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 D1407FA4 for ; Thu, 3 Sep 2015 17:57:49 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.7.6 Received: from mail-ig0-f175.google.com (mail-ig0-f175.google.com [209.85.213.175]) by smtp1.linuxfoundation.org (Postfix) with ESMTPS id 75960134 for ; Thu, 3 Sep 2015 17:57:49 +0000 (UTC) Received: by igbut12 with SMTP id ut12so46460449igb.1 for ; Thu, 03 Sep 2015 10:57:49 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=gmail.com; s=20120113; h=mime-version:in-reply-to:references:date:message-id:subject:from:to :cc:content-type:content-transfer-encoding; bh=mpMhqozwkeEVI7UE5u4IBEMtKyjmFfa6mAbQr9N2pzU=; b=eEjlzCtcj9lc8RBcr9ngGLw5HgmeAEMpAO2WD+K1Z/v541JiDiXRMc9aWRJtWB/OEl 4oJQ9koRE75YnyXxyZtPZItt8+zkG31cSaRTfus/mnKoHucP41e9cBkEES3y75p7xcaV RNdUFCv6Ap8X0DTgz5jhsIgdWbpEJ1rg3Y+MSR9s3Kruy82rkMmCY43fn9LV2LGXBQ2Q xV0XikBgf87xi/zRII+/LNWga2sMTcOcfvfDh3He5wwIlXK/SaKcq/7XgbibyZzA5bD0 q1F8ajbxCDG6D2MDY1wvTeDLbym9MjIunnpkxr2LxpBGe57TwxH/6frJPNiIL5KkeZ4W v6Hw== MIME-Version: 1.0 X-Received: by 10.50.13.100 with SMTP id g4mr675426igc.62.1441303068973; Thu, 03 Sep 2015 10:57:48 -0700 (PDT) Received: by 10.107.19.30 with HTTP; Thu, 3 Sep 2015 10:57:48 -0700 (PDT) In-Reply-To: References: Date: Thu, 3 Sep 2015 17:57:48 +0000 Message-ID: From: Gregory Maxwell To: Jeff Garzik Content-Type: text/plain; charset=UTF-8 Content-Transfer-Encoding: quoted-printable X-Spam-Status: No, score=-2.7 required=5.0 tests=BAYES_00,DKIM_SIGNED, DKIM_VALID, DKIM_VALID_AU, FREEMAIL_FROM, 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 development mailing list Subject: Re: [bitcoin-dev] block size - pay with difficulty 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: Thu, 03 Sep 2015 17:57:50 -0000 On Thu, Sep 3, 2015 at 2:40 PM, Jeff Garzik wrote: > Expanding on pay-with-diff and volatility (closing comment), > > Users and miners will have significant difficulty creating and/or predict= ing > a stable block size (and fee environment) with pay-with-diff across the > months. The ability of businesses to plan is low. Chaos and > unpredictability are bad in general for markets and systems. Thus the > binary conclusion of "not get used" or "volatility" Sorry, I'm still not following. I agree that predictability is important. I don't follow where unpredictability is coming from here. Most (all?) of the difficulty based adjustments had small limits on the difficulty change that wouldn't have substantially changed the interblock times relative to orphaning. > It's written as 'a' and/or 'b'. If you don't have idle hashpower, then p= aying with difficulty requires some amount of collusion ('a') > Any miner paying with a higher difficulty either needs idle hashpower, or= self-increase their own difficulty at the possible opportunity cost of los= ing an entire block's income to another miner who doesn't care about changi= ng the block size. The potential loss does not economically compensate for= size increase gains in most cases, when you consider the variability of bl= ocks (they come in bursts and pauses) and the fee income that would be asso= ciated What the schemes propose is blocksize that increases fast with difficulty over a narrow window. The result is that your odds of producing a block are slightly reduced but the block you produce if you do is more profitable: but only if there is a good supply of transactions which pay real fees compariable to the ones you're already taking. The same trade-off exists at the moment with respect to orphaning risk and miners still produce large blocks, producing a larger block means a greater chance you're not successful (due to orphaning) but you have a greater utility. The orphing mediated risk is fragile and can be traded off for centeralization advantage or by miners bypassing validation, issues which at least so far we have no reason to believe exist for size mediated schemes. As you know, mining is not a race (ignoring edge effects with orphaning/propagation time). Increasing difficulty does not put you at an expected return disavantage compared to other miners so long as the income increases at least proportionally (otherwise pooling with low diff shares would be an astronomically losing proposition :)!). Pay-for-size schemes have been successfully used in some altcoins without the effects you're suggesting.