Subject: Re: [bitcoindev] BIP 8.5: Flag day activation based on nlocktime signaling

From: /dev /fd0 <[email-masked]>
Date: Mon, 19 Aug 2024 10:50:07 -0700 (PDT)

Hi Fabian,

Thanks for your feedback.

> Requiring users to make transactions in order to participate in order to 
signal is problematic because it comes with economic costs to them that 
depends a lot on their personal setup. What if they have their funds in a 
vault? Then they have to go through a lengthy and costly process to get 
them out. Or if they simply timelocked them for a number of years? Then 
they can not participate at all.

I consider it a feature because users with 'economic activity' would be 
participating in the process. This is better than social media wars. I am 
sure users who hold bitcoin for long term would have some amount in hot 
wallets for regular transactions. If not, they can always do transactions 
to create another vault or add to existing vault.

> Motivated spammers can, however, simulate support for low costs if they 
have the right setup. I would guess spammers have a few UTXOs laying around 
in hot wallets and would be willing to invest some money if it serves their 
interests.

Spam could be analyzed and filtered by different developers, users etc. in 
the discussion before flag day activation.

> Depending on whether the users pay high or low fees in these signaling 
transactions, they can choose their own adventure of misaligned incentives.

I don't see a problem with users competing to pay more fees on-chain.

> If the users pay high fees in these transactions some miners that don't 
care about this will just mine the transaction not because they want to 
signal but instead because it serves their economic interest. This means 
you would need buy-in from all miners (template builders) in the world for 
this to work on not get seemingly great signaling for these high fee 
transactions even though the miners just want to earn the fees and may not 
even know about a softfork proposal.

- Miners are not signaling support in this process
- Its easy for a mining pool to exclude these transactions in their blocks 
if they aren't ready for a soft fork
- Its a feature and not bug that miners leave some money on the table for 
signaling reluctance

Signaling in this BIP or BIP 8/9 is just a coordination mechanism and 
miners can always false-signal. 

> The low fee transactions would still need to be kept in a mempool 
somewhere to prevent manipulation via eviction from mempools or the 
signaling transactions simply disappearing. Keeping a transaction in the 
mempool has many problems which is apparent from all the L2 research that 
is going into this topic.

Bitcoin would work as expected and no change in mempool policies is 
required for this process. Also, these can be everyday transactions and not 
necessarily transactions done with the only purpose of signaling.

> As far as I can tell there are some ordinal protocols that use the lock 
time field for something, how do you keep these two concepts apart?

Nobody is using BIP numbers in nLockTime for ordinals. There is a protocol 
which uses 21 and it won't affect this process. 

> "Community can analyze these transactions" That won't work. What do you 
define as the lock-in mechanism? I suppose you would count the number of 
blocks that had at least one signaling transaction in them. Ok, that could 
work but that would mean that it's really not a lot of transactions that 
would need to get into blocks via one of the manipulation methods I 
mentioned above.

I am not sure which part won't work because blocks and transactions are 
often analyzed by different developers, users etc. There is no lock-in 
mechanism. Everyone would share their analysis after 3 months and it could 
differ from each other. Number of blocks with at least one signaling 
transaction is a good example. As with any other soft fork activation 
discussion, these analysis would be evaluated together with technical 
trade-offs to prepare for a flag day activation.

nLockTime signaling is to record the overall sentiment without social media 
debates.

> Users broadcasting their own transactions with signaling is really just 
an unnecessary misdirection. If a miner signals by including these 
transactions in a block it doesn't matter if they include one or 100 of 
these in a block. A block can just signal or not signal. So it would 
probably play out in a way that users wouldn't send any signaling 
transactions and miners would just include a single signaling self payment 
in their block template. Which then is just a worse way of doing the 
signaling with the version field.

Its not a misdirection because such things would be easy to identify in the 
analysis after 3 months.

> I also don't think that the readiness signaling mechanism is actually the 
reason why bip8/9 are controversial so I don't think your proposal really 
would make things better even if the signaling part would work well.

