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boundary="0000000000003f00ef05f5bfb385" X-Mailman-Approved-At: Tue, 28 Feb 2023 16:36:13 +0000 Subject: Re: [bitcoin-dev] BIP proposal: Fee-redistribution contracts X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.15 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Tue, 28 Feb 2023 10:03:02 -0000 --0000000000003f00ef05f5bfb385 Content-Type: text/plain; charset="UTF-8" If you allow me to comment (just with a bird eye, have not read the paper only the abstract) I think the Bitcoin community may consider the intuition of somewhat "Future Saving" through TX fees: ie, the idea of saving a ratio of the fees (say half to be decreased to half with each reward halving)is worth thinking of: Keep in mind that the block reward problem will not start only in 2140, but when the mining cost becomes comparable to the reward value (could this be as near as 2040?I don't know, you know the answer better than me) . -So, why not start a fee splitting mechanism in analogy to reward splitting mechanism *(the saved ratio is half the total now, and to be halved with every Bitcoin reward halving until a threshold is reached where the saved amounts gets added to the low block reward)* Ofcourse this is very rough, a game theoritic model has to be built with the appropriate incentives and costs to get the exact numbers . Thank you for letting me comment in your list . Regards . Shymaa M Arafat On Tue, Feb 28, 2023, 02:18 HcaFc_jbe via bitcoin-dev < bitcoin-dev@lists.linuxfoundation.org> wrote: > Greetings, Brno is a beautiful city. > > > > > Long term miner incentives remain an open question, and this is an > interesting proposal, but it has flaws. > > > > > -----To intervene or not intervene > > --No intervention: When block subsidies do run out, years from now, it's > possible that we live in a world where ordinals, LN-settlements, and > on-chain transactions will be filling block space to the extent that miners > are incentivized to continue mining. > > --Intervention: Tail-emissions? Demurrage? > Fee-redistribution schemes like this one? > > Really, it is too early to say whether mining incentives _will even_ be a > problem, let alone _what_ the solution(s) should be. > > This fee-redistribution scheme aims to solve > > 1. Undercutting attacks [which have been precluded AFAIK with anti > fee-sniping > > nLocktime since Core 0.11] > > 2. Fee-variance between blocks, whether due to the mining gap or > variance in block > > demand. > > > > --Flaws > > 0. A miner in this world could be more aggressive in excluding certain > blocks to the detriment of their counter parties. I.e. If a miner can > ignore high-fee transactions, knowing they won't receive the _benefits_ of > mining them [or less benefit], they can exclude these transactions without > losing fees. E.g. if a miner is or represents a counterparty in a LN > commitment transaction, and this counter party prefers that a time > threshold is reached [so that they can mine a different version of the > commitment transaction] then under this scheme they can avoid mining the > first commitment transaction without really losing its fee, since it's fee > is socialized anyway. This attack then becomes free or very cheap. > > 1. How would this smart-contract actually be constructed? The paper > contains no references to op_codes or implementations. You do mention that > you are not a bitcoin dev, so that's fair. AFAIK this isn't even _possible_ > with the current Script, and could remain impossible. Maybe DLCs could be > applied somehow. IDK. > > 2.0. I think it will be difficult to convince the ecosystem that the > mining incentive structure should be changed from competitive to > cooperative. This effectively changes the mining ecosystem into one giant > mining pool. How would this affect mining centralization? > > 2.1. How do we achieve miner consensus in implementing the > fee-redistribution scheme? And what is the consensus for updating? > > ---Paper-nits: > > I believe the distribution in block creation is not exponential, but > poisson -> on page two it's described as exponential. > > Cheers, > > -Paul > > ------- Original Message ------- > On Monday, February 27th, 2023 at 8:32 AM, Rastislav Budinsky via > bitcoin-dev wrote: > > Hello, > > I am working on my Bachelor's thesis, in which a new way of collecting > transaction fees is introduced or rather how they are distributed. > > When a miner mines a block he takes all the fees currently. However with > the proposed solution he takes only fraction M and remaining fraction C is > sent to one of more contracts. One contract at its simplest collects fees > from the miner and at the same time redistributes it back to the miner. > > This means no new Bitcoins are introduced, only the one collected from > fees are collected, averaged and rewarded back to the miner in a "smarter" > way. > > We can have multiple such contracts, where each averages the collected > fees over different time frames. I would like to refer you to our paper for > more details [1], which is not yet in the final form. > > Benefits are discussed in the paper [1] as well, mainly it should make > mining more secure and predictable against drastic fluctuations in fees. I > personally do not think miners should oppose this solution as for most > miners it should make a better mining environment. Similarly in a sense to > what mining pools bring. > > I would like to know your opinions about this proposal and we can also > discuss the needed parameters introduced with such a solution if you are in > favor of it or think it might be interesting. > > Introducing this solution soon enough will not make a great difference to > miners with current block rewards and at the same time the contracts will > be adapted before transaction fees become the main source of income for > miners. > > As I have very little to none developer experience from blockchain's point > (especially on Bitcoin), I am not sure if this would be possible as > soft-fork as scripts in Bitcoin are stateless I suppose. > However maybe a generally spendable script by anyone holding the funds is > created, which a miner of the block would be the one spending it, and the > correct logic of following the contracts is embedded into consensus nodes > themselves. Thus perhaps a less disruptive solution to hard-fork. > > Once again, I would love to know your opinions about this & I apologize > for making this a bit less conventional BIP proposal. > > [1] https://arxiv.org/abs/2302.04910 > > Best regards. > > > _______________________________________________ > bitcoin-dev mailing list > bitcoin-dev@lists.linuxfoundation.org > https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev > --0000000000003f00ef05f5bfb385 Content-Type: text/html; charset="UTF-8" Content-Transfer-Encoding: quoted-printable
If you allow me to comment (just with a bird eye, have no= t read the paper only the abstract)

