path: root/87/7e82d06e6e91493f1b953c3a540e1f5c701d64

Return-Path: <fresheneesz@gmail.com>
Received: from smtp4.osuosl.org (smtp4.osuosl.org [IPv6:2605:bc80:3010::137])
 by lists.linuxfoundation.org (Postfix) with ESMTP id 68870C002D
 for <bitcoin-dev@lists.linuxfoundation.org>;
 Mon,  2 Jan 2023 04:53:59 +0000 (UTC)
Received: from localhost (localhost [127.0.0.1])
 by smtp4.osuosl.org (Postfix) with ESMTP id 2EF6041477
 for <bitcoin-dev@lists.linuxfoundation.org>;
 Mon,  2 Jan 2023 04:53:59 +0000 (UTC)
DKIM-Filter: OpenDKIM Filter v2.11.0 smtp4.osuosl.org 2EF6041477
Authentication-Results: smtp4.osuosl.org;
 dkim=pass (2048-bit key) header.d=gmail.com header.i=@gmail.com
 header.a=rsa-sha256 header.s=20210112 header.b=goH1fOD4
X-Virus-Scanned: amavisd-new at osuosl.org
X-Spam-Flag: NO
X-Spam-Score: -2.098
X-Spam-Level: 
X-Spam-Status: No, score=-2.098 tagged_above=-999 required=5
 tests=[BAYES_00=-1.9, DKIM_SIGNED=0.1, DKIM_VALID=-0.1,
 DKIM_VALID_AU=-0.1, DKIM_VALID_EF=-0.1, FREEMAIL_FROM=0.001,
 HTML_MESSAGE=0.001, RCVD_IN_DNSWL_NONE=-0.0001, SPF_HELO_NONE=0.001,
 SPF_PASS=-0.001] autolearn=ham autolearn_force=no
Received: from smtp4.osuosl.org ([127.0.0.1])
 by localhost (smtp4.osuosl.org [127.0.0.1]) (amavisd-new, port 10024)
 with ESMTP id NZDy1mWtsx5W
 for <bitcoin-dev@lists.linuxfoundation.org>;
 Mon,  2 Jan 2023 04:53:57 +0000 (UTC)
X-Greylist: whitelisted by SQLgrey-1.8.0
DKIM-Filter: OpenDKIM Filter v2.11.0 smtp4.osuosl.org E33424086F
Received: from mail-ej1-x632.google.com (mail-ej1-x632.google.com
 [IPv6:2a00:1450:4864:20::632])
 by smtp4.osuosl.org (Postfix) with ESMTPS id E33424086F
 for <bitcoin-dev@lists.linuxfoundation.org>;
 Mon,  2 Jan 2023 04:53:56 +0000 (UTC)
Received: by mail-ej1-x632.google.com with SMTP id ud5so64467191ejc.4
 for <bitcoin-dev@lists.linuxfoundation.org>;
 Sun, 01 Jan 2023 20:53:56 -0800 (PST)
DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail.com; s=20210112;
 h=cc:to:subject:message-id:date:from:in-reply-to:references
 :mime-version:from:to:cc:subject:date:message-id:reply-to;
 bh=HvydMIiOOo6Kokv/hdFuz8ueytV7YaKqckUjv9GXk5o=;
 b=goH1fOD4+Dz9wwdQZrke17sEv+m0fvxAWzOrSXAJ3hSrEbNSy/PkTCtnqFHEkesCAT
 X/aM+rHGligMPpVl0qCOCC57EPs4Q6mtnFMUOnWAiDKn+gZUtBQ8SemNqdnvpI0Ejdps
 xEYcCtzGxh5SYVw3UtUvF1X4iwhVHD5VqvGiaPthShajtjYEYfEOUugED6B2i1iRSxf5
 25x4QIOnpQnFullKhyp9FDiwb2BwUQdZS/5l7r35cWJ8Mn7xKoWJswyUo3oB+3rI7fNu