- BIP 9 is controversial because it gives a small amount of hashpower veto 
power over any soft fork activation
- BIP 8 is controversial because there are lot disagreements whether LOT 
should be TRUE or FALSE

My proposal is flag day activation or UASF which requires economic nodes to 
run the software to activate new consensus rules. nLockTime signaling is 
only added to gather overall sentiment before moving forward, analyze and 
discuss it which could help in coordination.

> Miners may "signal" by including high fee transactions even though they 
don't know about the process at all

As I said earlier, miners are only required to be active and involved in 
the process. They aren't voting for or against any soft fork in this 
process. Steve Lee was able to contact most mining pools recently to make 
them aware of the risks associated with non-standard transactions so I 
think everyone would know the process if its used at some point.

> Users (if they would even need/want to participate) would bare economic 
cost or may even have excluded themselves from the process already without 
knowing it

Users that are not involved in any economic activity on-chain can continue 
to discuss these proposals on social media.

> Spammers have many avenues today to exploit this mechanism at minimal 
cost, all of these loop holes would need to be closed/defended

It is possible to differentiate spam from regular transactions and analysis 
by different developers after 3 months would make this easier.

> If you want to follow up please first take a look at the level of detail 
that BIP8 and BIP9 provide and try to get your proposal at least somewhere 
close to that level of detail if you want to have it taken serious as a BIP 
proposal. Otherwise, if this is just an idea or a question then maybe make 
it a Stack Exchange question or maybe a delving bitcoin post.

The level of detail in this BIP draft is kept minimum to avoid unnecessary 
complexity. I like simple things that can do the job. I have reviewed BIP 
8, 9, 148 and others before writing this draft. Maybe I will add a FAQ 
section and more details on the website that will be used for this BIP.

Its neither a question nor the first time I am trying to improve BIP 8: 
https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2022-May/020452.html

> And please don't self-assign BIP numbers, it's irritating.

BIP has "XXX" mentioned in the draft and 8.5 was the subject to convey the 
idea is to get something between BIP 8 and BIP 9. Its irritating for me as 
well that improvement proposals for a decentralized protocol need numbers 
from a central authority to appease some developers, users etc.

/dev/fd0
floppy disk guy

On Monday, August 19, 2024 at 2:13:25 PM UTC Fabian wrote:

