[bitcoin-dev] Exploring alternative activation mechanisms: decreasing threshold

[Gregorio Guidi <greg_g@posteo.net>]

Hello,

I followed the debate on LOT=false / LOT=true trying to get a grasp of 
the balance of risks and advantages. The summary by Aaron van Wirdum [1] 
explains well the difficulties to find a good equilibrium... it 
concludes that "perhaps, a new possibility will present itself".

Thinking about such a "new possibility" that overcomes the 
LOT=true/false dichotomy, I would like to offer the following proposal. 
It could be called "decreasing threshold activation".

Decreasing threshold activation works similarly to BIP8, with the 
difference that the threshold that triggers the STARTED -> LOCKED_IN 
transition starts at 100% for the first retargeting period, and then is 
gradually reduced on each period in steps of 24 blocks (~1,2%). More 
precisely:

On the 1st period (starting on start_height): if 2016 out of 2016 blocks 
signal, the state is changed to LOCKED_IN on the next period (otherwise 
stays STARTED)
On the 2nd period: if 1992 out of 2016 blocks signal (~98.8%), the state 
transitions to LOCKED_IN on the next period
On the 3rd period: if 1968 out of 2016 blocks signal (~97.6%), the state 
transitions to LOCKED_IN on the next period
...
On the 14th period (~6 months): if 1704 out of 2016 blocks signal 
(~84.5%), the state transitions to LOCKED_IN on the next period
...
On the 27th period (~12 months): if 1392 out of 2016 blocks signal 
(~69.0%), the state transitions to LOCKED_IN on the next period
...
On the 40th period (~18 months): if 1080 out of 2016 blocks signal 
(~53.6%), the state transitions to LOCKED_IN on the next period
...
On the 53th period (~24 months): if 768 out of 2016 blocks signal 
(~38.1%), the state transitions to LOCKED_IN on the next period
...
On the 66th period (~30 months): if 456 out of 2016 blocks signal 
(~22.6%), the state transitions to LOCKED_IN on the next period
...
On the 79th period (~36 months): if 144 out of 2016 blocks signal 
(~7.1%), the state transitions to LOCKED_IN on the next period
...
On the 84th and final period (~39 months): if 24 out of 2016 blocks 
signal (~1.2%), the state transitions to LOCKED_IN on the next period, 
otherwise goes to FAILED

(For reference, I include below a snippet of pseudocode for the 
decreasing thresholds in the style of BIP8 and BIP9.)

Here are the main features and advantages of this approach:

1. It is relatively conservative at the beginning: for activation to 
happen in the first year, it requires a clear majority of signaling 
hashrate, indicating that the activation is relatively safe. Only later 
the threshold starts to move towards "unsafe" territory, accepting the 
tradeoff of less support from existing hashrate in exchange for ensuring 
that the activation eventually happens.

2. Like LOT=true, the activation will always occur in the end (except in 
the negligible case where less than 1.2% of hashrate supports it).

3. This approach is quite easy to implement, in particular it avoids the 
extra code to deal with the MUST_SIGNAL period.

4. There are no parameters to set (except startheight). I am a KISS fan, 
so this is a plus for me, making the activation mechanism robust and 
predictable with less chance for users to shoot themselves in the foot. 
It is also a plus for me that - if adopted as the default mechanism - it 
would require very little discussion on how to activate future 
soft-forks. In fact I think it would be a winning move for Core to 
commit to such a scheme, to avoid getting lost in game-theoretic rabbit 
holes.

5. Since there is no MUST_SIGNAL period, no automatic chain split occurs 
around activation when not all miners have upgraded (so activation is 
generally as benign as a MASF). A chain split will occur only when/if an 
invalid block is created (and this requires dedicated effort! it can 
only happen by circumventing the normal policy rules [2]). This 
mitigates the risk of reorgs and involuntary forks around activation, 
even with low miner signaling.

6. It removes motivation to create UASF clients that force activation. 
While individual nodes could still try to force a quicker activation, 
the motivation to do so is reduced since the same result is obtained 
just by waiting a little more.

7. Compared to LOT=true, activation is cleaner and quicker when it is 
relatively safe to do so (when the signaling hashrate is - let's say - 
in the 70%-80% range). On the other hand, activation is pushed further 
and further in time when it is less safe (when signaling hashrate is 
<50%, meaning that there is a serious risk that users/miners that did 
not upgrade start following an alternative chain). This gives everyone 
time to prepare properly for such a potentially disruptive event.

8. If a significant number of users and miners consciously decide (for 
whatever reasons) that they don't want to upgrade and want to fork 
themselves off from the chain followed by Core (as is their 
prerogative), they will have time to do so safely.

9. Compared to the strategy of doing LOT=false and then LOT=true if it 
fails, using the decreasing threshold approach may not seem very 
different. But it completely removes the need to fiddle with different 
client releases and with the issues associated with deployed nodes with 
different consensus parameters.

All in all, reading the various perspectives on this mailing list and 
outside I have the feeling that the strongest arguments against LOT=true 
have at their core a certain uneasiness with the MUST_SIGNAL mechanism 
and the related automatic chain split on activation, which is something 
that greatly complicates the analysis (but please tell me if I am 
wrong...). In this sense, this proposal achieves the big objective of 
always ending in activation (like LOT=true) without resorting to 
MUST_SIGNAL and chain splits.

A final note: this proposal should be seen as somewhat independent from 
the discussion on taproot activation. Personally I would be happy with a 
LOT=false activation for taproot that succeeds quickly, while the 
decreasing threshold approach could be evaluated as potential default 
activation mechanism for the future.

I would be happy to hear what you think about this. What are the 
possible issues/drawbacks of using this mechanism?

Thanks,

Gregorio

[1] 
https://bitcoinmagazine.com/articles/lottrue-or-lotfalse-this-is-the-last-hurdle-before-taproot-activation

[2] This was not the case in the past for upgrades such as BIP16 (P2SH), 
which generated frequent reorgs due to a combination of low activation 
threshold (55%) and no policy protection. But for upgrades such as 
taproot the normal policy rules prevent the creation of invalid blocks 
by non-upgraded miners. See 
https://blog.bitmex.com/the-arts-of-making-softforks-protection-by-policy-rule/

Pseudocode:

         case STARTED:
             int elapsed_periods = (block.height - startheight) / 2016;
             if (elapsed_periods > 2016 / 24) {
                 return FAILED;
             }
             int threshold = 2016 - 24 * (elapsed_periods - 1);
             int count = 0;
             walk = block;
             for (i = 0; i < 2016; i++) {
                 walk = walk.parent;
                 if (walk.nVersion & 0xE0000000 == 0x20000000 && (walk.nVersion >> bit) & 1 == 1) {
                     ++count;
                 }
             }
             if (count >= threshold) {
                 return LOCKED_IN;
             }
             return STARTED;