 6k7aqm1R4AmjaOs8qpoUbuEw3ebXJsoZ74LEtMtumfMAj8n9R7sccgx+KDPY5/BST8ju
 KQYQ==
X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed;
 d=1e100.net; s=20210112;
 h=cc:to:subject:message-id:date:from:in-reply-to:references
 :mime-version:x-gm-message-state:from:to:cc:subject:date:message-id
 :reply-to;
 bh=HvydMIiOOo6Kokv/hdFuz8ueytV7YaKqckUjv9GXk5o=;
 b=JfOXBBH+zMQkje+59my2xZCoE/JcD5zB9UbJgGZIy/qwW2zMnd2qwNrNcrSG+XoP44
 Vp7ixw0PB3guvy8sa5iyLh1U44J9ghb07rc/uAyc/ELUtr4ryvi6eyPIRHChI74YJ7vE
 OOskM5Pijkm30ZrefXpHVXrz7W/9Yh3bXatAL01v5frGSqDoZte7iQBUhSCSzvDhZsd+
 GGGqZLv3zyKle0Px8SSR+oXAD5N8q+FjsQgUFeTrtzfd0Euf9NGnr4UJ0c+cs63R9uqo
 pSil7gI9C/+qs+F8QlnQY1lGCQR5+EkdLssZychdD29BMwk/on9mulkgsM1h5KbDBaqT
 kBhg==
X-Gm-Message-State: AFqh2kpU08iNRkSdVTM63fcHQfKZ9at29SkAMoec9nhd6WeJqwymphRE
 k8pI21I/MucDvP9s8B/Ocmv4DQEi8touuEwhB4M=
X-Google-Smtp-Source: AMrXdXvJkmAzB+zvYmcK+AsUKpoosHdHrNLw4MWwsBkniHHtVNkoY4v+GbRZJBoIPl4boInGKXemmP4H8J/ZLSkl7OE=
X-Received: by 2002:a17:907:7782:b0:7c0:e380:3d44 with SMTP id
 ky2-20020a170907778200b007c0e3803d44mr3306146ejc.498.1672635234999; Sun, 01
 Jan 2023 20:53:54 -0800 (PST)
MIME-Version: 1.0
References: <174623371-de649b28ce46dea2e588f2ef794decdb@pmq1v.m5r2.onet>
In-Reply-To: <174623371-de649b28ce46dea2e588f2ef794decdb@pmq1v.m5r2.onet>
From: Billy Tetrud <billy.tetrud@gmail.com>
Date: Sun, 1 Jan 2023 22:53:39 -0600
Message-ID: <CAGpPWDa6GusMVXAFxTQ=oakwApHyYQYieFwygj5CZwen6yZp6g@mail.gmail.com>
To: jk_14@op.pl
Content-Type: multipart/alternative; boundary="00000000000005646e05f140bd2f"
X-Mailman-Approved-At: Mon, 02 Jan 2023 12:46:13 +0000
Cc: Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] Pseudocode for robust tail emission
X-BeenThere: bitcoin-dev@lists.linuxfoundation.org
X-Mailman-Version: 2.1.15
Precedence: list
List-Id: Bitcoin Protocol Discussion <bitcoin-dev.lists.linuxfoundation.org>
List-Unsubscribe: <https://lists.linuxfoundation.org/mailman/options/bitcoin-dev>, 
 <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=unsubscribe>
List-Archive: <http://lists.linuxfoundation.org/pipermail/bitcoin-dev/>
List-Post: <mailto:bitcoin-dev@lists.linuxfoundation.org>
List-Help: <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=help>
List-Subscribe: <https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev>, 
 <mailto:bitcoin-dev-request@lists.linuxfoundation.org?subject=subscribe>
X-List-Received-Date: Mon, 02 Jan 2023 04:53:59 -0000

