size. Miners already have an
incentive to find ways to encourage higher fees and we can help them with
standard recommended propagation rules and hybrid priority/fee transaction
selection for blocks that increases confirmation delays for low fee
transactions.
Aaron Voisine
co-founder and CEO
breadwallet.com
On Wed, May 13, 2015 at 5:11 PM, Jorge Timón <jtimon@jtimon•cc> wrote:
> On Mon, May 11, 2015 at 7:29 PM, Gavin Andresen <gavinandresen@gmail•com>
> wrote:
> > I think long-term the chain will not be secured purely by proof-of-work.
> I
> > think when the Bitcoin network was tiny running solely on people's home
> > computers proof-of-work was the right way to secure the chain, and the
> only
> > fair way to both secure the chain and distribute the coins.
> >
> > See https://gist.github.com/gavinandresen/630d4a6c24ac6144482a for some
> > half-baked thoughts along those lines. I don't think proof-of-work is the
> > last word in distributed consensus (I also don't think any alternatives
> are
> > anywhere near ready to deploy, but they might be in ten years).
>
> Or never, nobody knows at this point.
>
> > I also think it is premature to worry about what will happen in twenty or
> > thirty years when the block subsidy is insignificant. A lot will happen
> in
> > the next twenty years. I could spin a vision of what will secure the
> chain
> > in twenty years, but I'd put a low probability on that vision actually
> > turning out to be correct.
>
> I think is very healthy to worry about that since we know it's
> something that will happen.
> The system should work without subsidies.
>
> > That is why I keep saying Bitcoin is an experiment. But I also believe
> that
> > the incentives are correct, and there are a lot of very motivated, smart,
> > hard-working people who will make it work. When you're talking about
> trying
> > to predict what will happen decades from now, I think that is the best
> you
> > can (honestly) do.
>
> Lightning payment channels may be a new idea, but payment channels are
> not, and nobody is using them.
> They are the best solution to scalability we have right now,
> increasing the block size is simply not a solution, it's just kicking
> the can down the road (while reducing the incentives to deploy real
> solutions like payment channels).
>
> Not worrying about 10 years in the future but asking people to trust
> estimates and speculations about how everything will burn in 2 years
> if we don't act right now seems pretty arbitrary to me.
> One could just as well argue that there's smart hard-working people
> that will solve those problems before they hit us.
>
> It is true that the more distant the future you're trying to predict
> is, the more difficult it is to predict it, but any threshold that
> separates "relevant worries" from "too far in the future to worry
> about it" will always be arbitrary.
> Fortunately we don't need to all share the same time horizon for what
> is worrying and what is not.
> What we need is a clear criterion for what is acceptable for a
> hardfork and a general plan to deploy them:
>
> -Do all the hardfork changes need to be uncontroversial? How do we
> define uncontroversial?
> -Should we maintain and test implementation of hardfork whises that
> seem too small to justify a hardfork on their own (ie time travel fix,
> allowing to sign inputs values...) to also deploy them at the same
> time that other more necessary hardforks?
>
> I agree that hardforks shouldn't be impossible and in that sense I'm
> glad that you started the hardfork debate, but I believe we should be
> focusing on that debate rather than the block size one.
> Once we have a clear criteria, hopefully the block size debate should
> become less noisy and more productive.
>
>
> ------------------------------------------------------------------------------
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-14 0:48 ` Aaron Voisine
@ 2015-05-14 0:58 ` Pieter Wuille
2015-05-14 1:13 ` Aaron Voisine
0 siblings, 1 reply; 37+ messages in thread
From: Pieter Wuille @ 2015-05-14 0:58 UTC (permalink / raw)
To: Aaron Voisine; +Cc: Bitcoin Dev
[-- Attachment #1: Type: text/plain, Size: 752 bytes --]
On Wed, May 13, 2015 at 5:48 PM, Aaron Voisine <voisine@gmail•com> wrote:
> We have $3billion plus of value in this system to defend. The safe,
> conservative course is to increase the block size. Miners already have an
> incentive to find ways to encourage higher fees and we can help them with
> standard recommended propagation rules and hybrid priority/fee transaction
> selection for blocks that increases confirmation delays for low fee
> transactions.
>
You may find that the most economical solution, but I can't understand how
you can call it conservative.
Suggesting a hard fork is betting the survival of the entire ecosystem on
the bet that everyone will agree with and upgrade to new suggested software
before a flag date.
--
Pieter
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-14 0:58 ` Pieter Wuille
@ 2015-05-14 1:13 ` Aaron Voisine
2015-05-14 1:19 ` Pieter Wuille
0 siblings, 1 reply; 37+ messages in thread
From: Aaron Voisine @ 2015-05-14 1:13 UTC (permalink / raw)
To: Pieter Wuille; +Cc: Bitcoin Dev
[-- Attachment #1: Type: text/plain, Size: 1396 bytes --]
Conservative is a relative term. Dropping transactions in a way that is
unpredictable to the sender sounds incredibly drastic to me. I'm suggesting
increasing the blocksize, drastic as it is, is the more conservative
choice. I would recommend that the fork take effect when some specific
large supermajority of the pervious 1000 blocks indicate they have
upgraded, as a safer alternative to a simple flag date, but I'm sure I
wouldn't have to point out that option to people here.
Aaron Voisine
co-founder and CEO
breadwallet.com
On Wed, May 13, 2015 at 5:58 PM, Pieter Wuille <pieter.wuille@gmail•com>
wrote:
> On Wed, May 13, 2015 at 5:48 PM, Aaron Voisine <voisine@gmail•com> wrote:
>
>> We have $3billion plus of value in this system to defend. The safe,
>> conservative course is to increase the block size. Miners already have an
>> incentive to find ways to encourage higher fees and we can help them with
>> standard recommended propagation rules and hybrid priority/fee transaction
>> selection for blocks that increases confirmation delays for low fee
>> transactions.
>>
>
> You may find that the most economical solution, but I can't understand how
> you can call it conservative.
>
> Suggesting a hard fork is betting the survival of the entire ecosystem on
> the bet that everyone will agree with and upgrade to new suggested software
> before a flag date.
