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 1A3FB83D for ; Wed, 5 Aug 2015 09:18:51 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.7.6 Received: from mail-la0-f49.google.com (mail-la0-f49.google.com [209.85.215.49]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 3B6867C for ; Wed, 5 Aug 2015 09:18:50 +0000 (UTC) Received: by labkb6 with SMTP id kb6so2721350lab.2 for ; Wed, 05 Aug 2015 02:18:48 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail.com; s=20120113; h=mime-version:in-reply-to:references:from:date:message-id:subject:to :cc:content-type; bh=puSb88IkRW1c0oin29UY5AxKaTbPaARdSN6LdgKzh7s=; b=WGsCcpFZYNoj9fmjPqZQgYG1pxQ/Nw94IZfYT3+6MkG2CvbmaYBOXXceJiHhvnNUJn zvXdWZwDs+HWK5mYGeJGkyidV75dJwfq0CjS6DU6aaNYavCdiVegtq1V8Vcw2XKaPxW0 7M/waT+GpMxVqTsL+AahFHTJ5gsrJSSKIY+ZmaQMKz8zKevxAY6xx4qoeFhY8KzUFunh u8JHrG3K5+r1woOhR/3W+1eP6UDmVu1jaB0agbbOZ8BdkFhPJgOTvZ0c5N2odWGIn1Bx ZTNbsI9cGEaXdIgv/oBbefQpV4lAfYC/OAbWrH5OuVyR900dv0zvk9F0pxc90j16C7UB 3pCg== X-Received: by 10.112.77.103 with SMTP id r7mr8272861lbw.63.1438766328324; Wed, 05 Aug 2015 02:18:48 -0700 (PDT) MIME-Version: 1.0 Received: by 10.25.22.25 with HTTP; Wed, 5 Aug 2015 02:18:28 -0700 (PDT) In-Reply-To: References: <1438640036.2828.0.camel@auspira.com> From: Hector Chu Date: Wed, 5 Aug 2015 10:18:28 +0100 Message-ID: To: Benjamin Content-Type: multipart/alternative; boundary=001a11c3f026ea28f5051c8ce313 X-Spam-Status: No, score=-2.7 required=5.0 tests=BAYES_00,DKIM_SIGNED, DKIM_VALID,DKIM_VALID_AU,FREEMAIL_FROM,HTML_MESSAGE,RCVD_IN_DNSWL_LOW autolearn=ham version=3.3.1 X-Spam-Checker-Version: SpamAssassin 3.3.1 (2010-03-16) on smtp1.linux-foundation.org Cc: Bitcoin Dev Subject: Re: [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: Wed, 05 Aug 2015 09:18:51 -0000 --001a11c3f026ea28f5051c8ce313 Content-Type: text/plain; charset=UTF-8 On 5 August 2015 at 09:33, Benjamin via bitcoin-dev < bitcoin-dev@lists.linuxfoundation.org> wrote: > A market means that demand and supply are matched continuously, and > Bitcoin has no such mechanism. > Not all markets need to have highly liquid trading outlets in order to be thought of as such. Inefficient markets are where there is an imperfect matching mechanism. I don't think a fee market exists and that demand or supply are not easily > definable. > Demand and supply are reflected in the market in the following two prices: - BTC/USD - Average transaction fee levels * Average transaction volume rate. In other words, this is the block-by-block, remainder of the block reward after subtracting the subsidy and priced in BTC. Actually the first one is the only proxy reflecting the current and future promise of Bitcoin, while the second only reflects the present. Miners would be uniquely placed to know how best to vary the block size to maximize their profit resulting from these two prices. The fact that they are unable to is limiting their collective profits, reducing competition between miners and increasing the average tx fee for users. In that respect a dynamic block size voted on by miners periodically would go some way to rectify this inefficiency. This needn't have to happen on the block chain itself; we could have a continuous prediction market for the block size, and the informed participants (miners) would stand to profit from the uninformed from trading in such a market. How to get the block chain to use the block size thus determined is another technical matter. --001a11c3f026ea28f5051c8ce313 Content-Type: text/html; charset=UTF-8 Content-Transfer-Encoding: quoted-printable
On 5= August 2015 at 09:33, Benjamin via bitcoin-dev <bitco= in-dev@lists.linuxfoundation.org> wrote:
A market means that demand and supply are ma= tched continuously, and Bitcoin has no such mechanism.

Not all markets need to have highly liquid trading outlet= s in order to be thought of as such. Inefficient markets are where there is= an imperfect matching mechanism.

I don't think a fee market exists and that d= emand or supply are not easily definable.

=
Demand and supply are reflected in the market in the following two pri= ces:
- BTC/USD
- Average transaction fee levels * Avera= ge transaction volume rate. In other words, this is the block-by-block, rem= ainder of the block reward after subtracting the subsidy and priced in BTC.=

Actually the first one is the only proxy reflecti= ng the current and future promise of Bitcoin, while the second only reflect= s the present. Miners would be uniquely placed to know how best to vary the= block size to maximize their profit resulting from these two prices. The f= act that they are unable to is limiting their collective profits, reducing = competition between miners and increasing the average tx fee for users.

In that respect a dynamic block size voted on by mine= rs periodically would go some way to rectify this inefficiency. This needn&= #39;t have to happen on the block chain itself; we could have a continuous = prediction market for the block size, and the informed participants (miners= ) would stand to profit from the uninformed from trading in such a market. = How to get the block chain to use the block size thus determined is another= technical matter.
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