> Hi,
>
> that would be a NACK from me. I think this idea has many issues, I am just 
> listing the ones that came to my head first:
>
>
>    - Requiring users to make transactions in order to participate in 
>    order to signal is problematic because it comes with economic costs to them 
>    that depends a lot on their personal setup. What if they have their funds 
>    in a vault? Then they have to go through a lengthy and costly process to 
>    get them out. Or if they simply timelocked them for a number of years? Then 
>    they can not participate at all.
>    - Motivated spammers can, however, simulate support for low costs if 
>    they have the right setup. I would guess spammers have a few UTXOs laying 
>    around in hot wallets and would be willing to invest some money if it 
>    serves their interests.
>    - Depending on whether the users pay high or low fees in these 
>    signaling transactions, they can choose their own adventure of misaligned 
>    incentives...
>    - If the users pay high fees in these transactions some miners that 
>    don't care about this will just mine the transaction not because they want 
>    to signal but instead because it serves their economic interest. This means 
>    you would need buy-in from all miners (template builders) in the world for 
>    this to work on not get seemingly great signaling for these high fee 
>    transactions even though the miners just want to earn the fees and may not 
>    even know about a softfork proposal.
>    - If the miners pay low fees still all miners that offer out of band 
>    acceleration of transactions would need to buy-in and not allow these 
>    transactions to be boosted to prevent manipulation.
>    - The low fee transactions would still need to be kept in a mempool 
>    somewhere to prevent manipulation via eviction from mempools or the 
>    signaling transactions simply disappearing. Keeping a transaction in the 
>    mempool has many problems which is apparent from all the L2 research that 
>    is going into this topic.
>    - As far as I can tell there are some ordinal protocols that use the 
>    lock time field for something, how do you keep these two concepts apart?
>    - "Community can analyze these transactions" That won't work. What do 
>    you define as the lock-in mechanism? I suppose you would count the number 
>    of blocks that had at least one signaling transaction in them. Ok, that 
>    could work but that would mean that it's really not a lot of transactions 
>    that would need to get into blocks via one of the manipulation methods I 
>    mentioned above.
>    - Thinking more about the previous point: Users broadcasting their own 
>    transactions with signaling is really just an unnecessary misdirection. If 
>    a miner signals by including these transactions in a block it doesn't 
>    matter if they include one or 100 of these in a block. A block can just 
>    signal or not signal. So it would probably play out in a way that users 
>    wouldn't send any signaling transactions and miners would just include a 
>    single signaling self payment in their block template. Which then is just a 
>    worse way of doing the signaling with the version field.
>    - I also don't think that the readiness signaling mechanism is 
>    actually the reason why bip8/9 are controversial so I don't think your 
>    proposal really would make things better even if the signaling part would 
>    work well.
>
>
> That was bit ramblin, so, to summarize the top 3 issues I could come up 
> with off the top of my head why this wouldn't work:
>
>    - Miners may "signal" by including high fee transactions even though 
>    they don't know about the process at all
>    - Users (if they would even need/want to participate) would bare 
>    economic cost or may even have excluded themselves from the process already 
>    without knowing it
>    - Spammers have many avenues today to exploit this mechanism at 
>    minimal cost, all of these loop holes would need to be closed/defended
>
>
> If you want to follow up please first take a look at the level of detail 
> that BIP8 and BIP9 provide and try to get your proposal at least somewhere 
> close to that level of detail if you want to have it taken serious as a BIP 
> proposal. Otherwise, if this is just an idea or a question then maybe make 
> it a Stack Exchange question or maybe a delving bitcoin post.
>
> And please don't self-assign BIP numbers, it's irritating.
>
> Best,
> Fabian
> On Monday, August 19th, 2024 at 7:08 AM, /dev /fd0 <[email-masked]> 
> wrote:
>
> Hi Bitcoin Developers,
>
> I am proposing an alternative way to activate soft forks. Please let me 
> know if you see any issues with this method.
>
> BIP: XXX 
> Layer: Consensus (soft fork) 
> Title: nLockTime signaling and flag day activation
> Author: /dev/fd0 <[email-masked]> 
> Status: Draft 
> Type: Standards Track 
> Created: 2024-08-19 
> License: Public Domain
>
> ## Abstract
>
> This document describes a process to activate soft forks using flag day 
> after `nLockTime` signaling and discussion.
>
> ## Motivation
>
> BIP 8 and BIP 9 are controversial. This BIP is an alternative which 
> addresses the problems with other activation methods.
>
> ## Specification
>
> - Assign numbers to different soft fork proposals or use their BIP numbers
> - Users can broadcast their transactions with one of these numbers used as 
> `nLockTime` to show support
> - Miners inlcuding a transaction in block would signal readiness for a 
> soft fork
> - Community can analyze these transactions after 3 months and prepare for 
> a flag day activation of soft fork
>
> Example:
> Use 119 to signal support for OP_CHECKTEMPLATEVERIFY in `nLockTime`
>
> ## Reference implementation
>
> Activation: 
> https://github.com/bitcoin/bitcoin/commit/ab91bf39b7c11e9c86bb2043c24f0f377f1cf514.diff
>
> Exclusion in relay or mining: 
> https://github.com/bitcoinknots/bitcoin/commit/18cd7b0ef6eaeacd06678c6d192b6cacc9d7eee5.diff
>
> ---
>
> If a transaction does not get included in block for a long time, users can 
> replace it with another transaction spending same inputs and use a 
> different `nLockTime`.
>
> /dev/fd0
> floppy disk guy
>
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