From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from smtp1.linuxfoundation.org (smtp1.linux-foundation.org [172.17.192.35]) by mail.linuxfoundation.org (Postfix) with ESMTPS id 3C5BF68 for ; Tue, 4 Aug 2015 06:45:17 +0000 (UTC) X-Greylist: delayed 00:05:05 by SQLgrey-1.7.6 Received: from mout.gmx.net (mout.gmx.net [212.227.15.15]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id BDBB9E8 for ; Tue, 4 Aug 2015 06:45:15 +0000 (UTC) Received: from [192.168.1.85] ([84.97.181.71]) by mail.gmx.com (mrgmx003) with ESMTPSA (Nemesis) id 0MK0ur-1ZNsw50j1J-001Old; Tue, 04 Aug 2015 08:40:04 +0200 Content-Type: multipart/alternative; boundary="Apple-Mail=_9E306D4B-96CA-4CDF-92DE-3A900188C49D" Mime-Version: 1.0 (Mac OS X Mail 6.6 \(1510\)) From: Peter R In-Reply-To: Date: Mon, 3 Aug 2015 23:40:17 -0700 Message-Id: References: <1438640036.2828.0.camel@auspira.com> To: Bitcoin Dev X-Mailer: Apple Mail (2.1510) X-Provags-ID: V03:K0:JT0akueSR56Hye1wr8msSIZhx9fZxlLXZKKn279uZ6ofX1US8hf tVAHpCcBcgQ9J17H68XGPfV9NUyjaAnvTgMVUn+vJN3/p0ZbubwMFyydNiQGsPeK6sjnbu/ TuyPgXaQOEv3tHCObQFijr+iWMbJYZ1Btr13kJTozeO6tdJMpwAYdOpAg0yS8xZIEFIZLzt S5ltqZ9qssL9Nkau89aMw== X-UI-Out-Filterresults: notjunk:1;V01:K0:eRkACVOoW7w=:m2jgO4dQXGBsixXKZSBH75 rIuG2ziUmtdJLKG34trX1RaADpVIG+NYlYPQ+B1PNw/Pt+Ro6zp6qq6WWP7EKdjrM897omO2J ogqtr2wfR4tMci/YNjwU/cEwxJC1D/Bi+BQ34V1QP+TgqEIO+c9sK/hgTl/Az3jO+hg+i7h+g mOpmfsjq50KS30c+FsOB9LQaRcCrX6Dbm5l52W5dKzEsBlTMyMfmhCY2U9A4/9KqQx7ctt0O5 qK5bOwCYfy59+bczxSvRa99ixFMPM5WF7ZGDGrru9Rzx6kUhE1RXSbtAuirNFmt+TmNS3Bjr6 0KB9r2kYdSYAGmXP3SzVSqzs7Hm26x7dru+X5XOMMT3cqMMPg0v4tHAbhc9OepuEfBQ+eccmf WPZnzMQ6dLviCGGjn+AV2JtL0a5ACngclfUx3RpQtonAiv1OTC103eFYtz5C6Ynj/OSroJ+En bDMQ+G82ipoLvYmZeZ0/pjEzVJaRA5dAKB9pQ4/BDUYDbrFQQWOPWcE5ZcATv6cvqycxoU1Ma Ehvh9PfSKiFStEwgTVL8JArLKcdVL9aWJr3gG4Tv6Jsue3K4mS2nZJBovyVSGRnUSvXpJLWYt EKymNPd7OsByCsv/KSj1/vJMqasxpWPI28ISITaVCaeNyobycgLBIANeLL77f7ROwdk5DCh3w BdvneM4vTSm4R/RCBcacR8fYM4gepbov7ZJld+xJuF1JUqOOpHn4tVibvO/e6yVw8axQ= X-Spam-Status: No, score=-1.9 required=5.0 tests=BAYES_00,FREEMAIL_FROM, HTML_MESSAGE,RCVD_IN_DNSWL_NONE autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org Subject: [bitcoin-dev] "A Transaction Fee Market Exists Without a Block Size Limit"--new research paper suggests X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.12 Precedence: list List-Id: Bitcoin Development Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Tue, 04 Aug 2015 06:45:17 -0000 --Apple-Mail=_9E306D4B-96CA-4CDF-92DE-3A900188C49D Content-Transfer-Encoding: quoted-printable Content-Type: text/plain; charset=windows-1252 Dear Bitcoin-Dev Mailing list, I=92d like to share a research paper I=92ve recently completed titled =93A= Transaction Fee Market Exists Without a Block Size Limit.=94 In = addition to presenting some useful charts such as the cost to produce = large spam blocks, I think the paper convincingly demonstrates that, due = to the orphaning cost, a block size limit is not necessary to ensure a = functioning fee market. =20 The paper does not argue that a block size limit is unnecessary in = general, and in fact brings up questions related to mining cartels and = the size of the UTXO set. =20 It can be downloaded in PDF format here: https://dl.dropboxusercontent.com/u/43331625/feemarket.pdf Or viewed with a web-browser here: = https://www.scribd.com/doc/273443462/A-Transaction-Fee-Market-Exists-Witho= ut-a-Block-Size-Limit Abstract. This paper shows how a rational Bitcoin miner should select = transactions from his node=92s mempool, when creating a new block, in = order to maximize his profit in the absence of a block size limit. To = show this, the paper introduces the block space supply curve and the = mempool demand curve. The former describes the cost for a miner to = supply block space by accounting for orphaning risk. The latter = represents the fees offered by the transactions in mempool, and is = expressed versus the minimum block size required to claim a given = portion of the fees. The paper explains how the supply and demand = curves from classical economics are related to the derivatives of these = two curves, and proves that producing the quantity of block space = indicated by their intersection point maximizes the miner=92s profit. = The paper then shows that an unhealthy fee market=97where miners are = incentivized to produce arbitrarily large blocks=97cannot exist since it = requires communicating information at an arbitrarily fast rate. The = paper concludes by considering the conditions under which a rational = miner would produce big, small or empty blocks, and by estimating the = cost of a spam attack. =20 Best regards, Peter= --Apple-Mail=_9E306D4B-96CA-4CDF-92DE-3A900188C49D Content-Transfer-Encoding: quoted-printable Content-Type: text/html; charset=windows-1252
Dear Bitcoin-Dev Mailing = list,