--00000000000005646e05f140bd2f
Content-Type: text/plain; charset="UTF-8"
Content-Transfer-Encoding: quoted-printable

> is surely better than not delaying it.

I might agree, but I don't think it really solves the problem well enough
to be worth it. Any solution that would solve the problem better would make
delaying halvings unnecessary.

> there is non-zero risk that people will hoard it more and more, according
to old Gresham's law

Gresham's law doesn't apply here. Gresham's law is about the interaction
between two currencies with a fixed, usually government-enforced exchange
rate. You seem to be saying that Bitcoin will be hoarded because Bitcoin
inflation reduces every halving. But even with 0 inflation, it certainly
won't cause all Bitcoin to be hoarded. Also, "hoarding" is also known as
"saving", and there's nothing wrong with saving. The spectre of deflation
comes from a misunderstanding of deflation and why it happens during bad
economic times. It is an effect, not a cause.

On Sun, Jan 1, 2023, 15:23 <jk_14@op.pl> wrote:

>
> Yes, the idea is:
> if mining activity is growing - let's execute consecutive halvings
> but if miner exodus has happened - let's delay next halving until mining
> activity is recovered to previous levels
>
> If it gets to the point where a sudden drop in mining difficulty happens =
-
> delaying the next halving may be not sufficient to correct, but is surely
> better than not delaying it.
>
> While Bitcoin is better and better money with every halving in comparisio=
n
> to other types of money - there is non-zero risk that people will hoard i=
t
> more and more, according to old Gresham's law ("HODL"). And this way
> decreasing liquidity / transactions volume. The positive feedback loop - =
is
> my real concern here.
>
> Regarding the relationship between difficulty and security - I fully agre=
e.
> But ASIC technology is already matured. And also any technology
> breakthrough is a short event within 4 years period.
> So growth of difficulty could be gained by technology breakthrough, but
> any sudden drop of difficulty would be always an issue, while there is no
> such thing as: ASIC technology regression.
>
> Obviously, not complicated solution would be better than complicated one.
>
>
> W dniu 2022-12-30 19:21:10 u=C5=BCytkownik Billy Tetrud <billy.tetrud@gma=
il.com>
> napisa=C5=82:
>
> If the idea is to ensure that a catastrophic miner exodus doesn't happen,
> the "difference" you're calculating should only care about downward
> differences. Upward differences indicate more mining activity and so
> shouldn't cause a halving skip.
>
> But I don't think any scheme like this that only acts on the basis of
> difficulty will be sufficient. If it gets to the point where a sudden dro=
p
> in mining difficulty happens, it is very likely that simply delaying the
> next halving or even ending halving all together will not be sufficient t=
o
> correct for whatever is causing hashrate to tank. There is also the dange=
r
> of simple difficulty stagnation, which this mechanism wouldn't detect.
>
> The relationship between difficulty and security becomes less and less
> predictable the longer you want to look ahead. There's no long term
> relation between difficulty and any reasonable security target. A securit=
y
> target might be something like "no colluding group with less than $1
> trillion dollars at their disposal could successfully 51% attack the
> network (with a probability of blah blah)". There is no way to today
> program in any code that detects based on difficult alone when that
