npub1ep…m3rel

📅 Original date posted:2012-06-15
📝 Original message:Forcing users to switch addresses per received payment to work around a bad fee system would be a braindead decision. You might love software and playing with web plugins, but not everyone does. Artists like Rap News can right now simply throw up an address and begin accepting donations. That's a hugely powerful and impactful selling point for Bitcoin.
I don't really see these problems as a concern. Stefan made an excellent post which touched on this, in that miners have an incentive to keep block sizes low so that their blocks propagate. The real problem here is not about block propagation but the user experience. The way I see it, Bitcoin is becoming more specialised over time and part of that process is abstraction. In the past we all used the Satoshi client for mining, merchant functions, validating blocks and personal uses. These are rapidly diverging, and managing the blockchain is not something that user clients should be doing.
Mike is right when he says the network only needs a few thousand nodes to function fairly. I am not worried about Bitcoin becoming corrupted because of it being a network "by bankers for bankers" because unlike the conventional finance industry, there are no artificial barriers to entry beyond the base cost. This network would always be competitive and strictly operate based on market dynamics.
Case in point: http://en.wikipedia.org/wiki/Coase_theorem
With strict property rights and zero (or low) transaction costs, the allocation of a system does not matter. The system will make efficient use of its resources. I don't see why a cabal would try to corrupt Bitcoin at expense to themselves when a new competitor can enter the market and undercut them. It's why we expect the ROI on mining to be 0 or negative.
I figured out that if you trust data from a blockchain service and only accept data with multiple confirms from each connected service, then you can trivially calculate the probability of being fed corrupt data (assuming a fixed chance per server). In this way, the model is a fault tolerant byzantine system. The chance of being manipulated falls expontentially as you add more servers. And these services can be made highly scalable if you see my BIP 33.
https://en.bitcoin.it/wiki/BIP_0033
________________________________
From: Mike Koss <mike at coinlab.com>
To: Stefan Thomas <moon at justmoon.de>
Cc: bitcoin-development at lists.sourceforge.net
Sent: Friday, June 15, 2012 7:37 PM
Subject: Re: [Bitcoin-development] Near-term scalability
Grouping mempool transactions based on fees of the group seems an unnecessary complexity; it makes it harder to predict if an isolated transaction has enough "juice" to be included in the next Block.
Given your point about economic actors adapting to conditions, would it not be simpler to use a individual "fee per byte" priority algorithm and let transaction generators distribute their fees accordingly (and more predictably)?
This simpler algorithm will prune arbitrary transactions sub-optimally, but has the benefit of being more understandable and predictable from the point of view of transaction generators.
On Fri, Jun 15, 2012 at 9:56 AM, Stefan Thomas <moon at justmoon.de> wrote:
Thanks Mike for the writeup - I'm very sad to have missed the discussion
>on IRC since fee economics are probably my favorite topic, but I'll try
>to contribute to the email discussion instead.
>
>
>> (4) Making the block size limit float is better than picking a new
>> arbitrary threshold.
>
>Fees are a product of both real and artificial limits to transaction
>validation.
>
>The artificial limits like the block size limit are essentially putting
>a floor on prices by limiting supply beyond what it would otherwise be.
>E.g. the network could confirm more transactions theoretically, but the
>block size limit prevents it.
>
>The real limits are the bandwidth, computing and memory resources of
>participating nodes. For the sake of argument suppose a 1 TB block was
>released into the network right now and we'll also assume there was no
>block size limit of any kind. Many nodes would likely not be able to
>successfully download this block in under 10-30 minutes, so there is a
>very good chance that other miners will have generated two blocks before
>this block makes its way to them.
>
>What does this mean? The miner generating a 1 TB block knows this would
>happen. So in terms of economic self interest he will generate the
>largest possible block that he is still confident that other miners will
>accept and process. A miner who receives a block will also consider
>whether to build on it based on whether they think other miners will be
>able to download it. In other words, if I receive a large block I may
>decide not to mine on it, because I believe that the majority of mining
>power will not mine on it - because it is either too large for them to
>download or because their rules against large blocks reject it.
>
>It's important to understand that in practice economic actors tend to
>plan ahead. In other words, if there is no block size limit that doesn't
>mean that there will be constant forks and total chaos. Rather, no miner
>will ever want to have a block rejected due to size, there is plenty of
>incentive to be conservative with your limits. Even if there are forks,
>this simply means that miners have decided that they can make more money
>by including more transactions at the cost of the occasional dud.
