From mboxrd@z Thu Jan 1 00:00:00 1970 Return-Path: Received: from hemlock.osuosl.org (smtp2.osuosl.org [140.211.166.133]) by lists.linuxfoundation.org (Postfix) with ESMTP id A1EE9C0177 for ; Sat, 28 Mar 2020 02:12:44 +0000 (UTC) Received: from localhost (localhost [127.0.0.1]) by hemlock.osuosl.org (Postfix) with ESMTP id 8C295896B2 for ; Sat, 28 Mar 2020 02:12:44 +0000 (UTC) X-Virus-Scanned: amavisd-new at osuosl.org Received: from hemlock.osuosl.org ([127.0.0.1]) by localhost (.osuosl.org [127.0.0.1]) (amavisd-new, port 10024) with ESMTP id tOAGSds9FyHi for ; Sat, 28 Mar 2020 02:12:42 +0000 (UTC) X-Greylist: domain auto-whitelisted by SQLgrey-1.7.6 Received: from mail-40130.protonmail.ch (mail-40130.protonmail.ch [185.70.40.130]) by hemlock.osuosl.org (Postfix) with ESMTPS id CBCAA89660 for ; Sat, 28 Mar 2020 02:12:41 +0000 (UTC) Date: Sat, 28 Mar 2020 02:12:37 +0000 DKIM-Signature: v=1; a=rsa-sha256; c=relaxed/relaxed; d=protonmail.com; s=default; t=1585361559; bh=TDyBg4q9k+QRJpUd8+cItvIt41II7ohuLNgHfr0b/jU=; h=Date:To:From:Cc:Reply-To:Subject:In-Reply-To:References:From; b=SmtxJD2JARSkdUaKFiwCIqVDWRqOE0xsaEsWHK+8A0Rypd2JGhSPkaqOVuASI/Sji 7KNo3D6JJcmTV0qL5M6N64t7mfTzNJjVJz9wPZZXEF8TiZISdqJTZz3N6koIJjmJ+q NdWwOa2VXT8qyXDL1hKoQuq5d8fPAflKnRoFDl5c= To: Andrew Cann From: ZmnSCPxj Reply-To: ZmnSCPxj Message-ID: In-Reply-To: <20200327091734.GA6531@canndrew.org> References: <20200323125922.GA29881@canndrew.org> <20200325152302.GA3355@canndrew.org> <20200327091734.GA6531@canndrew.org> MIME-Version: 1.0 Content-Type: text/plain; charset=UTF-8 Content-Transfer-Encoding: quoted-printable Cc: Bitcoin Protocol Discussion Subject: Re: [bitcoin-dev] Block solving slowdown question/poll 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: Sat, 28 Mar 2020 02:12:44 -0000 Good morning Andrew, > Here's a better explanation than I could write of the phenomenon I'm talk= ing > about: > > > As a thought experiment, let=E2=80=99s consider aquaculture (fish farmi= ng) in a lake. > > Imagine a lake with a thousand identical fish farms owned by a thousand > > competing companies. Each fish farm earns a profit of $1000/month. For = a > > while, all is well. > > But each fish farm produces waste, which fouls the water in the lake. L= et=E2=80=99s > > say each fish farm produces enough pollution to lower productivity in t= he > > lake by $1/month. > > A thousand fish farms produce enough waste to lower productivity by > > $1000/month, meaning none of the fish farms are making any money. Capit= alism > > to the rescue: someone invents a complex filtering system that removes = waste > > products. It costs $300/month to operate. All fish farms voluntarily in= stall > > it, the pollution ends, and the fish farms are now making a profit of > > $700/month =E2=80=93 still a respectable sum. > > But one farmer (let=E2=80=99s call him Steve) gets tired of spending th= e money to > > operate his filter. Now one fish farm worth of waste is polluting the l= ake, > > lowering productivity by $1. Steve earns $999 profit, and everyone else= earns > > $699 profit. > > Everyone else sees Steve is much more profitable than they are, because= he=E2=80=99s > > not spending the maintenance costs on his filter. They disconnect their > > filters too. > > Once four hundred people disconnect their filters, Steve is earning > > $600/month =E2=80=93 less than he would be if he and everyone else had = kept their > > filters on! And the poor virtuous filter users are only making $300. St= eve > > goes around to everyone, saying =E2=80=9CWait! We all need to make a vo= luntary pact > > to use filters! Otherwise, everyone=E2=80=99s productivity goes down.= =E2=80=9D > > Everyone agrees with him, and they all sign the Filter Pact, except one > > person who is sort of a jerk. Let=E2=80=99s call him Mike. Now everyone= is back using > > filters again, except Mike. Mike earns $999/month, and everyone else ea= rns > > $699/month. Slowly, people start thinking they too should be getting bi= g > > bucks like Mike, and disconnect their filter for $300 extra profit= =E2=80=A6 > > A self-interested person never has any incentive to use a filter. A > > self-interested person has some incentive to sign a pact to make everyo= ne use > > a filter, but in many cases has a stronger incentive to wait for everyo= ne > > else to sign such a pact but opt out himself. This can lead to an undes= irable > > equilibrium in which no one will sign such a pact. > > Won't a thousand bitcoin-spenders, individually paying for their transact= ions > but collectively paying for their security, end up falling into the same > dynamic? Fortunately in our case, only the top 4,000,000 weight worth of transaction= s gets in a block. Every bitcoin spender has an incentive to spend as little as possible to ge= t into this top 4,000,000 weight and no more, but they still have to outbid= every other user who wants the same security. Some bitcoin spender will then decide that overpaying slightly to ensure th= at they do not drop out of the top 4,000,000 weight even in case of a "slow= " block. Thus, there will always be a need for *some* block weight limit, and that i= s what ensures that miners can get paid. Now it was brought up earlier that people are moving transactions offchain,= but that is perfectly fine, because every offchain mechanism first needs a= n onchain setup, and will at some point need an onchain teardown. This allows increasing the effective capacity, while still ensuring that on= chain fees remain at a level that will still ensure continued healthy opera= tion of the blockchain layer. Basically, the offchain mechanism does not remove onchain fees, it only amo= rtizes the onchain fees to multiple logical transactions. Regards, ZmnSCPxj