> criteria is violated. You would have to program in assumptions about the
> cost of hashrate projected into the future.
>
> I can't think of any robust automatic way to do this. I think to a certai=
n
> degree, it will have to be a change that happens in a fork of some kind
> (soft or hard) periodically (every 10 years? 30 years?). The basic
> relations needed is really the cost in Bitcoin of the security target (ie
> the minimum number of Bitcoin it should take to 51% attack the system) an=
d
> the cost in Bitcoin of acquiring a unit of hashrate. This could be simply
> input into the code, or could use some complicated oracle system. But wit=
h
> that relation, the system could be programmed to calculate the difficulty
> necessary to keep the system secure.
>
> Once that is in place, the system could automatically adjust the subsidy
> up or down to attract more or less miners, or it could adjust the block
> size up or down to change the fee market such that more or less total fee=
s
> are collected each block to attract more or less miners.
>
> On Tue, Dec 27, 2022, 09:41 Jaroslaw via bitcoin-dev <
> bitcoin-dev@lists.linuxfoundation.org> wrote:
>
>>
>> It seems like the more elegant solution could be by using a chainwork
>> parameter instead.
>> i.e. comparison just before halving - if the last 210,000 block interval
>> has a higher chainwork difference between the begining and the end of
>> interval
>> than any other such inter-halving interval before.
>>
>> LIttle digression yet:
>> A system in which all users participate in ensuring its security looks
>> better than one in which only some (i.e. active) of them participate (an=
d
>> passive stakeholders are de facto free riders)
>> In my opinion this concept above is only the complement of currently
>> missing mechanism: achieving equilibrium regarding costs of security
>> between two parties with opposing interests.
>> It's easy to understand and - most important - it has no hardcoded value
>> of tail emission - what is the clear proof it is based on a free market.
>> And last but not least, if someone is 100% sure that income from
>> transactions will takeover security support from block subsidy - accepti=
ng
>> such proposal is like putting the money where the mouth is: this safety
>> measure will never be triggered, then (no risk of fork)
>>
>>
>> Best Regards
>> Jaroslaw
>>
>>
>>
>> W dniu 2022-12-23 20:29:20 u=C5=BCytkownik Jaroslaw via bitcoin-dev <
>> bitcoin-dev@lists.linuxfoundation.org> napisa=C5=82:
>> >
>> Necessary or not - it doesn't hurt to plan the robust model, just in
>> case. The proposal is:
>>
>> Let every 210,000 the code calculate the average difficulty of 100 last
>> retargets (100 fit well in 210,000 / 2016 =3D 104.166)
>> and compare with the maximum of all such values calculated before, every
>> 210,000 blocks:
>>
>>
>> if average_diff_of_last_100_retargets >
>> maximum_of_all_previous_average_diffs
>>         do halving
>> else
>>         do nothing
>>
>>
>> This way:
>>
>> 1. system cannot be played
>> 2. only in case of destructive halving: system waits for the recovery of
>> network security
>>
>>
>> Best Regards
>> Jaroslaw
>> _______________________________________________
>> bitcoin-dev mailing list
>> bitcoin-dev@lists.linuxfoundation.org
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>
>>
>>
>> _______________________________________________
>> bitcoin-dev mailing list
>> bitcoin-dev@lists.linuxfoundation.org
>> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>>
>