>
> --
> Pieter
>
>
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-14 1:13 ` Aaron Voisine
@ 2015-05-14 1:19 ` Pieter Wuille
2015-05-14 1:31 ` Aaron Voisine
0 siblings, 1 reply; 37+ messages in thread
From: Pieter Wuille @ 2015-05-14 1:19 UTC (permalink / raw)
To: Aaron Voisine; +Cc: Bitcoin Dev
[-- Attachment #1: Type: text/plain, Size: 1505 bytes --]
On Wed, May 13, 2015 at 6:13 PM, Aaron Voisine <voisine@gmail•com> wrote:
> Conservative is a relative term. Dropping transactions in a way that is
> unpredictable to the sender sounds incredibly drastic to me. I'm suggesting
> increasing the blocksize, drastic as it is, is the more conservative choice.
>
Transactions are already being dropped, in a more indirect way: by people
and businesses deciding to not use on-chain settlement. That is very sad,
but it's completely inevitable that there is space for some use cases and
not for others (at whatever block size). It's only a "things don't fit
anymore" when you see on-chain transactions as the only means for doing
payments, and that is already not the case. Increasing the block size
allows for more utility on-chain, but it does not fundamentally add more
use cases - only more growth space for people already invested in being
able to do things on-chain while externalizing the costs to others.
> I would recommend that the fork take effect when some specific large
> supermajority of the pervious 1000 blocks indicate they have upgraded, as a
> safer alternative to a simple flag date, but I'm sure I wouldn't have to
> point out that option to people here.
>
That only measures miner adoption, which is the least relevant. The
question is whether people using full nodes will upgrade. If they do, then
miners are forced to upgrade too, or become irrelevant. If they don't, the
upgrade is risky with or without miner adoption.
--
Pieter
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-14 1:19 ` Pieter Wuille
@ 2015-05-14 1:31 ` Aaron Voisine
2015-05-14 2:34 ` Aaron Voisine
2015-05-16 20:35 ` Owen Gunden
0 siblings, 2 replies; 37+ messages in thread
From: Aaron Voisine @ 2015-05-14 1:31 UTC (permalink / raw)
To: Pieter Wuille; +Cc: Bitcoin Dev
[-- Attachment #1: Type: text/plain, Size: 2497 bytes --]
> by people and businesses deciding to not use on-chain settlement.
I completely agree. Increasing fees will cause people voluntary economize
on blockspace by finding alternatives, i.e. not bitcoin. A fee however is a
known, upfront cost... unpredictable transaction failure in most cases will
be a far higher, unacceptable cost to the user than the actual fee. The
higher the costs of using the system, the lower the adoption as a
store-of-value. The lower the adoption as store-of-value, the lower the
price, and the lower the value of bitcoin to the world.
> That only measures miner adoption, which is the least relevant.
I concede the point. Perhaps a flag date based on previous observation of
network upgrade rates with a conservative additional margin in addition to
supermajority of mining power.
Aaron Voisine
co-founder and CEO
breadwallet.com
On Wed, May 13, 2015 at 6:19 PM, Pieter Wuille <pieter.wuille@gmail•com>
wrote:
> On Wed, May 13, 2015 at 6:13 PM, Aaron Voisine <voisine@gmail•com> wrote:
>
>> Conservative is a relative term. Dropping transactions in a way that is
>> unpredictable to the sender sounds incredibly drastic to me. I'm suggesting
>> increasing the blocksize, drastic as it is, is the more conservative choice.
>>
>
> Transactions are already being dropped, in a more indirect way: by people
> and businesses deciding to not use on-chain settlement. That is very sad,
> but it's completely inevitable that there is space for some use cases and
> not for others (at whatever block size). It's only a "things don't fit
> anymore" when you see on-chain transactions as the only means for doing
> payments, and that is already not the case. Increasing the block size
> allows for more utility on-chain, but it does not fundamentally add more
> use cases - only more growth space for people already invested in being
> able to do things on-chain while externalizing the costs to others.
>
>
>> I would recommend that the fork take effect when some specific large
>> supermajority of the pervious 1000 blocks indicate they have upgraded, as a
>> safer alternative to a simple flag date, but I'm sure I wouldn't have to
>> point out that option to people here.
>>
>
> That only measures miner adoption, which is the least relevant. The
> question is whether people using full nodes will upgrade. If they do, then
> miners are forced to upgrade too, or become irrelevant. If they don't, the
> upgrade is risky with or without miner adoption.
>
> --
> Pieter
>
>
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-14 1:31 ` Aaron Voisine
@ 2015-05-14 2:34 ` Aaron Voisine
2015-05-16 20:35 ` Owen Gunden
1 sibling, 0 replies; 37+ messages in thread
From: Aaron Voisine @ 2015-05-14 2:34 UTC (permalink / raw)
To: Pieter Wuille; +Cc: Bitcoin Dev
[-- Attachment #1: Type: text/plain, Size: 3126 bytes --]
> I concede the point. Perhaps a flag date based on previous observation of
network upgrade rates with a conservative additional margin in addition to
supermajority of mining power.
It occurs to me that this would allow for a relatively small percentage of
miners to stop the upgrade if the flag date turns out to be poorly chosen
and a large number of non-mining nodes haven't upgraded yet. Would be a
nice safety fallback.
Aaron Voisine
co-founder and CEO
breadwallet.com
On Wed, May 13, 2015 at 6:31 PM, Aaron Voisine <voisine@gmail•com> wrote:
> > by people and businesses deciding to not use on-chain settlement.
>
> I completely agree. Increasing fees will cause people voluntary economize
> on blockspace by finding alternatives, i.e. not bitcoin. A fee however is a
> known, upfront cost... unpredictable transaction failure in most cases will
> be a far higher, unacceptable cost to the user than the actual fee. The
> higher the costs of using the system, the lower the adoption as a
> store-of-value. The lower the adoption as store-of-value, the lower the
> price, and the lower the value of bitcoin to the world.
>
> > That only measures miner adoption, which is the least relevant.
>
> I concede the point. Perhaps a flag date based on previous observation of
> network upgrade rates with a conservative additional margin in addition to
> supermajority of mining power.
>
>
> Aaron Voisine
> co-founder and CEO
> breadwallet.com
>
> On Wed, May 13, 2015 at 6:19 PM, Pieter Wuille <pieter.wuille@gmail•com>
> wrote:
>
>> On Wed, May 13, 2015 at 6:13 PM, Aaron Voisine <voisine@gmail•com> wrote:
>>
>>> Conservative is a relative term. Dropping transactions in a way that is
>>> unpredictable to the sender sounds incredibly drastic to me. I'm suggesting
>>> increasing the blocksize, drastic as it is, is the more conservative choice.