I think the Bitcoin community may consider the intuition of somewhat = "Future Saving" through TX fees:
ie, the i= dea of saving a ratio of the fees (say half to be decreased to half with ea= ch reward halving)is worth thinking of:
Keep in mind= that the block reward problem will not start only in 2140, but when the mi= ning cost becomes comparable to the reward value (could this be as near as = 2040?I don't know, you know the answer better than me)
.
-So, why not start a fee splitting=C2=A0 me= chanism in analogy to reward splitting mechanism=C2=A0
(the saved ratio is half the total now, and to be halved with ever= y Bitcoin reward halving until a threshold is reached where the saved amoun= ts gets added to the low block reward)

Ofcourse this is very rough, a game th= eoritic model has to be built with the appropriate incentives and costs to = get the exact numbers
.
Thank= you for letting me comment in your list
.
Regards
.
Shyma= a M Arafat=C2=A0

On Tue, Feb 28, 2023, 02:18 HcaFc_jbe via bitcoin-dev= <bitcoin-dev@l= ists.linuxfoundation.org> wrote:

Greetings, = Brno is a beautiful city.=C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 = =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2= =A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0

=C2=A0

Long term miner incentives remain an open question, and this is an inte= resting proposal, but it has flaws.=C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2= =A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 = =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0

=C2=A0=C2=A0=C2=A0= =C2=A0=C2=A0=C2=A0=C2=A0=C2=A0=C2=A0 =C2=A0

-----To int= ervene or not intervene

--No intervention:=C2=A0 When bl= ock subsidies do run out, years from now, it's possible that we live in= a world where ordinals, LN-settlements, and on-chain transactions will be = filling block space to the extent that miners are incentivized to continue = mining.=C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2= =A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 = =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2= =A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 = =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2= =A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 = =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 =C2=A0 --Intervention: Tail-emiss= ions? Demurrage? Fee-redistribution schemes like this one?


Really, it is too early to say whether mining incentives _will even_= be a problem, let alone _what_ the solution(s) should be.