--00000000000005646e05f140bd2f
Content-Type: text/html; charset="UTF-8"
Content-Transfer-Encoding: quoted-printable

<div dir=3D"ltr"><div dir=3D"auto">&gt;=C2=A0<span style=3D"font-size:12.8p=
x">is surely better than not delaying it.</span><div dir=3D"auto"><span sty=
le=3D"font-size:12.8px"><br></span></div><div dir=3D"auto"><span style=3D"f=
ont-size:12.8px">I might agree, but I don&#39;t think it really solves the =
problem well enough to be worth it. Any solution that would solve the probl=
em better would make delaying halvings unnecessary.=C2=A0</span></div><div =
dir=3D"auto"><span style=3D"font-size:12.8px"><br></span></div><div dir=3D"=
auto"><span style=3D"font-size:12.8px">&gt;=C2=A0</span>there is non-zero r=
isk that people will hoard it more and more, according to old Gresham&#39;s=
 law</div><div dir=3D"auto"><br></div><div dir=3D"auto">Gresham&#39;s law d=
oesn&#39;t apply here. Gresham&#39;s law is about the interaction between t=
wo currencies with a fixed, usually government-enforced exchange rate. You =
seem to be saying that Bitcoin will be hoarded because Bitcoin inflation re=
duces every halving. But even with 0 inflation, it certainly won&#39;t caus=
e all Bitcoin to be hoarded. Also, &quot;hoarding&quot; is also known as &q=
uot;saving&quot;, and there&#39;s nothing wrong with saving. The spectre of=
 deflation comes from a misunderstanding of deflation and why it happens du=
ring bad economic times. It is an effect, not a cause.</div><br><div class=
=3D"gmail_quote" dir=3D"auto"><div dir=3D"ltr" class=3D"gmail_attr">On Sun,=
 Jan 1, 2023, 15:23  &lt;<a href=3D"mailto:jk_14@op.pl" target=3D"_blank">j=
k_14@op.pl</a>&gt; wrote:<br></div><blockquote class=3D"gmail_quote" style=
=3D"margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-left:1ex"><div><br=
>Yes, the idea is:<br>if mining activity is growing - let&#39;s execute con=
secutive halvings<br>but if miner exodus has happened - let&#39;s delay nex=
t halving until mining activity is recovered to previous levels<br><br>If i=
t gets to the point where a sudden drop in mining difficulty happens - dela=
ying the next halving may be not sufficient to correct, but is surely bette=
r than not delaying it.<br><br>While Bitcoin is better and better money wit=
h every halving in comparision to other types of money - there is non-zero =
risk that people will hoard it more and more, according to old Gresham&#39;=
s law (&quot;HODL&quot;). And this way decreasing liquidity / transactions =
volume. The positive feedback loop - is my real concern here.<br><br>Regard=
ing the relationship between difficulty and security - I fully agree.<br>Bu=
t ASIC technology is already matured. And also any technology breakthrough =
is a short event within 4 years period.<br>So growth of difficulty could be=
 gained by technology breakthrough, but any sudden drop of difficulty would=
 be always an issue, while there is no such thing as: ASIC technology regre=
ssion.</div>
<div><br>Obviously, not complicated solution would be better than complicat=
ed one.</div>
<div>=C2=A0</div>
<div>=C2=A0</div>
<div>W dniu 2022-12-30 19:21:10 u=C5=BCytkownik Billy Tetrud &lt;<a href=3D=
"mailto:billy.tetrud@gmail.com" rel=3D"noreferrer" target=3D"_blank">billy.=
tetrud@gmail.com</a>&gt; napisa=C5=82:</div>
<blockquote style=3D"margin-right:0;margin-left:7px;border-left:2px solid o=
range;padding-left:8px">
<div dir=3D"ltr">
<div dir=3D"auto">If the idea is to ensure that a catastrophic miner exodus=
 doesn&#39;t happen, the &quot;difference&quot; you&#39;re calculating shou=
ld only care about downward differences. Upward differences indicate more m=
ining activity and so shouldn&#39;t cause a halving skip.
<div dir=3D"auto">
<div dir=3D"auto">=C2=A0</div>
<div dir=3D"auto">But I don&#39;t think any scheme like this that only acts=
 on the basis of difficulty will be sufficient. If it gets to the point whe=
re a sudden drop in mining difficulty happens, it is very likely that simpl=
y delaying the next halving or even ending halving all together will not be=
 sufficient to correct for whatever is causing hashrate to tank. There is a=
lso the danger of simple difficulty stagnation, which this mechanism wouldn=
&#39;t detect.=C2=A0</div>
<div dir=3D"auto">=C2=A0</div>
<div>The relationship between difficulty and security becomes less and less=
 predictable the longer you want to look ahead. There&#39;s no long term re=
lation between difficulty and any reasonable security target. A security ta=
rget might be something like &quot;no colluding group with less than $1 tri=
llion dollars at their disposal could successfully 51% attack the network (=
with a probability of blah blah)&quot;. There is no way to today program in=
 any code that detects based on difficult alone when that criteria is viola=