>
>Therefore, from an economic perspective, we do not need a global block
>size limit of any kind. As "guardians of the network" the only thing we
>need to do is to let miners figure out what they wanna do.
>
>HOWEVER, the existing economic incentives won't manifest unless somebody
>translates them into code. We have to give our users (miners & endusers)
>the tools to create a genuine fee-based verification market.
>
>On the miner side: I would make the block size limit configurable with a
>relatively high default. If the default is too low few people will
>bother changing it, which means that it is not worth changing (because a
>majority uses the default anyway), which means even fewer people will
>change it and so on.
>
>The block size limit should also be a soft rather than a hard limit -
>here are some ideas for this:
>
>- The default limit for accepting blocks from others should always be
>significantly greater than the default limit for blocks that the client
>itself will generate.
>
>- There should be different size limits for side chains that are longer
>than the currently active chain. In other words, I might reject a block
>for being slightly too large, but if everyone else accepts it I should
>eventually accept it too, and my client should also consider
>automatically raising my size limit if this happens a lot.
>
>The rationale for the soft limit is to allow for gradual upward
>adjustment. It needs to be risky for individual miners to raise the size
>of their blocks to new heights, but ideally there won't be one solid
>wall for them to run into.
>
>On the user side: I would display the fee on the Send Coins dialog and
>allow users to choose a different fee per transaction. We also talked
>about adding some UI feedback where the client tries to estimate how
>long a transaction will take to confirm given a certain fee, based on
>recent information about what it observed from the network. If the fee
>can be changed on the Send Coins tab, then this could be a red, yellow,
>green visual indication whether the fee is sufficient, adequate or
>dangerously low.
>
>A criticism one might raise is: "The block size limit is not to protect
>miners, but to protect end users who may have less resources than miners
>and can't download gigantic block chains." - That's a viewpoint that is
>certainly valid. I believe that we will be able to do a lot just with
>efficiency improvements, pruning, compression and whatnot. But when it
>comes down to it, I'd prefer a large network with cheap
>microtransactions even if that means that consumer hardware can't
>operate as a standalone validating node anymore. Headers-only mode is
>already a much-requested feature anyway and there are many ways of
>improving the security of various header-only or lightweight protocols.
>
>(I just saw Greg's message advocating the opposite viewpoint, I'll
>respond to that as soon as I can.)
>
>
>
>> (1) Change the mining code to group transactions together with their
>> mempool dependencies and then calculate all fees as a group.
>
>+1 Very good change. This would allow miners to maximize their revenue
>and in doing so better represent the existing priorities that users
>express through fees.
>
>
>
>> There was discussion of some one-off changes to address the current
>> situation, namely de-ranking transactions that re-use addresses.
>
>Discouraging address reuse will not change the amount of transactions, I
>think we all agree on that. As for whether it improves the
>prioritization, I'm not sure. Use cases that we seek to discourage may
>simply switch to random addresses and I don't agree in and of itself
>this is a benefit (see item 4 below). Here are a few reasons one might
>be against this proposal:
>
>1) Certain use cases like green addresses will be forced to become more
>complicated than they would otherwise need to be.
>
>2) It will be harder to read information straight out of the block
>chain, for example right now we can pretty easily see how much volume is
>caused by Satoshi Dice, perhaps allowing us to make better decisions.
>
>3) The address index that is used by block explorers and lightweight
>client servers will grow unnecessarily (an address -> tx index will be
>larger if the number of unique addresses increases given the same number
>of txs), so for people like myself who work on that type of software
>you're actually making our scalability equation slightly worse.
>
>4) You're forcing people into privacy best practices which you think are
>good, but others may not subscribe to. For example I have absolutely
>zero interest in privacy, anyone who cares that I buy Bitcoins with my
>salary and spend them on paragliding is welcome to know about it.
>Frankly, if I cared about privacy I wouldn't be using Bitcoin. If other
>people want to use mixing services and randomize their addresses and
>communicate through Tor that's fine, but the client shouldn't force me
>to do those things if I don't want to by "deprioritizing" my transactions.
>
>5) We may not like firstbits, but the fact remains that for now they are
>extremely popular, because they improve the user experience where we
>failed to do so. If you deprioritize transactions to reused addresses
>you'll for example deprioritize all/most of Girls Gone Bitcoin, which
>(again, like it or not) is one of the few practical, sustainable niches
>that Bitcoin has managed to carve out for itself so far.