I=92d like to share a research paper I=92ve= recently completed titled =93A Transaction Fee Market Exists Without a = Block Size Limit.=94  In addition to presenting some useful charts = such as the cost to produce large spam blocks, I think the paper = convincingly demonstrates that, due to the orphaning cost, a block size = limit is not necessary to ensure a functioning fee market. =  

The paper does not argue that a block = size limit is unnecessary in general, and in fact brings up questions = related to mining cartels and the size of the UTXO set. =   

It can be downloaded in PDF format = here:


Or viewed with a web-browser here:


Abstract.  This paper shows how a rational Bitcoin = miner should select transactions from his node=92s mempool, when = creating a new block, in order to maximize his profit in the absence of = a block size limit. To show this, the paper introduces the block space = supply curve and the mempool demand curve.  The former describes = the cost for a miner to supply block space by accounting for orphaning = risk.  The latter represents the fees offered by the transactions = in mempool, and is expressed versus the minimum block size required to = claim a given portion of the fees.  The paper explains how the = supply and demand curves from classical economics are related to the = derivatives of these two curves, and proves that producing the quantity = of block space indicated by their intersection point maximizes the = miner=92s profit.  The paper then shows that an unhealthy fee = market=97where miners are incentivized to produce arbitrarily large = blocks=97cannot exist since it requires communicating information at an = arbitrarily fast rate.  The paper concludes by considering the = conditions under which a rational miner would produce big, small or = empty blocks, and by estimating the cost of a spam attack. =  

Best = regards,
Peter
= --Apple-Mail=_9E306D4B-96CA-4CDF-92DE-3A900188C49D--