Re: [Bitcoin-development] replace-by-fee v0.10.0rc4

[Alex Mizrahi <alex.mizrahi@gmail.com>]

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> Miners are *not* incentivised to earn the most money in the next block
> possible. They are incentivised to maximise their return on investment.
>

This would be right if you assume that all Bitcoin miners act as a single
entity. In that case it is true that that entity's goal is to maximize
overall ROI.

But each miner makes decisions on his own. Are you familiar with a concept
of Nash equilibrium, prisoner's dilemma, etc?

The fact that nobody is using this kind of a behavior right now doesn't
mean that we can rely on it.

For example, Peercoin was horribly broken in 6 months after its release
(e.g. people reported that they are able to generate 50 consecutive blocks
simply by bringing a cold wallet online) and yet nobody bothered to exploit
it, and it managed to acquire non-negligible "market cap".

So we have an empiric evidence that proof-of-stake miners are motivated to
keep network secure. So, maybe, we should switch to proof-of-stake, if it
was demonstrated that it is secure?

There are good reasons to not switch to proof-of-stake. Particularly, the
kind which is used in Peercoin is not game-theoretically sound. So even if
it works right now, it can fail in a big way once attackers will really get
around to it. An attack requires significant knowledge, effort and,
possibly, capital, so it might be only feasible on a certain scale.

So, well, anyway, suppose Peter Todd is the only person interested in
maintaining replace-by-fee patches right now, and you can talk him into
abandoning them.
OK, perhaps zero-confirmation payments will be de-facto secure for a couple
of years. And thus a lot of merchants will rely on zero-confirmation
payments protected by nothing but a belief in honest miners, as it is damn
convenient.

But, let's say, 5 years from now, some faction of miners who own
soon-to-be-obsolete equipment will decide to boost their profits with a
replace-by-fee pool and a corresponding wallet. They can market it as "1 of
10 hamburgers are free" if they have 10% of the total hashpower.

So would you take a responsibility for pushing the approach which isn't
game-theoretically sound?

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