ted. You would have to program in assumptions about the cost of hashrate pr=
ojected into the future.</div>
<div dir=3D"auto">=C2=A0</div>
<div dir=3D"auto">I can&#39;t think of any robust automatic way to do this.=
 I think to a certain degree, it will have to be a change that happens in a=
 fork of some kind (soft or hard) periodically (every 10 years? 30 years?).=
 The basic relations needed is really the cost in Bitcoin of the security t=
arget (ie the minimum number of Bitcoin it should take to 51% attack the sy=
stem) and the cost in Bitcoin of acquiring a unit of hashrate. This could b=
e simply input into the code, or could use some complicated oracle system. =
But with that relation, the system could be programmed to calculate the dif=
ficulty necessary to keep the system secure.</div>
<div dir=3D"auto">=C2=A0</div>
<div dir=3D"auto">Once that is in place, the system could automatically adj=
ust the subsidy up or down to attract more or less miners, or it could adju=
st the block size up or down to change the fee market such that more or les=
s total fees are collected each block to attract more or less miners.=C2=A0=
</div>
</div>
</div>
</div>
<br>
<div class=3D"gmail_quote">
<div class=3D"gmail_attr" dir=3D"ltr">On Tue, Dec 27, 2022, 09:41 Jaroslaw =
via bitcoin-dev &lt;<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org=
" rel=3D"noopener noreferrer" target=3D"_blank">bitcoin-dev@lists.linuxfoun=
dation.org</a>&gt; wrote:</div>
<blockquote class=3D"gmail_quote" style=3D"margin:0px 0px 0px 0.8ex;border-=
left:1px solid #cccccc;padding-left:1ex"><br>It seems like the more elegant=
 solution could be by using a chainwork parameter instead.<br>i.e. comparis=
on just before halving - if the last 210,000 block interval has a higher ch=
ainwork difference between the begining and the end of interval<br>than any=
 other such inter-halving interval before.<br><br>LIttle digression yet:<br=
>A system in which all users participate in ensuring its security looks bet=
ter than one in which only some (i.e. active) of them participate (and pass=
ive stakeholders are de facto free riders)<br>In my opinion this concept ab=
ove is only the complement of currently missing mechanism: achieving equili=
brium regarding costs of security between two parties with opposing interes=
ts.<br>It&#39;s easy to understand and - most important - it has no hardcod=
ed value of tail emission - what is the clear proof it is based on a free m=
arket.<br>And last but not least, if someone is 100% sure that income from =
transactions will takeover security support from block subsidy - accepting =
such proposal is like putting the money where the mouth is: this safety mea=
sure will never be triggered, then (no risk of fork)<br><br><br>Best Regard=
s<br>Jaroslaw<br><br><br><br>W dniu 2022-12-23 20:29:20 u=C5=BCytkownik Jar=
oslaw via bitcoin-dev &lt;<a href=3D"mailto:bitcoin-dev@lists.linuxfoundati=
on.org" rel=3D"noopener noreferrer noreferrer" target=3D"_blank">bitcoin-de=
v@lists.linuxfoundation.org</a>&gt; napisa=C5=82:<br>&gt; <br>Necessary or =
not - it doesn&#39;t hurt to plan the robust model, just in case. The propo=
sal is:<br><br>Let every 210,000 the code calculate the average difficulty =
of 100 last retargets (100 fit well in 210,000 / 2016 =3D 104.166)<br>and c=
ompare with the maximum of all such values calculated before, every 210,000=
 blocks:<br><br><br>if average_diff_of_last_100_retargets &gt; maximum_of_a=
ll_previous_average_diffs<br>=C2=A0 =C2=A0 =C2=A0 =C2=A0 do halving<br>else=
<br>=C2=A0 =C2=A0 =C2=A0 =C2=A0 do nothing<br><br><br>This way:<br><br>1. s=
ystem cannot be played<br>2. only in case of destructive halving: system wa=
its for the recovery of network security<br><br><br>Best Regards<br>Jarosla=
w<br>_______________________________________________<br>bitcoin-dev mailing=
 list<br><a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" rel=3D"no=
opener noreferrer noreferrer" target=3D"_blank">bitcoin-dev@lists.linuxfoun=
dation.org</a><br><a href=3D"https://lists.linuxfoundation.org/mailman/list=
info/bitcoin-dev" rel=3D"noopener noreferrer noreferrer noreferrer" target=
=3D"_blank">https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev<=
/a><br><br><br><br>_______________________________________________<br>bitco=
in-dev mailing list<br><a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.=
org" rel=3D"noopener noreferrer noreferrer" target=3D"_blank">bitcoin-dev@l=
ists.linuxfoundation.org</a><br><a href=3D"https://lists.linuxfoundation.or=
g/mailman/listinfo/bitcoin-dev" rel=3D"noopener noreferrer noreferrer noref=
errer" target=3D"_blank">https://lists.linuxfoundation.org/mailman/listinfo=
/bitcoin-dev<br></a></blockquote>
</div>
</blockquote>
</blockquote></div></div>
</div>

--00000000000005646e05f140bd2f--