Re: [bitcoin-dev] Regarding setting a lower minrelaytxfee

From: Aaradhya Chauhan <chauhanansh.me@gmail•com>
To: "David A. Harding" <dave@dtrt•org>,
	 Bitcoin Protocol Discussion
	<bitcoin-dev@lists•linuxfoundation.org>
Subject: Re: [bitcoin-dev] Regarding setting a lower minrelaytxfee
Date: Sat, 30 Jul 2022 13:25:55 +0530	[thread overview]
Message-ID: <CAGHFe1C-u7DbTtg0dz+p8Moh=FbFN5dKZow5HgtMpxcVyS2ZdA@mail.gmail.com> (raw)
In-Reply-To: <f889c7fc9db56ed448237c8a4091abaa@dtrt.org>

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I'm not suggesting to initiate it anytime soon. But suppose, let's take a
situation where Bitcoin reaches and oscillates above 200k to 500k USD, then
1 sat/vB could be equivalent to 10 sat/vB of today, hampering the "dust
requirement" (ignoring inflation). I discussed this on the Bitcoin
subreddit and some suggested that the developers, in the future, have to
just change the "default minimum relay tx fee" from 1000 today to 500 at
that time. Obviously it's gonna be a little above 500, if we count
inflation. That would simply equate to the current situation. Do you think
that would be a problem?

On Fri, 29 Jul 2022 at 09:08, David A. Harding via bitcoin-dev <
bitcoin-dev@lists•linuxfoundation.org> wrote:

> On 2022-07-26 02:45, Peter Todd via bitcoin-dev wrote:
> > On Tue, Jul 26, 2022 at 01:56:05PM +0530, Aaradhya Chauhan via
> > bitcoin-dev wrote:
> >> [...] in its early days, 1 sat/vB was a good dust protection
> >> measure. But now, I think it's a bit high [...] I think it can be done
> >> easily [...]
> >
> > [...] lowering the dust limit now is a good way to ensure
> > the entire ecosystem is ready to deal with those conditions.
>
> I don't have anything new to add to the conversation at this time, but I
> did want to suggest a clarification and summarize some previous
> discussion that might be useful.
>
> I think the phrasing by Aaradhya Chauhan and Peter Todd above are
> conflating the minimum output amount policy ("dust limit") with the
> minimum transaction relay feerate policy ("min tx relay fee").  Any
> transaction with an output amount below a node's configured dust limit
> (a few hundred sat by default) will not be relayed by that node no
> matter how high of a feerate it pays.  Any transaction with feerate
> below a nodes's minimum relay feerate (1 sat/vbyte by default) will not
> be relayed by that node even if the node has unused space in its mempool
> and peers that use BIP133 feefilters to advertise that they would accept
> low feerates.
>
> Removing the dust limit was discussed extensively a year ago[1] with
> additional follow-up discussion about eight months ago.[2]
>
> Lowering the minimum relay feerate was seriously proposed in a patch to
> Bitcoin Core four years ago[3] with additional related PRs being opened
> to ease the change.  Not all of the related PRs have been merged yet,
> and the original PR was closed.  I can't easily find some of the
> discussions I remember related to that change, but IIRC part of the
> challenge was that lower minimum relay fees reduce the cost of a variety
> of DoS attacks which could impact BIP152 compact blocks and erlay
> efficiency, could worsen transaction pinning, may increase IBD time due
> to more block chain data, and have other adverse effects.  Additionally,
> we've found in the past that some people who build systems that take
> advantage of low feerates become upset when feerates rise, sometimes
> creating problems even for people who prepared for eventual feerate
> rises.
>
> Compared to the complexity of lowering the minimum feerate, the
> challenges of preventing denial/degregation-of-service attacks, and
> dealing with a fragmented userbase, the economic benefit of reducing the
> feerates for the bottom of the mempool seems small---if we lower min
> feerates to 1/10th their current values and that results in the
> equivalent of an extra 10 blocks of transactions getting mined a day,
> then users save a total of 0.09 BTC (~$1,800 USD) per day and miners
> earn an extra 0.01 BTC ($200 USD) per day (assuming all other things
> remain equal).[4]
>
> -Dave
>
> [1]
>
> https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2021-August/019307.html
> [2]
>
> https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2021-December/019635.html
> [3] https://github.com/bitcoin/bitcoin/pull/13922
> [4] The current min relay fee is 1 sat/vbyte.  There are ~1 million
> vbytes in a block that can be allocated to regular transactions.  Ten
> blocks at the current min relay fee would pay (10 * 1e6 / 1e8 = 0.1 BTC)
> in fees.  Ten blocks at 1/10 sat/vbyte would thus pay 0.01 BTC in fees,
> which is $200 USD @ $20k/BTC.  Thus users would save (0.1 - 0.01 = 0.09
> BTC = $1,800 USD @ $20k/BTC).
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