This fee-redistribution scheme aims to solve=C2=A0=C2=A0=C2=A0

=C2=A0=C2=A0=C2=A0=C2=A0 1. Undercutting attacks [which have= been precluded AFAIK with anti fee-sniping=C2=A0

nLocktime since Core 0.11]

= =C2=A0=C2=A0=C2=A0=C2=A0 2. Fee-variance between blocks, whether due to th= e mining gap or variance in block=C2=A0

demand.

=C2=A0


= --Flaws

0. A miner in this world could be more aggressiv= e in excluding certain blocks to the detriment of their counter parties. I.= e. If a miner can ignore high-fee transactions, knowing they won't rece= ive the _benefits_ of mining them [or less benefit], they can exclude these= transactions without losing fees. E.g. if a miner is or represents a count= erparty in a LN commitment transaction, and this counter party prefers that= a time threshold is reached [so that they can mine a different version of = the commitment transaction] then under this scheme they can avoid mining th= e first commitment transaction without really losing its fee, since it'= s fee is socialized anyway. This attack then becomes free or very cheap.=C2= =A0


1. How would this smart-contract actually be con= structed? The paper contains no references to op_codes or implementations. = You do mention that you are not a bitcoin dev, so that's fair. AFAIK th= is isn't even _possible_ with the current Script, and could remain impo= ssible. Maybe DLCs could be applied somehow. IDK.


2.= 0. I think it will be difficult to convince the ecosystem that the mining i= ncentive structure should be changed from competitive to cooperative. This = effectively changes the mining ecosystem into one giant mining pool. How wo= uld this affect mining centralization?

2.1. How do we ac= hieve miner consensus in implementing the fee-redistribution scheme? And wh= at is the consensus for updating?=C2=A0


---Paper-ni= ts:

I believe the distribution in block creation is not = exponential, but poisson -> on page two it's described as exponentia= l.


Cheers,=C2=A0=C2=A0=C2=A0=C2=A0

-Paul


------- Original Message -------
On Monday, February 27th, 2023 at 8:32 AM, Rastislav Budinsky via b= itcoin-dev <bitcoin-dev@lists.linuxfoundation.org= > wrote:

Hello,

I am working on my B= achelor's thesis, in which a new way of collecting transaction fees is = introduced or rather how they are distributed.

Whe= n a miner mines a block he takes all the fees currently. However with the p= roposed solution he takes only fraction M and remaining fraction C is sent = to one of more contracts. One contract at its simplest collects fees from t= he miner and at the same time redistributes it back to the miner.

This means no new Bitcoins are introduced, only the on= e collected from fees are collected, averaged and rewarded back to the mine= r in a "smarter" way.

We can have = multiple such contracts, where each averages the collected fees over differ= ent time frames. I would like to refer you to our paper for more details [1= ], which is not yet in the final form.

Benefit= s are discussed in the paper [1] as well, mainly it should make mining more= secure and predictable against drastic fluctuations in fees. I personally = do not think miners should oppose this solution as for most miners it shoul= d make a better mining environment. Similarly in a sense to what mining poo= ls bring.

I would like to know your opinions about= this proposal and we can also discuss the needed parameters introduced wit= h such a solution if you are in favor of it or think it might be interestin= g.

Introducing this solution soon enough will not = make a great difference to miners with current block rewards and at the sam= e time the contracts will be adapted before transaction fees become the mai= n source of income for miners.

As I have very litt= le to none developer experience from blockchain's point (especially on = Bitcoin), I am not sure if this would be possible as soft-fork as scripts i= n Bitcoin are stateless I suppose.
However maybe a generally spen= dable script by anyone holding the funds is created, which a miner of the b= lock would be the one spending it, and the correct logic of following the c= ontracts is embedded into consensus nodes themselves. Thus perhaps a less d= isruptive solution to hard-fork.

Once again, I wou= ld love to know your opinions about this & I apologize for making this = a bit less conventional BIP proposal.


Best regards.

_______________________________________________
bitcoin-dev mailing list
bitcoin-dev@lists.linuxfoundation.org
https://lists.linuxfoundati= on.org/mailman/listinfo/bitcoin-dev
--0000000000003f00ef05f5bfb385--