Received: from sog-mx-4.v43.ch3.sourceforge.com ([172.29.43.194] helo=mx.sourceforge.net) by sfs-ml-3.v29.ch3.sourceforge.com with esmtp (Exim 4.76) (envelope-from ) id 1YLtGW-000523-9s for bitcoin-development@lists.sourceforge.net; Thu, 12 Feb 2015 12:53:08 +0000 Received-SPF: pass (sog-mx-4.v43.ch3.sourceforge.com: domain of gmail.com designates 74.125.82.176 as permitted sender) client-ip=74.125.82.176; envelope-from=alex.mizrahi@gmail.com; helo=mail-we0-f176.google.com; Received: from mail-we0-f176.google.com ([74.125.82.176]) by sog-mx-4.v43.ch3.sourceforge.com with esmtps (TLSv1:RC4-SHA:128) (Exim 4.76) id 1YLtGV-00059H-56 for bitcoin-development@lists.sourceforge.net; Thu, 12 Feb 2015 12:53:08 +0000 Received: by mail-we0-f176.google.com with SMTP id x3so9850418wes.7 for ; Thu, 12 Feb 2015 04:53:01 -0800 (PST) MIME-Version: 1.0 X-Received: by 10.194.60.15 with SMTP id d15mr7757258wjr.72.1423745579595; Thu, 12 Feb 2015 04:52:59 -0800 (PST) Received: by 10.27.148.13 with HTTP; Thu, 12 Feb 2015 04:52:59 -0800 (PST) In-Reply-To: References: <20150212064719.GA6563@savin.petertodd.org> Date: Thu, 12 Feb 2015 14:52:59 +0200 Message-ID: From: Alex Mizrahi To: Bitcoin Dev Content-Type: multipart/alternative; boundary=047d7ba976c485bc81050ee399e9 X-Spam-Score: -0.6 (/) X-Spam-Report: Spam Filtering performed by mx.sourceforge.net. See http://spamassassin.org/tag/ for more details. -1.5 SPF_CHECK_PASS SPF reports sender host as permitted sender for sender-domain 0.0 FREEMAIL_FROM Sender email is commonly abused enduser mail provider (alex.mizrahi[at]gmail.com) -0.0 SPF_PASS SPF: sender matches SPF record 1.0 HTML_MESSAGE BODY: HTML included in message -0.1 DKIM_VALID_AU Message has a valid DKIM or DK signature from author's domain 0.1 DKIM_SIGNED Message has a DKIM or DK signature, not necessarily valid -0.1 DKIM_VALID Message has at least one valid DKIM or DK signature X-Headers-End: 1YLtGV-00059H-56 Subject: Re: [Bitcoin-development] replace-by-fee v0.10.0rc4 X-BeenThere: bitcoin-development@lists.sourceforge.net X-Mailman-Version: 2.1.9 Precedence: list List-Id: List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Thu, 12 Feb 2015 12:53:08 -0000 --047d7ba976c485bc81050ee399e9 Content-Type: text/plain; charset=UTF-8 > Miners are *not* incentivised to earn the most money in the next block > possible. They are incentivised to maximise their return on investment. > This would be right if you assume that all Bitcoin miners act as a single entity. In that case it is true that that entity's goal is to maximize overall ROI. But each miner makes decisions on his own. Are you familiar with a concept of Nash equilibrium, prisoner's dilemma, etc? The fact that nobody is using this kind of a behavior right now doesn't mean that we can rely on it. For example, Peercoin was horribly broken in 6 months after its release (e.g. people reported that they are able to generate 50 consecutive blocks simply by bringing a cold wallet online) and yet nobody bothered to exploit it, and it managed to acquire non-negligible "market cap". So we have an empiric evidence that proof-of-stake miners are motivated to keep network secure. So, maybe, we should switch to proof-of-stake, if it was demonstrated that it is secure? There are good reasons to not switch to proof-of-stake. Particularly, the kind which is used in Peercoin is not game-theoretically sound. So even if it works right now, it can fail in a big way once attackers will really get around to it. An attack requires significant knowledge, effort and, possibly, capital, so it might be only feasible on a certain scale. So, well, anyway, suppose Peter Todd is the only person interested in maintaining replace-by-fee patches right now, and you can talk him into abandoning them. OK, perhaps zero-confirmation payments will be de-facto secure for a couple of years. And thus a lot of merchants will rely on zero-confirmation payments protected by nothing but a belief in honest miners, as it is damn convenient. But, let's say, 5 years from now, some faction of miners who own soon-to-be-obsolete equipment will decide to boost their profits with a replace-by-fee pool and a corresponding wallet. They can market it as "1 of 10 hamburgers are free" if they have 10% of the total hashpower. So would you take a responsibility for pushing the approach which isn't game-theoretically sound? --047d7ba976c485bc81050ee399e9 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable
=C2=A0
Miners are not=C2=A0incentivised to earn the most money= in the next block possible. They are incentivised to maximise their return= on investment.

This would be = right if you assume that all Bitcoin miners act as a single entity. In that= case it is true that that entity's goal is to maximize overall ROI.

But each miner makes decisions on his own. Are you f= amiliar with a concept of Nash equilibrium, prisoner's dilemma, etc?

The fact that nobody is using this kind of a behavio= r right now doesn't mean that we can rely on it.

For example, Peercoin was horribly broken in 6 months after its release = (e.g. people reported that they are able to generate 50 consecutive blocks = simply by bringing a cold wallet online) and yet nobody bothered to exploit= it, and it managed to acquire non-negligible "market cap".
=

So we have an empiric evidence that proof-of-stake mine= rs are motivated to keep network secure. So, maybe, we should switch to pro= of-of-stake, if it was demonstrated that it is secure?

=
There are good reasons to not switch to proof-of-stake. Particularly, = the kind which is used in Peercoin is not game-theoretically sound. So even= if it works right now, it can fail in a big way once attackers will really= get around to it. An attack requires significant knowledge, effort and, po= ssibly, capital, so it might be only feasible on a certain scale.

So, well, anyway, suppose Peter Todd is the only person int= erested in maintaining replace-by-fee patches right now, and you can talk h= im into abandoning them.
OK, perhaps zero-confirmation payments w= ill be de-facto secure for a couple of years. And thus a lot of merchants w= ill rely on zero-confirmation payments protected by nothing but a belief in= honest miners, as it is damn convenient.

But, let= 's say, 5 years from now, some faction of miners who own soon-to-be-obs= olete equipment will decide to boost their profits with a replace-by-fee po= ol and a corresponding wallet. They can market it as "1 of 10 hamburge= rs are free" if they have 10% of the total hashpower.

So would you take a responsibility for pushing the approach which = isn't game-theoretically sound?

=C2=A0
--047d7ba976c485bc81050ee399e9--