Subject: Re: [bitcoin-dev] Fees and the block-finding process

From: Pieter Wuille <[email-masked]>
Date: Tue, 11 Aug 2015 00:52:23 +0200

On Aug 11, 2015 12:18 AM, "Thomas Zander via bitcoin-dev" <
[email-masked]> wrote:

> Have you ever been to a concert that was far away from public transport?
They
> typically set up bus shuttles, or taxis to get people back into town
> afterwards.
> The result there is always you end up waiting forever and it actually may
be
> easier to just walk instead of wait.
> The amount you pay is irrelevant if everyone is paying it. There still is
more
> demand than there is capacity.

That's an incorrect analogy. You choose the rate you pay, and get higher
priority when you pay more. Taxi drivers can't pick out higher-paying
customers in advance.

A better comparison is Uber, which charges more in places with high demand,
and you can accept or refuse in advance. And yes, it remains reliable if
you're among those with the highest willingness to pay.

> So, no, its not unreliable for cheap free transactions.
> Its unreliable for all types of transactions.

If 2500 transactions fit in the block chain per day (assuming constant
size) and there are less than 2500 per hour that pay at least 0.001 BTC in
fee, then any transaction which pays more than 0.001 BTC will have a very
high chance of getting in a small multiple of one hour, since miners
prioritize by feerate.

If there are in addition to that 5000 transactions per hour which pay less,
then yes, they need to compete for the remaiming space and their
confirmation will be unreliable.

The whole point is that whether confirmation at a particular price point is
reliable depends on how much demand there is at that price point. And
increasing the block size out of fear of what might happen is failing to
recognize that it can always happen that there is a sudden change in demand
that outcompetes the rest.

The point is not that evolution towards a specific higher feerate needs to
happen, but an evolution to an ecosystem that accepts that there is never a
guarantee for reliability, unless you're willing to pay more than everyone
else - whatever that number is.

-- 
Pieter