>>>
>>
>> Transactions are already being dropped, in a more indirect way: by people
>> and businesses deciding to not use on-chain settlement. That is very sad,
>> but it's completely inevitable that there is space for some use cases and
>> not for others (at whatever block size). It's only a "things don't fit
>> anymore" when you see on-chain transactions as the only means for doing
>> payments, and that is already not the case. Increasing the block size
>> allows for more utility on-chain, but it does not fundamentally add more
>> use cases - only more growth space for people already invested in being
>> able to do things on-chain while externalizing the costs to others.
>>
>>
>>> I would recommend that the fork take effect when some specific large
>>> supermajority of the pervious 1000 blocks indicate they have upgraded, as a
>>> safer alternative to a simple flag date, but I'm sure I wouldn't have to
>>> point out that option to people here.
>>>
>>
>> That only measures miner adoption, which is the least relevant. The
>> question is whether people using full nodes will upgrade. If they do, then
>> miners are forced to upgrade too, or become irrelevant. If they don't, the
>> upgrade is risky with or without miner adoption.
>>
>> --
>> Pieter
>>
>>
>
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-14 1:31 ` Aaron Voisine
2015-05-14 2:34 ` Aaron Voisine
@ 2015-05-16 20:35 ` Owen Gunden
2015-05-16 22:18 ` Tom Harding
2015-05-17 1:08 ` Aaron Voisine
1 sibling, 2 replies; 37+ messages in thread
From: Owen Gunden @ 2015-05-16 20:35 UTC (permalink / raw)
To: bitcoin-development
On 05/13/2015 09:31 PM, Aaron Voisine wrote:
> > by people and businesses deciding to not use on-chain settlement.
>
> I completely agree. Increasing fees will cause people voluntary
> economize on blockspace by finding alternatives, i.e. not bitcoin.
This strikes me as a leap. There are alternatives that still use bitcoin
as the unit of value, such as sidechains, offchain, etc. To say that
these are "not bitcoin" is misleading.
> A fee however is a known, upfront cost... unpredictable transaction failure in
> most cases will be a far higher, unacceptable cost to the user than the
> actual fee.
Are we sure that raising the block size is the only way to avoid
"unpredictable transaction failure"? If so, and it's as bad as you say
it is, aren't we screwed anyway when we inevitably start hitting the cap
(even if it's raised 10x or 20x)? And if that's the case, then don't we
do a disservice to users by continuing to pretend that we can make this
problem go away?
> The higher the costs of using the system, the lower the
> adoption as a store-of-value.
On what do you base this? Gold has a very high cost of using (storage,
transport) and yet is perhaps the most widely accepted store of value.
^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-16 20:35 ` Owen Gunden
@ 2015-05-16 22:18 ` Tom Harding
2015-05-17 1:08 ` Aaron Voisine
1 sibling, 0 replies; 37+ messages in thread
From: Tom Harding @ 2015-05-16 22:18 UTC (permalink / raw)
To: bitcoin-development
On 5/16/2015 1:35 PM, Owen Gunden wrote:
> There are alternatives that still use bitcoin as the unit of value,
> such as sidechains, offchain, etc. To say that these are "not bitcoin"
> is misleading.
Is it? Nobody thinks "euro accepted" implies Visa is ok, even though
Visa is just a bunch of extra protocol surrounding an eventual bank deposit.
^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-16 20:35 ` Owen Gunden
2015-05-16 22:18 ` Tom Harding
@ 2015-05-17 1:08 ` Aaron Voisine
1 sibling, 0 replies; 37+ messages in thread
From: Aaron Voisine @ 2015-05-17 1:08 UTC (permalink / raw)
To: Owen Gunden; +Cc: Bitcoin Development
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On Sat, May 16, 2015 at 1:35 PM, Owen Gunden <ogunden@phauna•org> wrote:
>
> This strikes me as a leap. There are alternatives that still use bitcoin
> as the unit of value, such as sidechains, offchain, etc. To say that
> these are "not bitcoin" is misleading.
>
The only options available today and in the near future that I'm aware of
are of the centralized custody variety, which is pretty bad in my opinion,
but your point is taken.
>
> Are we sure that raising the block size is the only way to avoid
> "unpredictable transaction failure"? If so, and it's as bad as you say
> it is, aren't we screwed anyway when we inevitably start hitting the cap
> (even if it's raised 10x or 20x)? And if that's the case, then don't we
> do a disservice to users by continuing to pretend that we can make this
> problem go away?
>
When we start bumping up against the block size limit, the transactions at
the margins will experience failure in a way that will be unpredictable to
current wallet software. We can slow blockchain growth by increasing fees
alone, without introducing the additional cost of unpredictability around
confirmation failure, which when it comes down to it is just another
(extreme) way to keep usage low. Instead of fees and unpredictable
confirmation, why not just have fees alone. A single, upfront, known cost.
>
>
> On what do you base this? Gold has a very high cost of using (storage,
> transport) and yet is perhaps the most widely accepted store of value.
>
I would argue that the reason gold is not the one world global currency
that it once was is because of those costs. That's why people shifted over
time to gold backed bank notes and eventually fiat.
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-11 16:28 [Bitcoin-development] Long-term mining incentives Thomas Voegtlin
2015-05-11 16:52 ` insecurity
@ 2015-05-14 0:44 ` Melvin Carvalho
2015-05-25 18:31 ` Mike Hearn
2 siblings, 0 replies; 37+ messages in thread
From: Melvin Carvalho @ 2015-05-14 0:44 UTC (permalink / raw)
To: Thomas Voegtlin; +Cc: Bitcoin Development
[-- Attachment #1: Type: text/plain, Size: 5363 bytes --]
On 11 May 2015 at 18:28, Thomas Voegtlin <thomasv@electrum•org> wrote:
> The discussion on block size increase has brought some attention to the
> other elephant in the room: Long-term mining incentives.
>
> Bitcoin derives its current market value from the assumption that a
> stable, steady-state regime will be reached in the future, where miners
> have an incentive to keep mining to protect the network. Such a steady
> state regime does not exist today, because miners get most of their
> reward from the block subsidy, which will progressively be removed.
