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From: Dave Hudson <dave@hashingit.com>
In-Reply-To: <CABsx9T37jE3AtmUOOuW+emLGTparbS6OozPRL_hCrC+2JEzxgQ@mail.gmail.com>
Date: Sun, 31 May 2015 15:17:10 +0100
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To: Gavin Andresen <gavinandresen@gmail.com>
Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Fwd: Block Size Increase Requirements
Precedence: list


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> On 31 May 2015, at 13:52, Gavin Andresen <gavinandresen@gmail.com> =
wrote:
>=20
> On Sat, May 30, 2015 at 9:31 PM, Chun Wang <1240902@gmail.com =
<mailto:1240902@gmail.com>> wrote:
> If someone propagate a 20MB block, it will take at best 6 seconds for
> us to receive to verify it at current configuration, result of one
> percent orphan rate increase.
>=20
> That orphan rate increase will go to whoever is producing the 20MB =
blocks, NOT you.

There's an interesting incentives question if the mining fees ever =
become large enough to be interesting. Given two potential blocks on =
which to build then for the best interests of the system we'd want =
miners to select the block that confirmed the largest number of =
transactions since that puts less pressure on the network later. This is =
at odds with the incentives for our would-be block maker though because =
the incentive for mining would be to use whichever block left the =
largest potential fees available; that's generally going to be the =
smaller of the two.

This, of course, only gets worse as the block reward reduces and fees =
become the dominant way for miners to be paid (and my hypothesis that =
eventually this could lead to miners trying to deliberately orphan =
earlier blocks to "steal" fees because the fixed block reward is no =
longer the dominant part of their income).

When coupled with the block propagation delay problem increasing the =
risk of orphan races I'm pretty sure that this actually leads to miners =
having an incentive to continually mine smaller blocks, and that's aside =
from the question of whether smaller blocks will push up fees (which =
also benefits miners).=20


Cheers,
Dave



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<html><head><meta http-equiv=3D"Content-Type" content=3D"text/html =
charset=3Dus-ascii"></head><body style=3D"word-wrap: break-word; =
-webkit-nbsp-mode: space; -webkit-line-break: after-white-space;" =
class=3D""><br class=3D""><div><blockquote type=3D"cite" class=3D""><div =
class=3D"">On 31 May 2015, at 13:52, Gavin Andresen &lt;<a =
href=3D"mailto:gavinandresen@gmail.com" =
class=3D"">gavinandresen@gmail.com</a>&gt; wrote:</div><br =
class=3D"Apple-interchange-newline"><div class=3D""><div dir=3D"ltr" =
class=3D""><div class=3D"gmail_extra"><div class=3D"gmail_quote">On Sat, =
May 30, 2015 at 9:31 PM, Chun Wang <span dir=3D"ltr" class=3D"">&lt;<a =
href=3D"mailto:1240902@gmail.com" target=3D"_blank" =
class=3D"">1240902@gmail.com</a>&gt;</span> wrote:<blockquote =
class=3D"gmail_quote" style=3D"margin:0px 0px 0px =
0.8ex;border-left-width:1px;border-left-color:rgb(204,204,204);border-left=
-style:solid;padding-left:1ex"><span class=3D"">
If someone propagate a 20MB block, it will take at best 6 seconds for<br =
class=3D"">
us to receive to verify it at current configuration, result of one<br =
class=3D"">
percent orphan rate increase.</span></blockquote><div class=3D""><br =
class=3D""></div><div class=3D"">That orphan rate increase will go to =
whoever is producing the 20MB blocks, NOT =
you.</div></div></div></div></div></blockquote><br =
class=3D""></div><div>There's an interesting incentives question if the =
mining fees ever become large enough to be interesting. Given two =
potential blocks on which to build then for the best interests of the =
system we'd want miners to select the block that confirmed the largest =
number of transactions since that puts less pressure on the network =
later. This is at odds with the incentives for our would-be block maker =
though because the incentive for mining would be to use whichever block =
left the largest potential fees available; that's generally going to be =
the smaller of the two.</div><div><br class=3D""></div><div>This, of =
course, only gets worse as the block reward reduces and fees become the =
dominant way for miners to be paid (and my hypothesis that eventually =
this could lead to miners trying to deliberately orphan earlier blocks =
to "steal" fees because the fixed block reward is no longer the dominant =
part of their income).</div><div><br class=3D""></div><div>When coupled =
with the block propagation delay problem increasing the risk of orphan =
races I'm pretty sure that this actually leads to miners having an =
incentive to continually mine smaller blocks, and that's aside from the =
question of whether smaller blocks will push up fees (which also =
benefits miners).&nbsp;</div><div><br class=3D""></div><div><br =
class=3D""></div><div>Cheers,</div><div>Dave</div><div><br =
class=3D""></div><br class=3D""></body></html>=

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