From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from smtp2.osuosl.org (smtp2.osuosl.org [140.211.166.133]) by lists.linuxfoundation.org (Postfix) with ESMTP id 1D2E3C002D for ; Mon, 11 Jul 2022 18:13:06 +0000 (UTC) Received: from localhost (localhost [127.0.0.1]) by smtp2.osuosl.org (Postfix) with ESMTP id E75CB40517 for ; Mon, 11 Jul 2022 18:13:05 +0000 (UTC) DKIM-Filter: OpenDKIM Filter v2.11.0 smtp2.osuosl.org E75CB40517 Authentication-Results: smtp2.osuosl.org; dkim=pass (2048-bit key) header.d=chia.net header.i=@chia.net header.a=rsa-sha256 header.s=google header.b=S5PYp30Y X-Virus-Scanned: amavisd-new at osuosl.org X-Spam-Flag: NO X-Spam-Score: 0.601 X-Spam-Level: X-Spam-Status: No, score=0.601 tagged_above=-999 required=5 tests=[BAYES_50=0.8, DKIM_SIGNED=0.1, DKIM_VALID=-0.1, DKIM_VALID_AU=-0.1, DKIM_VALID_EF=-0.1, HTML_MESSAGE=0.001, RCVD_IN_DNSWL_NONE=-0.0001, SPF_HELO_NONE=0.001, SPF_PASS=-0.001] autolearn=ham autolearn_force=no Received: from smtp2.osuosl.org ([127.0.0.1]) by localhost (smtp2.osuosl.org [127.0.0.1]) (amavisd-new, port 10024) with ESMTP id 6CjSjM51anyZ for ; Mon, 11 Jul 2022 18:13:04 +0000 (UTC) X-Greylist: whitelisted by SQLgrey-1.8.0 DKIM-Filter: OpenDKIM Filter v2.11.0 smtp2.osuosl.org BFB8F4019B Received: from mail-yw1-x112e.google.com (mail-yw1-x112e.google.com [IPv6:2607:f8b0:4864:20::112e]) by smtp2.osuosl.org (Postfix) with ESMTPS id BFB8F4019B for ; Mon, 11 Jul 2022 18:13:04 +0000 (UTC) Received: by mail-yw1-x112e.google.com with SMTP id 00721157ae682-31cf1adbf92so57762737b3.4 for ; Mon, 11 Jul 2022 11:13:04 -0700 (PDT) DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=chia.net; s=google; h=mime-version:from:date:message-id:subject:to; bh=Rt8AEn0KyMdWd7IYxsbpZMgansLgxC7TSlzpKqFIvpg=; b=S5PYp30YtIuIwH/jHcdzQ2BWQm6m2tZnRWWuuIw5bVJT3MfJv7ZVwghCWUClcwHiPo jgWdo7xFimuWBRFA4HmSbQIi9Yka3Qoii5MlvRE391ReF2GJaYoH3I5GsfGsQT4me9yN gD2tOsrLqnaUSo2rOEpQx1bf9r3NAgpJsKlxW4Rcw/QrGSgnzctT1qoZfmv5/yqSnAL+ Mi+kzzDz3bfR9zPjOgiFr1JtGgE/XHOkZa370pNb0Myq8yVZ+vLTD+T7j7c9ph0riIce 4dgy0473gjaQBhydR9EAocCLOyojG5ncsjYZpF7Oayk1RaF0F6WZdFYco0GMMiZV9BO1 j7lg== X-Google-DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=1e100.net; s=20210112; h=x-gm-message-state:mime-version:from:date:message-id:subject:to; bh=Rt8AEn0KyMdWd7IYxsbpZMgansLgxC7TSlzpKqFIvpg=; b=aPs1r7a0Pbnl8LSpLWgmEo63WmChF0jMXwYfYwKM8UkY9yoiKTqbwe9t8Quax0FJ/k vnRFytfQNSt0bdGJonJISW/TeaMr4ZWwGiQT4nQCmU1RStKmo2iWg9+GBycvXIqJeVya Y/g/AXUxHs1bEg3lmUDaCUdEtZ1lYyFJscZJsNFVc/hAjzvRDvNF4PAWnxQTfE570e3y pWfRfYUWj4aVpz0QAnPF9GDE7KI6604sxR79xZpaFej/0ze296X87EzJp5Z4aoAxwyGg M+VYnuNOWGNoFgE0UJNqz/YiCpjqQrEcpEgTdKBgqLHJnybWwHtauRaXArkSnAM9fMHW IU2w== X-Gm-Message-State: AJIora83n3Wn2AQBjx2glx/6oKvBPGH04kwf3m6rLSQrTC5Pd9siC2aI IiKI8m+963qETVPenulYjeR5yAt+2etsGQRDmWqR18nW0QQ= X-Google-Smtp-Source: AGRyM1sc76/14wVWge+3h2DxbGQxZHZ6v8MWTGwozrA6Cg8pVcmLvTDFfK6Ryosj3iH0fRPoEChcp7J2HZA3Yp7JMOQ= X-Received: by 2002:a81:83c1:0:b0:31c:782f:7a42 with SMTP id t184-20020a8183c1000000b0031c782f7a42mr20742354ywf.399.1657563183391; Mon, 11 Jul 2022 11:13:03 -0700 (PDT) MIME-Version: 1.0 From: Bram Cohen Date: Mon, 11 Jul 2022 11:12:52 -0700 Message-ID: To: Bitcoin Protocol Discussion Content-Type: multipart/alternative; boundary="000000000000bd3d3a05e38b80ef" X-Mailman-Approved-At: Mon, 11 Jul 2022 18:19:35 +0000 Subject: [bitcoin-dev] Security problems with relying on transaction fees for security X-BeenThere: bitcoin-dev@lists.linuxfoundation.org X-Mailman-Version: 2.1.15 Precedence: list List-Id: Bitcoin Protocol Discussion List-Unsubscribe: , List-Archive: List-Post: List-Help: List-Subscribe: , X-List-Received-Date: Mon, 11 Jul 2022 18:13:06 -0000 --000000000000bd3d3a05e38b80ef Content-Type: text/plain; charset="UTF-8" If transaction fees came in at an even rate over time all at the exact same level then they work fine for security, acting similarly to fixed block rewards. Unfortunately that isn't how it works in the real world. There's a very well established day/night cycle with fees going to zero overnight and even longer gaps on weekends and holidays. If in the future Bitcoin is entirely dependent on fees for security (scheduled very strongly) and this pattern keeps up (overwhelmingly likely) then this is going to become a serious problem. What's likely to happen is that at first there will simply be no or very few blocks mined overnight. There are likely to be some, as miners at first turn off their mining rigs completely overnight then adopt the more sophisticated strategy of waiting until there are enough fees in the mempool to warrant attempting to make a block and only then doing it. Unfortunately the gaming doesn't end there. Eventually the miners with lower costs of operation will figure out that they can collectively reorg the last hour (or some time period) of the day overnight and this will be profitable. That's likely to cause the miners with more expensive operations to stop attempting mining the last hour of the day preemptively. What happens after that I'm not sure. There are a small enough number of miners with a quirky enough distribution of costs of operation and profitability that the dynamic is heavily dependent on those specifics, but the beginnings of a slippery slope to a mining cabal which reorgs everyone else out of existence and eventually 51% attacks the whole thing have begun. It even gets worse than that because once there's a cabal aggressively reorging anyone else out when they make a block other miners will shut down and rapidly lose the ability to quickly spin up again, so the threshold needed for that 51% attack will keep going down. In short, relying completely on transaction fees for security is likely to be a disaster. What we can say from existing experience is that having transaction fees be about 10% of rewards on average works well. It's enough to incentivize collecting fees but not so much that it makes incentives get all weird. 90% transaction fees is probably very bad. 50% works but runs the risk of spikes getting too high. There are a few possible approaches to fixes. One would be to drag most of east asia eastward to a later time zone thus smoothing out the day/night cycle but that's probably unrealistic. Another would be to hard fork in fixed rewards in perpetuity, which is slightly less unrealistic but still extremely problematic. Much more actionable are measures which smooth out fees over time. Having wallets opportunistically collect their dust during times of low transaction fees would help and would save users on fees. Also making UX which clarifies when things are likely to take a day or week but that it's reliable would be a reasonable thing to do, but users unfortunately are very averse to transactions taking a while. --000000000000bd3d3a05e38b80ef Content-Type: text/html; charset="UTF-8" Content-Transfer-Encoding: quoted-printable
If transaction fees came in at an even rate over time all = at the exact same level then they work fine for security, acting similarly = to fixed block rewards. Unfortunately that isn't how it works in the re= al world. There's a very well established day/night cycle with fees goi= ng to zero overnight and even longer gaps on weekends and holidays. If in t= he future Bitcoin is entirely dependent on fees for security (scheduled ver= y strongly) and this pattern keeps up (overwhelmingly likely) then this is = going to become a serious problem.

