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From: Rusty Russell <rusty@rustcorp.com.au>
To: Tier Nolan <tier.nolan@gmail.com>
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Date: Mon, 18 May 2015 11:12:11 +0930
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Cc: Bitcoin Development <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Proposed alternatives to the 20MB step
	function
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Tier Nolan <tier.nolan@gmail.com> writes:
> On Sat, May 16, 2015 at 1:22 AM, Rusty Russell <rusty@rustcorp.com.au>
> wrote:
>> 3) ... or maybe not, if any consumed UTXO was generated before the soft
>>    fork (reducing Tier's perverse incentive).
>
> The incentive problem can be fixed by excluding UTXOs from blocks before a
> certain count.
>
> UTXOs in blocks before 375000 don't count.

OK.  Be nice if these were cleaned up, but I guess it's a sunk cost.

>> 4) How do we measure UTXO size?  There are some constant-ish things in
>>    there (eg. txid as key, height, outnum, amount).  Maybe just add 32
>>    to scriptlen?
>>
>
> They can be stored as a fixed digest.  That can be any size, depending on
> security requirements.
>
> Gmaxwell's cost proposal is 3-4 bytes per UTXO change.  It isn't
> 4*UXTO.size - 3*UTXO.size

He said "utxo_created_size" not "utxo_created" so I assumed scriptlen?

> It is only a small nudge.  With only 10% of the block space to play with it
> can't be massive.

But you made that number up?  The soft cap and hard byte limit are
different beasts, so there's no need for soft cost cap < hard byte
limit.

> This requires that transactions include scriptPubKey information when
> broadcasting them.

Brilliant!  I completely missed that possibility...

>> 5) Add a CHECKSIG cost.  Naively, since we allow 20,000 CHECKSIGs and
>>    1MB blocks, that implies a cost of 50 bytes per CHECKSIG (but counted
>>    correctly, unlike now).
>>
>> This last one implies that the initial cost limit would be 2M, but in
>> practice probably somewhere in the middle.
>>
>>   tx_cost = 50*num-CHECKSIG
>>                 + tx_bytes
>>                 + 4*utxo_created_size
>>                 - 3*utxo_consumed_size
>>
>> > A 250 byte transaction with 2 inputs and 2 outputs would have an adjusted
>> > size of 252 bytes.
>>
>> Now cost == 352.
>
> That is to large a cost for a 10% block change.  It could be included in
> the block size hard fork though.

I don't think so.  Again, you're mixing units.

> I think have one combined "cost" for
> transactions is good.  It means much fewer spread out transaction checks.
> The code for the cost formula would be in one place.

Agreed!  Unfortunately there'll always be 2, because we really do want a
hard byte limit: it's total tx bytes which brings most concerns about
centralization.  But ideally it'll be so rarely hit that it can be ~
ignored (and certainly not optimized for).

Cheers,
Rusty.