>
>
>
>> Having senders/buyers pay no fees is psychologically desirable even
>> though we all understand that eventually, somebody, somewhere will be
>> paying fees to use Bitcoin
>
>Free is just an extreme form of cheap, so if we can make transactions
>very cheap (through efficiency and very large blocks) then it will be
>easier for charitable miners to include free transactions. In practice,
>my prediction is that free transactions on the open network will simply
>not be possible in the long run. Dirty hacks aside there is simply no
>way of distinguishing a spam transaction from a charity-worthy
>transaction. So the way I envision free transactions in the future is
>that there may be miners in partnership with wallet providers like
>BlockChain.info that let you submit feeless transactions straight to
>them based on maybe a captcha or some ads. (For the purist, the captcha
>challenge and response could be communicated across the bitcoin network,
>but I think we agree that such things should ideally take place
>out-of-band.)
>
>That way, the available charity of miners who wish to include feeless
>transactions would go to human users as opposed to the potentially
>infinite demand of auto-generated feeless transactions.
>
>
>
>
>On 6/15/2012 1:29 PM, Mike Hearn wrote:
>> I had to hit the sack last night as it was 2am CET, but I'd like to
>> sum up the discussion we had on IRC about scalability and SatoshiDice
>> in particular.
>>
>> I think we all agreed on the following:
>>
>> - Having senders/buyers pay no fees is psychologically desirable even
>> though we all understand that eventually, somebody, somewhere will be
>> paying fees to use Bitcoin
>>
>> - In the ideal world Bitcoin would scale perfectly and there would be
>> no need for there to be some "winners" and some "losers" when it comes
>> to confirmation time.
>>
>> There was discussion of some one-off changes to address the current
>> situation, namely de-ranking transactions that re-use addresses. Gavin
>> and myself were not keen on this idea, primarily because it just
>> avoids the real problem and Bitcoin already has a good way to
>> prioritize transactions via the fees mechanism itself. The real issue
>> is that SatoshiDice does indeed pay fees and generates a lot of
>> transactions, pushing more traditional traffic out due to artificial
>> throttles.
>>
>> The following set of proposals were discussed:
>>
>> (1) Change the mining code to group transactions together with their
>> mempool dependencies and then calculate all fees as a group. A tx with
>> a fee of 1 BTC that depends on 5 txns with zero fees would result in
>> all 6 transactions being considered to have a fee of 1BTC and
>> therefore become prioritized for inclusion. This allows a transition
>> to "receiver pays" model for fees. There are many advantages. One is
>> that it actually makes sense ... it's always the receiver who wants
>> confirmations because it's the receiver that fears double spends.
>> Senders never do. What's more, whilst Bitcoin is designed to operate
>> on a zero-trust model in the real world trust often exists and it can
>> be used to optimize by passing groups of transactions around with
>> their dependencies, until that group passes a trust boundary and gets
>> broadcast with a send-to-self tx to add fees. Another advantage is it
>> simplifies usage for end users who primarily buy rather than sell,
>> because it avoids the need to guess at fees, one of the most
>> problematic parts of Bitcoins design now.
>>
>> The disadvantages are that it can result in extra transactions that
>> exist only for adding fees, and it requires a more modern payment
>> protocol than the direct-IP protocol Satoshi designed.
>>
>> It would help address the current situation by avoiding angry users
>> who want to buy things, but don't know what fee to set and so their
>> transactions get stuck.
>>
>> (2) SatoshiDice should use the same fee algorithms as Bitcoin-Qt to
>> avoid paying excessive fees and queue-jumping. Guess that's on my
>> plate.
>>
>> (3) Scalability improvements seem like a no brainer to everyone, it's
>> just a case of how complicated they are.
>>
>> (4) Making the block size limit float is better than picking a new
>> arbitrary threshold.
>>
>> On the forums Matt stated that block chain pruning was a no-go because
>> "it makes bitcoin more centralized". I think we've thrashed this one
>> out sufficiently well by now that there should be a united opinion on
>> it. There are technical ways to implement it such that there is no
>> change of trust requirements. All the other issues (finding archival
>> nodes, etc) can be again addressed with sufficient programming.
>>
>> For the case of huge blocks slowing down end user syncing and wasting
>> their resources, SPV clients like MultiBit and Android Wallet already
>> exist and will get better with time. If Jeff implements the bloom
>> filtering p2p commands I'll make bitcoinj use them and that'll knock
>> out excessive bandwidth usage and parse overheads from end users who
>> are on these clients. At some point Bitcoin-Qt can have a dual mode,
>> but who knows when that'll get implemented.
>>
>> Does that all sound reasonable?
>>
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>
>
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A Bitcoin Primer - What you need to know about Bitcoins.
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