What's likely to = happen is that at first there will simply be no or very few blocks mined ov= ernight. There are likely to be some, as miners at first turn off their min= ing rigs completely overnight then adopt the more sophisticated strategy of= waiting until there are enough fees in the mempool to warrant attempting t= o make a block and only then doing it. Unfortunately the gaming doesn't= end there. Eventually the miners with lower costs of operation will figure= out that they can collectively reorg the last hour (or some time period) o= f the day overnight and this will be profitable. That's likely to cause= the miners with more expensive operations to stop attempting mining the la= st hour of the day preemptively.=C2=A0

What happen= s after that I'm not sure. There are a small enough number of miners wi= th a quirky enough distribution of costs of operation and profitability tha= t the dynamic is heavily dependent on those specifics, but the beginnings o= f a slippery slope to a mining cabal which reorgs everyone else out of exis= tence and eventually 51% attacks the whole thing have begun. It even gets w= orse than that because once there's a cabal aggressively reorging anyon= e else out when they make a block other miners will shut down and rapidly l= ose the ability to quickly spin up again, so the threshold needed for that = 51% attack will keep going down.

In short, relying= completely on transaction fees for security is likely to be a disaster. Wh= at we can say from existing experience is that having transaction fees be a= bout 10% of rewards on average works well. It's enough to incentivize c= ollecting fees but not so much that it makes incentives get all weird. 90% = transaction fees is probably very bad. 50% works but runs the risk of spike= s getting too high.

There are a few possible appro= aches to fixes. One would be to drag most of east asia eastward to a later = time zone thus smoothing out the day/night cycle but that's probably un= realistic. Another would be to hard fork in fixed rewards in perpetuity, wh= ich is slightly less unrealistic but still extremely problematic.=C2=A0

Much more actionable are measures which smooth out fe= es over time. Having wallets opportunistically collect their dust during ti= mes of low transaction fees would help and would save users on fees. Also m= aking UX which clarifies when things are likely to take a day or week but t= hat it's reliable would be a reasonable thing to do, but users unfortun= ately are very averse to transactions taking a while.
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