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From: Peter Todd <pete@petertodd.org>
Date: Wed, 04 Dec 2013 11:57:48 +0100
To: Mike Hearn <mike@plan99.net>, Jeremy Spilman <jeremy@taplink.co>
Message-ID: <e4515a76-b4c1-4a5f-a884-6d692b8d3466@email.android.com>
Cc: Bitcoin Dev <bitcoin-development@lists.sourceforge.net>
Subject: Re: [Bitcoin-development] Floating fees and SPV clients
Precedence: list

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Mike Hearn <mike@plan99.net> wrote:
>I think this US/other cultural issue is complicating things more than
>we
>appreciate.
>
>I am trying to imagine in my head how all this will work and what it
>will
>look like with allow_fee, and I just can't see it. Merchants want
>customers
>to pay the sticker price, deviance from that social norm is extremely
>rare
>even after the credit card company contracts that required it have been
>invalidated. The only time it happens to me is when buying flight
>tickets
>with credit cards: but it's only for that method, other payment methods
>are
>still treated as "free" a.k.a interior fees.
>
>If you walk into a physical shop and try to pay a large bill with bags
>of
>pennies, the merchant won't enter into a complicated agreement where
>they
>agree to split the cost of processing with you. They will just reject
>the
>payment out of hand and tell you to get real. It has to be that way
>because
>otherwise the shop would carry the cost of counting all the pennies and
>hauling them around, not the buyer (who "knows" he put the right number
>of
>pennies in the bags).
>
>As a buyer, I do not care about whether my transaction will confirm. If
>I
>try to pay with dust, there is no incentive for me to attach a higher
>fee
>than allow_fee to make that confirm, especially if the merchant has no
>way
>to reject the payment. What's more, as Jeremy points out, no clean fail
>mechanism means large piles of manual work and lots of disputes due to
>payments not clearing before the exchange rate shifts and other things
>like
>that.
>
>Trying to make the success of payment confirmation a two-person dance
>seems
>to have so many edge cases it makes my head hurt. For most
>pay-to-merchant
>cases, it has to be the receivers job to get a transaction confirmed,
>and
>if the sender doesn't follow the instructions a payment should hard
>fail
>and require trying again. If Bitcoin-Qt can't handle that today, that
>does
>seem like a problem.
>
>In the case of a transaction with too-low fee, either the payer can
>> double-spend with a higher fee
>
>
>You can't do that. When a tx doesn't have the right fee attached you're
>out
>of luck today, except for the fact that some pools run with a custom
>child
>pays for parent patch. So respending it would bump priority for some
>miners
>and not others.


Here at the dark wallet conf there seems yo be rough consensus that replacement for fee bumping is a good thing and should be supported; I was talking to Taylor from hive specifically yesterday. The code is trivial on the node side of things and doesn't need consent of anymore than a small minority, and coinjoin forces wallets to handle double spends well anyway. I haven't heard anyone caring about zeroconf safety.

I'll be proposing it for "formal" inclusion in our wallet best practices guidelines.


Also fwiw apparently libbitcoin already implements a memory limited mempool and Amir is open to the idea of it using the satoshi consensus critical code for block validity. (therefor fairly safe mining) I wouldn't be surprised if libbitcoin based nodes start getting usage, and with a limited mempool it is very DoS attack safe for them to relay replacements regardless of miner support.
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