>
> Thus, today's 3 billion USD question is the following: Will a steady
> state regime be reached in the future? Can such a regime exist? What are
> the necessary conditions for its existence?
>
> Satoshi's paper suggests that this may be achieved through miner fees.
> Quite a few people seem to take this for granted, and are working to
> make it happen (developing cpfp and replace-by-fee). This explains part
> of the opposition to raising the block size limit; some people would
> like to see some fee pressure building up first, in order to get closer
> to a regime where miners are incentivised by transaction fees instead of
> block subsidy. Indeed, the emergence of a working fee market would be
> extremely reassuring for the long-term viability of bitcoin. So, the
> thinking goes, by raising the block size limit, we would be postponing a
> crucial reality check. We would be buying time, at the expenses of
> Bitcoin's decentralization.
>
> OTOH, proponents of a block size increase have a very good point: if the
> block size is not raised soon, Bitcoin is going to enter a new, unknown
> and potentially harmful regime. In the current regime, almost all
> transaction get confirmed quickly, and fee pressure does not exist. Mike
> Hearn suggested that, when blocks reach full capacity and users start to
> experience confirmation delays and confirmation uncertainty, users will
> simply go away and stop using Bitcoin. To me, that outcome sounds very
> plausible indeed. Thus, proponents of the block size increase are
> conservative; they are trying to preserve the current regime, which is
> known to work, instead of letting the network enter uncharted territory.
>
> My problem is that this seems to lacks a vision. If the maximal block
> size is increased only to buy time, or because some people think that 7
> tps is not enough to compete with VISA, then I guess it would be
> healthier to try and develop off-chain infrastructure first, such as the
> Lightning network.
>
> OTOH, I also fail to see evidence that a limited block capacity will
> lead to a functional fee market, able to sustain a steady state. A
> functional market requires well-informed participants who make rational
> choices and accept the outcomes of their choices. That is not the case
> today, and to believe that it will magically happen because blocks start
> to reach full capacity sounds a lot like like wishful thinking.
>
> So here is my question, to both proponents and opponents of a block size
> increase: What steady-state regime do you envision for Bitcoin, and what
> is is your plan to get there? More specifically, how will the
> steady-state regime look like? Will users experience fee pressure and
> delays, or will it look more like a scaled up version of what we enjoy
> today? Should fee pressure be increased jointly with subsidy decrease,
> or as soon as possible, or never? What incentives will exist for miners
> once the subsidy is gone? Will miners have an incentive to permanently
> fork off the last block and capture its fees? Do you expect Bitcoin to
> work because miners are altruistic/selfish/honest/caring?
>
> A clear vision would be welcome.
>
I am guided here by Satoshi's paper:
"Commerce on the Internet has come to rely almost exclusively on financial
institutions serving as trusted third parties to process electronic
payments. While the system works well enough for *most transactions*"
This suggests to me that most tx will occur off-block with the block chain
used for settlement. Indeed Satoshi was working on a trust based market
before he left.
If commerce works well enough off-block with zero trust settlement
supporting it, people might even forget that the block chain exists, like
with gold settlement. But it can be used for transactions. To this end I
welcome higher fees, so that the block chain becomes the reserve currency
of the internet and is used sparingly.
But as Gavin pointed out, bitcoin is still an experiment and we are all
still learning. We are also learning from alt coin mechanisms. I am
unsure there is huge urgency here, and would lean towards caution as
bitcoin infrastructure rapidly grows.
>
>
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-11 16:28 [Bitcoin-development] Long-term mining incentives Thomas Voegtlin
2015-05-11 16:52 ` insecurity
2015-05-14 0:44 ` Melvin Carvalho
@ 2015-05-25 18:31 ` Mike Hearn
2015-05-26 18:47 ` Thomas Voegtlin
2015-05-27 21:59 ` Mike Hearn
2 siblings, 2 replies; 37+ messages in thread
From: Mike Hearn @ 2015-05-25 18:31 UTC (permalink / raw)
To: Thomas Voegtlin; +Cc: Bitcoin Development
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Hi Thomas,
My problem is that this seems to lacks a vision.
>
Are you aware of my proposal for network assurance contracts?
There is a discussion here:
https://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg07552.html
But I agree with Gavin that attempting to plan for 20 years from now is
ambitious at best. Bitcoin might not even exist 20 years from now, or might
be an abandoned backwater a la USENET.
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-25 18:31 ` Mike Hearn
@ 2015-05-26 18:47 ` Thomas Voegtlin
2015-05-27 21:59 ` Mike Hearn
1 sibling, 0 replies; 37+ messages in thread
From: Thomas Voegtlin @ 2015-05-26 18:47 UTC (permalink / raw)
To: Bitcoin Development
Hello Mike,
>
> Are you aware of my proposal for network assurance contracts?
>
Yes I am aware of that; sorry for not mentioning it. I think it is an
interesting proposal, but I would not rely on it today, because it
includes a large share of unproven social experiment.
(Bitcoin too is a social experiment, but so far it has been working)
> But I agree with Gavin that attempting to plan for 20 years from now is
> ambitious at best. Bitcoin might not even exist 20 years from now, or might
> be an abandoned backwater a la USENET.
I agree with that, but I don't think it can be used as a way to justify
how decisions are made today.
The opposition to block size increase comes from two things:
(1) The perceived risk of increased centralization.
(2) Long-term considerations on the need for fee pressure.
I believe you and Gavin have properly addressed (1). Concerning (2), I
think the belief that miners can eventually be funded by a fee market is
wishful thinking. Thus, I am not against the proposed block size increase.
However, the issue of long-term mining incentives remains. So far, the
only proven method to incentivize mining has been direct block reward.
The easiest solution to ensure long-term viability of Bitcoin would be
to put an end to the original block halving schedule, and to keep the
block reward constant (this is what Monero does, btw). That solution is
inflationary, but in practice, users happen to lose private keys all the
time. The rate of coins loss would eventually converge to whatever rate
of emission is chosen, because the care people take of their coins
depends on their value.
Another solution, that does not break Bitcoin's social contract, would
be to keep the original block halving schedule, but to allow miners to
also redeem lost coins (defined as: coins that have not moved for a
fixed number of years. Some time averaging of the lost coins may be
needed in order to prevent non-productive miner strategies). That
solution would create less uncertainty on the actual money supply, and
better acceptability.
