From mboxrd@z Thu Jan 1 00:00:00 1970 Received: from sog-mx-4.v43.ch3.sourceforge.com ([172.29.43.194] helo=mx.sourceforge.net) by sfs-ml-4.v29.ch3.sourceforge.com with esmtp (Exim 4.76) (envelope-from ) id 1YrYqg-00066G-1t for bitcoin-development@lists.sourceforge.net; Sun, 10 May 2015 21:33:22 +0000 Received-SPF: pass (sog-mx-4.v43.ch3.sourceforge.com: domain of gmail.com designates 209.85.223.176 as permitted sender) client-ip=209.85.223.176; envelope-from=gmaxwell@gmail.com; helo=mail-ie0-f176.google.com; Received: from mail-ie0-f176.google.com ([209.85.223.176]) by sog-mx-4.v43.ch3.sourceforge.com with esmtps (TLSv1:RC4-SHA:128) (Exim 4.76) id 1YrYqf-0005WT-CE for bitcoin-development@lists.sourceforge.net; Sun, 10 May 2015 21:33:22 +0000 Received: by iedfl3 with SMTP id fl3so107648006ied.1 for ; Sun, 10 May 2015 14:33:16 -0700 (PDT) MIME-Version: 1.0 X-Received: by 10.107.7.87 with SMTP id 84mr9430743ioh.76.1431293596108; Sun, 10 May 2015 14:33:16 -0700 (PDT) Received: by 10.107.15.82 with HTTP; Sun, 10 May 2015 14:33:15 -0700 (PDT) In-Reply-To: References: <16096345.A1MpJQQkRW@crushinator> Date: Sun, 10 May 2015 21:33:15 +0000 Message-ID: From: Gregory Maxwell To: Gavin Andresen Content-Type: text/plain; charset=UTF-8 X-Spam-Score: -1.6 (-) X-Spam-Report: Spam Filtering performed by mx.sourceforge.net. See http://spamassassin.org/tag/ for more details. -1.5 SPF_CHECK_PASS SPF reports sender host as permitted sender for sender-domain 0.0 FREEMAIL_FROM Sender email is commonly abused enduser mail provider (gmaxwell[at]gmail.com) -0.0 SPF_PASS SPF: sender matches SPF record -0.1 DKIM_VALID_AU Message has a valid DKIM or DK signature from author's domain 0.1 DKIM_SIGNED Message has a DKIM or DK signature, not necessarily valid -0.1 DKIM_VALID Message has at least one valid DKIM or DK signature 0.0 AWL AWL: Adjusted score from AWL reputation of From: address X-Headers-End: 1YrYqf-0005WT-CE Cc: Bitcoin Development Subject: Re: [Bitcoin-development] Proposed alternatives to the 20MB step function 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: Sun, 10 May 2015 21:33:22 -0000 On Sun, May 10, 2015 at 9:21 PM, Gavin Andresen wrote: > a while I think any algorithm that ties difficulty to block size is just a > complicated way of dictating minimum fees. Thats not the long term effect or the motivation-- what you're seeing is that the subsidy gets in the way here. Consider how the procedure behaves with subsidy being negligible compared to fees. What it accomplishes in that case is that it incentivizes increasing the size until the marginal "value" to miners of the transaction-data being left out is not enormously smaller than the "value" of the data in the block on average. Value in quotes because it's blind to the "fees" the transaction claims. With a large subsidy, the marginal value of the first byte in the block is HUGE; and so that pushes up the average-- and creates the "base fee effect" that you're looking at. It's not that anyone is picking a fee there, it's that someone picked the subsidy there. :) As the subsidy goes down the only thing fees are relative to is fees. An earlier version of the proposal took subsidy out of the picture completely by increasing it linearly with the increased difficulty; but that creates additional complexity both to implement and to explain to people (e.g. that the setup doesn't change the supply of coins); ... I suppose without it that starting disadvantage parameter (the offset that reduces the size if you're indifferent) needs to be much smaller, unfortunately.