John,

What you are recommending is a drastic change that the conservative bitcoin developers probably wouldn't get behind (but let's see). However proof-of-stake voting on protocol soft-forks has vast implications even beyond the block size limit. Within Freicoin, we have looked at is as a possibility for determining how to distribute the demurrage, a proposal we are calling 'Republicoin' due to the fact that with proxy voting we expect a system to emerge similar to the government budgeting in parliamentary republics. Distributed, non-coersive government by protocol, if you will.

So anyway, even if you get shot down, please continue to pursue this proposal. It very likely has uses that you haven't thought of yet.

Cheers,
Mark

On 6/9/13 9:09 PM, John Dillon wrote:
> It has been suggested that we leave the decision of what the blocksize to be
> entirely up to miners. However this leaves a parameter that affects every
> Bitcoin participant in the control of a small minority. Of course we can not
> force miners to increase the blocksize if they choose to decrease it, because
> the contents of the blocks they make are their decision and their decision
> only. However proposals to leave the maximum size unlimited to allow miners to
> force us to accept arbitrarily large blocks even if the will of the majority of
> Bitcoin participants is that they wish to remain able to validate the
> blockchain.

> What we need is a way to balance this asymetrical power relationship.

> Proof-of-stake voting gives us a way of achieving that balance. Essentially for
> a miner to prove that the majority will of the poeple is to accept a larger
> blocksize they must prove that the majority has in fact voted for that
> increase. The upper limit on the blocksize is then determined by the median of
> all votes, where each txout in the UTXO set is one vote, weighted by txout
> value. A txout without a corresponding vote is considered to be a vote for the
> status quo. To allow the voting process to continue even if coins are "lost"
> votes, including default votes, are weighted inversely according to their age
> in years after 1 year. IE a vote with weight 1BTC that is 1.5 years old will be
> recorded the same as a <1 year old vote weighted as 0.67BTC, and a 1 day old
> and 6 months old UTXO are treated equivalently. The 1 year minimum is simply to
> make voting required no more than once per year. (of course, a real
> implementation should do all of these figures by block height, IE after 52,560
> blocks instead of after 1 year)

> A vote will consist of a txout with a scriptPubKey of the following form:

>     OP_RETURN magic vote_id txid vout vote scriptSig

> Where scriptSig is a valid signature for a transaction with nLockTime
> 500,000,000-1 spending txid:vout to scriptPubKey:

>     OP_HASH160 H(OP_RETURN magic vote_id txid vout vote) OP_EQUAL

> vote_id is the ID of the specific vote being made, and magic is included to
> allow UTXO proof implementations a as yet unspecified way of identifying votes
> and including the weighted median as part of the UTXO tree sums. (it also
> allows SPV clients to verify the vote if the UTXO set is a Patricia tree of
> scriptPubKeys) vote is just the numerical vote itself. The vote must compute
> the median, rather than the mean, so as to not allow someone to skew the vote
> by simply setting their value extremely high. Someone who still remembers their
> statistics classes should chime in on the right way to compute a median in a
> merkle-sum-tree.

> The slightly unusual construction of votes makes implementation by wallet
> software as simple as possible within existing code-paths. Votes could still be
> constructed even in wallets lacking specific voting capability provided the
> wallet software does have the ability to set nLockTime.

> Of course in the future the voting mechanism can be used for additional votes
> with an additional vote_id. For instance the Bitcoin community could vote to
> increase the inflation subsidy, another example of a situation where the wishes
> of miners may conflict with the wishes of the broader community.

> Users may of course actually create these specially encoded txouts themselves
> and get them into the blockchain.  However doing so is not needed as a given
> vote is only required to actually be in the chain by a miner wishing to
> increase the blocksize. Thus we should extend the P2P protocol with a mechanism
> by which votes can be broadcast independently of transactions. To prevent DoS
> attacks only votes with known vote_id's will be accepted, and only for
> txid:vout's already in the blockchain, and a record of txouts for whom votes
> have already broadcast will be kept. (this record need not be authoritative as
> its purpose is only to prevent DoS attacks) Miners wishing to increase the
> blocksize can record these votes and include them in the blocks they mine as
> required. To reduce the cost of including votes in blocks 5% of every block
> should be assigned to voting only. (this can be implemented by a soft-fork)

> For any given block actual limit in effect is then the rolling median of the
> blocks in the last year. At the beginning of every year the value considered to
> be the status quo resets to the mean of the limit at the beginning and end of
> the interval.  (again, by "year" we really mean 52,560 blocks) The rolling
> median and periodic reset process ensures that the limit changes gradually and
> is not influenced by temporary events such as hacks to large exchanges or
> malicious wallet software.  The rolling median also ensures that for a miner
> the act of including a vote is never wasted due to the txout later being spent.

> Implementing the voting system can happen prior to an actual hard-fork allowing
> for an increase and can be an important part of determining if the hard-fork is
> required at all.

> Coercion and vote buying is of course possible in this system. A miner could
> say that they will only accept transactions accompanied by a vote for a given
> limit. However in a decentralized system completely preventing vote buying is
> of course impossble, and the design of Bitcoin itself has a fundemental
> assumption that a majority of miners will behave in a specific kind of "honest"
> way.

> A voting process ensures that any increase to the blocksize genuinely
> represents the desires of the Bitcoin community, and the process described
> above ensures that any changes happen at a rate that gives all participants
> time to react. The process also gives a mechanism for the community to vote to
> decrease the limit if it turns out that the new one was in fact too high. (note
> how the way the status quo is set ensures the default action is for the limit
> to gradually decrease even if everyone stops voting)

> As many of you know I have been quite vocal that the 1MB limit should stay. But
> I would be happy to support the outcome of a vote done properly, whatever that
> outcome may be.

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