I do not expect such a solution to be adopted before miner incentives
become a problem. Neither am I attempting to predict the future; a
completely different solution might be found before the problem arises,
or Bitcoin might stop to exist for some other reason.
However, if I had to decide today, I would choose such a solution,
instead of relying on completely unproven mechanisms.
More important, since we need to decide about block size today, I want
to make it clear that my support is motivated by that long-term
possibility. I believe that the "we will need fee pressure" argument can
reasonably be dismissed, not because we don't know how Bitcoin will work
in 20 years, but because we know how it works today, and it is not
thanks to fee pressure.
Thomas
^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-25 18:31 ` Mike Hearn
2015-05-26 18:47 ` Thomas Voegtlin
@ 2015-05-27 21:59 ` Mike Hearn
2015-05-27 22:22 ` Gregory Maxwell
1 sibling, 1 reply; 37+ messages in thread
From: Mike Hearn @ 2015-05-27 21:59 UTC (permalink / raw)
To: Thomas Voegtlin; +Cc: Bitcoin Development
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I wrote an article that explains the hashing assurance contract concept:
https://medium.com/@octskyward/hashing-7d04a887acc8
(it doesn't contain an in depth protocol description)
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-27 21:59 ` Mike Hearn
@ 2015-05-27 22:22 ` Gregory Maxwell
2015-05-28 10:30 ` Mike Hearn
0 siblings, 1 reply; 37+ messages in thread
From: Gregory Maxwell @ 2015-05-27 22:22 UTC (permalink / raw)
To: Mike Hearn; +Cc: Bitcoin Development
On Wed, May 27, 2015 at 9:59 PM, Mike Hearn <mike@plan99•net> wrote:
> I wrote an article that explains the hashing assurance contract concept:
>
> https://medium.com/@octskyward/hashing-7d04a887acc8
>
> (it doesn't contain an in depth protocol description)
The prior (and seemingly this) assurance contract proposals pay the
miners who mines a chain supportive of your interests and miners whom
mine against your interests identically.
There is already a mechanism built into Bitcoin for paying for
security which doesn't have this problem, and which mitigates the
common action problem of people just sitting around for other people
to pay for security: transaction fees. Fixing the problem with
assurance contracts effectively makes them end up working like
transaction fees in any case. Considering the near-failure in just
keeping development funded, I'm not sure where the believe this this
model will be workable comes from; in particular unlike a lighthouse
(but like development) security is ongoing and not primarily a fixed
one time cost. I note that many existing crowdfunding platforms
(including your own) do not do ongoing costs with this kind of binary
contract.
Also work reminding people that mining per-contract is a long
identified existential risk to Bitcoin which has been seeing more
analysis lately:
http://www.jbonneau.com/doc/BFGKN14-bitcoin_bribery.pdf
^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
2015-05-27 22:22 ` Gregory Maxwell
@ 2015-05-28 10:30 ` Mike Hearn
0 siblings, 0 replies; 37+ messages in thread
From: Mike Hearn @ 2015-05-28 10:30 UTC (permalink / raw)
To: Gregory Maxwell; +Cc: Bitcoin Development
[-- Attachment #1: Type: text/plain, Size: 2363 bytes --]
>
> The prior (and seemingly this) assurance contract proposals pay the
> miners who mines a chain supportive of your interests and miners whom
> mine against your interests identically.
>
The same is true today - via inflation I pay for blocks regardless of
whether they contain or double spend my transactions or not. So I don't see
why it'd be different in future.
> There is already a mechanism built into Bitcoin for paying for
> security which doesn't have this problem, and which mitigates the
> common action problem of people just sitting around for other people
> to pay for security: transaction fees.
The article states quite clearly that assurance contracts are proposed only
if people setting transaction fees themselves doesn't work. There's some
reasonably good arguments that it probably won't work, but I don't assign
very high weight to game theoretic arguments these days so it wouldn't
surprise me if Satoshi's original plan worked out OK too.
Of course, by the time this matters I plan to be sipping a pina colada on
my private retirement beach :) It's a problem the next generation can
tackle, as far as I am concerned.
> Considering the near-failure in just keeping development funded, I'm not
> sure where the believe this this model will be workable comes from
Patience :)
Right now it's a lot easier to get development money from VC funds and rich
benefactors than raising it directly from the community, so unsurprisingly
that's what most people do.
Despite that, the Hourglass design document project now has sufficient
pre-pledges that it should be possible to crowdfund it successfully once I
get around to actually doing the work. And BitSquare was able to raise
nearly half of their target despite an incredibly aggressive deadline and
the fact that they hadn't shipped a usable prototype. I think as people get
better at crafting their contracts and people get more experience with
funding work this way, we'll see it get more common.
But yes. Paying for things via assurance contracts is a long term and very
experimental plan, for sure.
> one time cost. I note that many existing crowdfunding platforms
> (including your own) do not do ongoing costs with this kind of binary
> contract.
>
Lighthouse wasn't written to do hashing assurance contracts, so no, it
doesn't have such a feature. Perhaps in version 2.
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^ permalink raw reply [flat|nested] 37+ messages in thread
* Re: [Bitcoin-development] Long-term mining incentives
@ 2015-05-13 17:49 Damian Gomez
0 siblings, 0 replies; 37+ messages in thread
From: Damian Gomez @ 2015-05-13 17:49 UTC (permalink / raw)
To: bitcoin-development
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I hope to keep continuing this conversations. Pardon my absence, but I
don't alway feel like I have much to contribute especially if it's not
techincal.
On my part I have been a proponent, of an alterrnativ consensus, that
begins shifting away from teh current cooinbase reward system in order to
reduce mining on the whole and thus limit those who do mine to do so on a
level of integrity.
I took a look at the ethereum blog on weak subjectivity, it does seem to be
a good transtition to use a gravity schema to be implemented in a Log
Structured Merge tree in order to find doscrepancy in forks.
