From mboxrd@z Thu Jan 1 00:00:00 1970 Received: from sog-mx-1.v43.ch3.sourceforge.com ([172.29.43.191] helo=mx.sourceforge.net) by sfs-ml-3.v29.ch3.sourceforge.com with esmtp (Exim 4.76) (envelope-from ) id 1VgZeC-0002Kd-Cl for bitcoin-development@lists.sourceforge.net; Wed, 13 Nov 2013 12:34:16 +0000 X-ACL-Warn: Received: from 2508ds5-oebr.1.fullrate.dk ([90.184.5.129] helo=mail.ceptacle.com) by sog-mx-1.v43.ch3.sourceforge.com with esmtp (Exim 4.76) id 1VgZeA-0005Ug-Eu for bitcoin-development@lists.sourceforge.net; Wed, 13 Nov 2013 12:34:16 +0000 Received: from localhost (localhost [127.0.0.1]) by mail.ceptacle.com (Postfix) with ESMTP id 2B1AA36E4F77 for ; Wed, 13 Nov 2013 13:34:09 +0100 (CET) X-Virus-Scanned: amavisd-new at ceptacle.com Received: from mail.ceptacle.com ([127.0.0.1]) by localhost (server.ceptacle.private [127.0.0.1]) (amavisd-new, port 10024) with ESMTP id hxRSXph-vnpU for ; Wed, 13 Nov 2013 13:34:08 +0100 (CET) Received: from MacGronager.local (cpe.xe-3-1-0-415.bynqe10.dk.customer.tdc.net [188.180.67.254]) by mail.ceptacle.com (Postfix) with ESMTPSA id 31B5536E4F64 for ; Wed, 13 Nov 2013 13:34:08 +0100 (CET) Message-ID: <528371BF.9030100@ceptacle.com> Date: Wed, 13 Nov 2013 13:34:07 +0100 From: Michael Gronager User-Agent: Mozilla/5.0 (Macintosh; Intel Mac OS X 10.9; rv:17.0) Gecko/20130801 Thunderbird/17.0.8 MIME-Version: 1.0 To: Bitcoin Dev References: <528367F5.9080303@ceptacle.com> In-Reply-To: <528367F5.9080303@ceptacle.com> X-Enigmail-Version: 1.6 Content-Type: text/plain; charset=ISO-8859-1 Content-Transfer-Encoding: 7bit X-Spam-Score: 0.0 (/) X-Spam-Report: Spam Filtering performed by mx.sourceforge.net. See http://spamassassin.org/tag/ for more details. 0.0 URIBL_BLOCKED ADMINISTRATOR NOTICE: The query to URIBL was blocked. See http://wiki.apache.org/spamassassin/DnsBlocklists#dnsbl-block for more information. [URIs: doubleclick.net] X-Headers-End: 1VgZeA-0005Ug-Eu Subject: Re: [Bitcoin-development] Even simpler minimum fee calculation formula: f > bounty*fork_rate/average_blocksize 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: Wed, 13 Nov 2013 12:34:16 -0000 Just a quick comment on the actual fees (checked at blockchain.info) the average fee over the last 90 days is actually ~0.0003BTC/txn - so not too far behind the theoretical minimum of 0.00037BTC/txn. I suppose, though, that it has more to do with old clients and fee settings (0.0005) than network wisdom ;) On 13/11/13, 12:52 , Michael Gronager wrote: > Last week I posted a writeup: "On the optimal block size and why > transaction fees are 8 times too low (or transactions 8 times too big)". > > Peter Todd made some nice additions to it including different pool sizes > into the numbers. > > However, it occurred to me that things can in fact be calculated even > simpler: The measured fork rate will mean out all the different pool > sizes and network latencies and will as such provide a simple number we > can use to estimate the minimum fee. Key assumption is that the latency > will depend on block size (# txns) and the fork rate will depend on latency. > > Using the formulas from last week: > > P_fork = t_propagate/t_blocks > > and: > > t_propagate = t_0 + alpha*S ~= alpha*S > > We get a measure for alpha as a function of the average fork rate and > average block size: > > alpha = P_fork*t_block/S > > Further, take the formula for the minimum fee: > > f > alpha*E_bounty/t_block > > And insert the formula for alpha: > > f > P_fork*E_bounty/S_average > > Luckily the fork frequency and the average block size are easily > measurable. blockchain.info keeps historical graphs of number of > orphaned blocks pr day - average over the last year is 1.5. Average > number of blocks per day over the last year is 169, which yields a > P_fork of ~1/113. Average block size in the same time is 134kBytes, > which yields a minimum fee: > > f > 0.00165XBT/kb or 0.00037XBT/txn > > So the 0.0001 is only 4 times too small. Further, let us look at the > trend over the last 12 months. Pieter Wuille claimed that there has been > several improvements over the last half year that would bring down the > latency, there has also been speculations regarding direct connections > between the major pools etc - lets see if this is indeed true. > > If you look instead of 360 days, only at the last 90 days the average > block size has been 131kBytes, and the fork rate has been ~1/118, which > results in a minimum fee of: > > f > 0.00162XBT/kb or 0.00037XBT/txn > > So a small improvement but not statistically important... > > Last question, recalling that optimal revenue block size is a function > of the txn-fee (from the last writeup) - lets see what fee it takes to > support a block size of 131kBytes: > > S = 1/2 * (t_block/alpha - E_bounty/f) > > S = 1/2 * (S/P_fork - E_bounty/f) > > f = E_bounty/[(1/P_fork-2)*S] = 0.00165XBT/kB > > So a 4 times increase is still sufficient for the current load. > > Anyway - the all important number is alpha, the network latency which we > expect to be dependent of various things such as interconnectivity, > bandwidths, software quality etc, where mainly the latter is within our > hands to bring down the fee. And you can actually setup the standard > client to choose a better fee, as all the parameters in the formula are > easily measured! > > ------------------------------------------------------------------------------ > DreamFactory - Open Source REST & JSON Services for HTML5 & Native Apps > OAuth, Users, Roles, SQL, NoSQL, BLOB Storage and External API Access > Free app hosting. Or install the open source package on any LAMP server. > Sign up and see examples for AngularJS, jQuery, Sencha Touch and Native! > http://pubads.g.doubleclick.net/gampad/clk?id=63469471&iu=/4140/ostg.clktrk > _______________________________________________ > Bitcoin-development mailing list > Bitcoin-development@lists.sourceforge.net > https://lists.sourceforge.net/lists/listinfo/bitcoin-development >