From: Matt Whitlock <bip@mattwhitlock.name>
To: Mike Hearn <mike@plan99.net>, Justus Ranvier <justusranvier@gmail.com>
Date: Mon, 16 Jun 2014 14:10:33 -0400
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Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Incentivizing the running of full nodes
Precedence: list

On Monday, 16 June 2014, at 7:59 pm, Mike Hearn wrote:
> >
> > This is a cool idea, but doesn't it generate some perverse incentives? If
> > I'm running a full node and I want to pay CheapAir for some plane tickets,
> > I'll want to pay in the greatest number of individual transactions possible
> 
> Peers can calculate rewards based on number of inputs or total kb used:
> you're paying for kilobytes with either coin age or fees no matter what. So
> I think in practice it's not a big deal.

So effectively, if you pay for your bandwidth/storage usage via fees, then the reward system is constrained by proof of burn, and if you pay for your usage via coin age, then the reward system is constrained by proof of stake.

Now another concern: won't this proposal increase the likelihood of a network split? The free-market capitalist nodes will want to charge their peers and will kick and ban peers that don't pay up (and will pay their peers to avoid being kicked and banned themselves), whereas the socialist nodes will want all of their peers to feed them transactions out of the goodness of their hearts and will thus necessarily be relegated to connecting only to other altrustic peers. Thus, the network will comprise two incompatible ideological camps, whose nodes won't interconnect.