Using this sama data structure could still be used in a consensus model. In
terms of how nodes communicate on teh network their speed and latency
communication are at least halfway solved based off their intereactions
(kernel software changes) with how nodes write and read memory { smp_wrb()
|| smp_rmb() } This would allow for a connection on the
Let me provide a use case: Say that we wanted to begin a new model for
integrity, then the current value for integrity would utilize a OTS from
the previous hash in order to establish the previous owner address of the
block it was previously part of. THE MAIN ISSUE here is being able to
verify, which value of integrity is useful for being able to establish a
genesis block. A paper by Lee & Ewe (2001) called *The Byzantine General's
Problem* gives insight as to how a O(n^c) model is suitable to send a
message w/ value through out the system, each node is then sent a
read-invalidate request in order to change their cache logs for old system
memory in a new fixed address. Upon consensus of this value the rest of the
"brainer" {1st recipeients} nodes would be able to send a forward
propagation of the learnt value and, after acceptance the value would then
be backpropagated to the genesis block upoon every round in orderr to set a
deterministic standard for the dynamic increase of integrity of the system.
In POW systems the nonce generated would be the accumulation of the
integrity within a system and what their computatiuonal exertion in terms
of the overall rate of integrity increase in the system as the new coinbase
-> this value then is assigned and signed to the hash and teh Merkel Root
as two layers encoded to its base and then reencrypted using EDCSA from
the 256 to 512 bit transformation so that the new address given has a
validity that cannot be easily fingerprinted and the malleability of teh
transaction becomes much more difficult due to the overall 2 ^ 28
verification stamp provided to the new hash. The parameters T T r P
(Trust value) -> foud in the new coinbase or the scriptSig
( Hidden) -> found in the Hash, and the merkel root hash
(TRust overall) R = within the target range for new nonces and address
locations
Paradigm (integrity) = held within the genesis block as a backpropogated
solution
Using this signature then the nodes would then be able to communicate and
transition the memory resevres for previous transaction on the block based
on the byzantine consensus. What noone has yet mentioned which I have
forgotten too, is how these datacenters of pool woul be supported w/out
fees. I will thrw that one out to all of you. The current consensus system
leaves room for orp[haned transactions if there were miltiple signature
requests the queue would be lined up based off integrity values in order to
have the most effective changes occcur first.
I have some more thoughts and will continue working on the techinical
vernacular and how a noob developer and decent computer science student
could make such an mplementation a reality. Thanks in advance for
listengin to this.
<Thank you to Greg Maxwell for allowing us to liosten to his talk online,
was hearing while writing this.> And to Krzysztof Okupsi and Paul
McKenny(Memory Barriers Hardware View for Software hackers) for their help
in nudging my brain and the relentles people behind the scenes who make all
our minds possible.
On Wed, May 13, 2015 at 4:26 AM, <
bitcoin-development-request@lists•sourceforge.net> wrote:
> Send Bitcoin-development mailing list submissions to
> bitcoin-development@lists•sourceforge.net
>
> To subscribe or unsubscribe via the World Wide Web, visit
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> or, via email, send a message with subject or body 'help' to
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>
> You can reach the person managing the list at
> bitcoin-development-owner@lists•sourceforge.net
>
> When replying, please edit your Subject line so it is more specific
> than "Re: Contents of Bitcoin-development digest..."
>
> Today's Topics:
>
> 1. Re: Long-term mining incentives (Thomas Voegtlin)
> 2. Re: Long-term mining incentives (Tier Nolan)
> 3. Re: Long-term mining incentives (Alex Mizrahi)
> 4. Re: Proposed alternatives to the 20MB step function (Tier
> Nolan)
> 5. Re: Block Size Increase (Oliver Egginger)
> 6. Re: Block Size Increase (Angel Leon)
>
>
> ---------- Forwarded message ----------
> From: Thomas Voegtlin <thomasv@electrum•org>
> To: Gavin Andresen <gavinandresen@gmail•com>, Bitcoin Dev <
> bitcoin-development@lists•sourceforge.net>
> Cc:
> Date: Wed, 13 May 2015 11:49:13 +0200
> Subject: Re: [Bitcoin-development] Long-term mining incentives
>
> Le 12/05/2015 18:10, Gavin Andresen a écrit :
> > Added back the list, I didn't mean to reply privately:
> >
> > Fair enough, I'll try to find time in the next month or three to write up
> > four plausible future scenarios for how mining incentives might work:
> >
> > 1) Fee-supported with very large blocks containing lots of tiny-fee
> > transactions
> > 2) Proof-of-idle supported (I wish Tadge Dryja would publish his
> > proof-of-idle idea....)
> > 3) Fees purely as transaction-spam-prevention measure, chain security via
> > alternative consensus algorithm (in this scenario there is very little
> > mining).
> > 4) Fee supported with small blocks containing high-fee transactions
> moving
> > coins to/from sidechains.
> >
> > Would that be helpful, or do you have some reason for thinking that we
> > should pick just one and focus all of our efforts on making that one
> > scenario happen?
> >
> > I always think it is better, when possible, not to "bet on one horse."
> >
>
> Sorry if I did not make myself clear. It is not about betting on one
> single horse, or about making one particular scenario happen. It is not
> about predicting whether something else will replace PoW in the future,
> and I am in no way asking you to focus your efforts in one particular
> direction at the expenses of others. Various directions will be explored
> by various people, and that's great.
>
> I am talking about what we know today. I would like an answer to the
> following question: Do we have a reason to believe that Bitcoin can work
> in the long run, without involving technologies that have not been
> invented yet? Is there a single scenario that we know could work?
>
> Exotic and unproven technologies are not an answer to that question. The
> reference scenario should be as boring as possible, and as verifiable as
> possible. I am not asking what you think is the most likely to happen,
> but what is the most likely to work, given the knowledge we have today.
>
> If I was asking: "Can we send humans to the moon by 2100?", I guess your
> answer would be: "Yes we can, because it has been done in the past with
> chemical rockets, and we know how to build them". You would probably not
> use a space elevator in your answer.
>
> The reason I am asking that is, there seems to be no consensus among
> core developers on how Bitcoin can work without miner subsidy. How it
> *will* work is another question.
>
>
>
>
> ---------- Forwarded message ----------
> From: Tier Nolan <tier.nolan@gmail•com>
> To:
> Cc: Bitcoin Dev <bitcoin-development@lists•sourceforge.net>
> Date: Wed, 13 May 2015 11:14:06 +0100
> Subject: Re: [Bitcoin-development] Long-term mining incentives
> On Wed, May 13, 2015 at 10:49 AM, Thomas Voegtlin <thomasv@electrum•org>
> wrote:
>
>>
>> The reason I am asking that is, there seems to be no consensus among
>> core developers on how Bitcoin can work without miner subsidy. How it
>> *will* work is another question.
>>
>
> The position seems to be that it will continue to work for the time being,
> so there is still time for more research.
>
> Proof of stake has problems with handling long term reversals. The main
> proposal is to slightly weaken the security requirements.
>
> With POW, a new node only needs to know the genesis block (and network
> rules) to fully determine which of two chains is the strongest.
>
> Penalties for abusing POS inherently create a time horizon. A suggested
> POS security model would assume that a full node is a node that resyncs
> with the network regularly (every N blocks). N would be depend on the
> network rules of the coin.
>
> The alternative is that 51% of the holders of coins at the genesis block
> can rewrite the entire chain. The genesis block might not be the first
> block, a POS coin might still use POW for minting.
>
>
> https://blog.ethereum.org/2014/11/25/proof-stake-learned-love-weak-subjectivity/
>
>
> ---------- Forwarded message ----------
> From: Alex Mizrahi <alex.mizrahi@gmail•com>
> To: Bitcoin Dev <bitcoin-development@lists•sourceforge.net>
> Cc:
> Date: Wed, 13 May 2015 13:31:47 +0300
> Subject: Re: [Bitcoin-development] Long-term mining incentives
>
>
>> With POW, a new node only needs to know the genesis block (and network
>> rules) to fully determine which of two chains is the strongest.
>>
>
> But this matters if a new node has access to the globally strongest chain.
> If attacker is able to block connections to legitimate nodes, a new node
> will happily accept attacker's chain.
>
> So PoW, by itself, doesn't give strong security guarantees. This problem
> is so fundamental people avoid talking about it.
>
> In practice, Bitcoin already embraces "weak subjectivity" e.g. in form of
> checkpoints embedded into the source code. So it's hard to take PoW purists
> seriously.
>
>
> ---------- Forwarded message ----------
> From: Tier Nolan <tier.nolan@gmail•com>
> To:
> Cc: Bitcoin Development <bitcoin-development@lists•sourceforge.net>
> Date: Wed, 13 May 2015 11:43:08 +0100
> Subject: Re: [Bitcoin-development] Proposed alternatives to the 20MB step
> function
> On Sat, May 9, 2015 at 4:36 AM, Gregory Maxwell <gmaxwell@gmail•com>
> wrote:
>
>> An example would
>> be tx_size = MAX( real_size >> 1, real_size + 4*utxo_created_size -
>> 3*utxo_consumed_size).
>
>
> This could be implemented as a soft fork too.
>
> * 1MB hard size limit
> * 900kB soft limit
>
> S = block size
> U = UTXO_adjusted_size = S + 4 * outputs - 3 * inputs
>
> A block is valid if S < 1MB and U < 1MB
>
> A 250 byte transaction with 2 inputs and 2 outputs would have an adjusted
> size of 252 bytes.
>
> The memory pool could be sorted by fee per adjusted_size.
>
> Coin selection could be adjusted so it tries to have at least 2 inputs
> when creating transactions, unless the input is worth more than a threshold
> (say 0.001 BTC).
>
> This is a pretty weak incentive, especially if the block size is
> increased. Maybe it will cause a "nudge"
>
>
> ---------- Forwarded message ----------
> From: Oliver Egginger <bitcoin@olivere•de>
> To: bitcoin-development@lists•sourceforge.net
> Cc:
> Date: Wed, 13 May 2015 12:37:17 +0200
> Subject: Re: [Bitcoin-development] Block Size Increase
> 08.05.2015 at 5:49 Jeff Garzik wrote:
> > To repeat, the very first point in my email reply was: "Agree that 7 tps
> > is too low"
>
> For interbank trading that would maybe enough but I don't know.
>
> I'm not a developer but as a (former) user and computer scientist I'm
> also asking myself what is the core of the problem? Personally, for
> privacy reasons I do not want to leave a footprint in the blockchain for
> each pizza. And why should this expense be good for trivial things of
> everyday life?
>
> If one encounters the block boundary, he or she will do more effort or
> give up. I'm thinking most people will give up because their
> transactions are not really economical. It is much better for them to
> use third-partys (or another payment system).
>
> And that's where we are at the heart of the problem. The Bitcoin
> third-party economy. With few exceptions this is pure horror. More worse
> than any used car dealer. And the community just waits that things get
> better. But that will never happen of its own accord. We are living in a
> Wild West Town. So we need a Sheriff and many other things.
>
> We need a small but good functioning economy around the blockchain. To
> create one, we have to accept a few unpleasant truths. I do not know if
> the community is ready for it.
>
> Nevertheless, I know that some companies do a good job. But they have to
> prevail against their dishonest competitors.
>
> People take advantage of the blockchain, because they no longer trust
> anyone. But this will not scale in the long run.
>
> - oliver
>
>
>
>
>
>
>
>
>
>
>
> ---------- Forwarded message ----------
> From: Angel Leon <gubatron@gmail•com>
> To: Oliver Egginger <bitcoin@olivere•de>
> Cc: Bitcoin Dev <bitcoin-development@lists•sourceforge.net>
> Date: Wed, 13 May 2015 07:25:47 -0400
> Subject: Re: [Bitcoin-development] Block Size Increase
> > Personally, for privacy reasons I do not want to leave a footprint in
> the blockchain for each pizza. And why should this expense be good for
> trivial things of everyday life?
>
> Then what's the point?
> Isn't this supposed to be an Open transactional network, it doesn't matter
> if you don't want that, what matters is what people want to do with it, and
> there's nothing you can do to stop someone from opening a wallet and buying
> a pizza with it, except the core of the problem you ask yourself about,
> which is, the minute this goes mainstream and people get their wallets out
> the whole thing will collapse, regardless of what you want the blockchain
> for.
>
> Why talk about the billions of unbanked and all the romantic vision if you
> can't let them use their money however they want in a decentralized
> fashion. Otherwise let's just go back to centralized banking because the
> minute you want to put things off chain, you need an organization that will
> need to respond to government regulation and that's the end for the
> billions of unbanked to be part of the network.
>
>
> http://twitter.com/gubatron
>
> On Wed, May 13, 2015 at 6:37 AM, Oliver Egginger <bitcoin@olivere•de>
> wrote:
>
>> 08.05.2015 at 5:49 Jeff Garzik wrote:
>> > To repeat, the very first point in my email reply was: "Agree that 7 tps
>> > is too low"
>>
>> For interbank trading that would maybe enough but I don't know.
>>
>> I'm not a developer but as a (former) user and computer scientist I'm
>> also asking myself what is the core of the problem? Personally, for
>> privacy reasons I do not want to leave a footprint in the blockchain for
>> each pizza. And why should this expense be good for trivial things of
>> everyday life?
>>
>> If one encounters the block boundary, he or she will do more effort or
>> give up. I'm thinking most people will give up because their
>> transactions are not really economical. It is much better for them to
>> use third-partys (or another payment system).
>>
>> And that's where we are at the heart of the problem. The Bitcoin
>> third-party economy. With few exceptions this is pure horror. More worse
>> than any used car dealer. And the community just waits that things get
>> better. But that will never happen of its own accord. We are living in a
>> Wild West Town. So we need a Sheriff and many other things.
>>
>> We need a small but good functioning economy around the blockchain. To
>> create one, we have to accept a few unpleasant truths. I do not know if
>> the community is ready for it.
>>
>> Nevertheless, I know that some companies do a good job. But they have to
>> prevail against their dishonest competitors.
>>
>> People take advantage of the blockchain, because they no longer trust
>> anyone. But this will not scale in the long run.
>>
>> - oliver
>>
>>
>>
>>
>>
>>
>>
>>
>>
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>> _______________________________________________
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>> Bitcoin-development@lists•sourceforge.net
>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
>>
>
>
>
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> Widest out-of-the-box monitoring support with 50+ applications
> Performance metrics, stats and reports that give you Actionable Insights
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>
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^ permalink raw reply [flat|nested] 37+ messages in thread* Re: [Bitcoin-development] Long-term mining incentives
@ 2015-05-18 2:29 Michael Jensen
0 siblings, 0 replies; 37+ messages in thread
From: Michael Jensen @ 2015-05-18 2:29 UTC (permalink / raw)
To: bitcoin-development
I think the basic reality is that a) an arbitrarily elevated level of
hashing is fundamental to a truly decentralised, autonomous network,
and is an essential cost to maintaining Bitcoin, b) there are no signs
that this fact will change, c) there must be some replacement to the
current system of incentivisation through debasement (inflation).
Arguments about limiting block size versus setting minimum fees are
confused because ultimately both mechanisms should ideally achieve the
same outcome: a market price for transactions which means that a) not
everyone who would make a TX if TXs were unpriced does so (reduced
number of TXs) and b) the market price is used to fund hashing. This
is just the nature of prices, it always reduces effective demand, but
without prices supply must collapse and the market must fail.
Regardless, if every time the network gets close to reaching the block
size limit the development community gets scared and raises the limit,
then such a limit will never be an effective tool for setting a market
price. Personally I think trying to artificially limit supply to
create a price for transactions is a needlessly complicated way of
trying to achieve this goal. I think minimum fees for transactions is
a better, simpler option.
I would go a step further and say that the development community will
struggle forever if it tries to play the role of the centralised
economic planner in setting prices for network services. The community
should look at more dynamic ways to let network users express their
preferences for security and their willingness to pay for it. I've
written on the issue -
https://medium.com/@mike0/securing-bitcoin-5-determing-an-optimal-funding-level-9873fa1322a7
As far as the argument that fees will drive people away from Bitcoin,
I can't believe that. Everything we desire has to be paid for somehow.
People will accept a fee for making Bitcoin transactions if Bitcoin as
a result is a stable, useful service. Bitcoin as both a currency and
as a transaction network has strong network effects, so, ignoring
sidechains, it's highly unrealistic that a mandatory fee will drive
people away from Bitcoin when the alternatives are dubious knock-offs
with no network effect, and fiat, which is even worse in regards to
the hidden and malignant costs it exacts.
^ permalink raw reply [flat|nested] 37+ messages in thread
end of thread, other threads:[~2015-05-28 10:31 UTC | newest]
Thread overview: 37+ messages (download: mbox.gz / follow: Atom feed)
-- links below jump to the message on this page --
2015-05-11 16:28 [Bitcoin-development] Long-term mining incentives Thomas Voegtlin
2015-05-11 16:52 ` insecurity
2015-05-11 17:29 ` Gavin Andresen
2015-05-12 12:35 ` Thomas Voegtlin
[not found] ` <CABsx9T1h7p3hDr7ty43uxsYs-oNRpndzg=dowST2tXtogxRm2g@mail.gmail.com>
[not found] ` <555210AF.3090705@electrum.org>
2015-05-12 16:10 ` Gavin Andresen
2015-05-12 16:21 ` Dave Hudson
2015-05-12 21:24 ` Pedro Worcel
2015-05-12 23:48 ` Adam Back
2015-05-13 15:41 ` Gavin Andresen
2015-05-13 20:05 ` Pedro Worcel
2015-05-13 9:49 ` Thomas Voegtlin
2015-05-13 10:14 ` Tier Nolan
2015-05-13 10:31 ` Alex Mizrahi
2015-05-13 11:29 ` Tier Nolan
2015-05-13 12:26 ` Alex Mizrahi
2015-05-13 13:24 ` Gavin
2015-05-13 13:28 ` Tier Nolan
2015-05-13 14:26 ` Alex Mizrahi
2015-05-13 23:46 ` Jorge Timón
2015-05-14 0:11 ` Jorge Timón
2015-05-14 0:48 ` Aaron Voisine
2015-05-14 0:58 ` Pieter Wuille
2015-05-14 1:13 ` Aaron Voisine
2015-05-14 1:19 ` Pieter Wuille
2015-05-14 1:31 ` Aaron Voisine
2015-05-14 2:34 ` Aaron Voisine
2015-05-16 20:35 ` Owen Gunden
2015-05-16 22:18 ` Tom Harding
2015-05-17 1:08 ` Aaron Voisine
2015-05-14 0:44 ` Melvin Carvalho
2015-05-25 18:31 ` Mike Hearn
2015-05-26 18:47 ` Thomas Voegtlin
2015-05-27 21:59 ` Mike Hearn
2015-05-27 22:22 ` Gregory Maxwell
2015-05-28 10:30 ` Mike Hearn
2015-05-13 17:49 Damian Gomez
2015-05-18 2:29 Michael Jensen
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