{"type":"rich","version":"1.0","author_name":"npub1r3san9v5njl6798hvauyu9ntm6r9c7u8s0t65wls58gpfdcvqp5sa48d0u","author_url":"https://nostr.ae/npub1r3san9v5njl6798hvauyu9ntm6r9c7u8s0t65wls58gpfdcvqp5sa48d0u","provider_name":"njump","provider_url":"https://nostr.ae","html":"📅 Original date posted:2015-05-10\n📝 Original message:I'm on my phone today so I'm somewhat constrained in my reply, but the key\ntakeaway is that the proposal is a mechanism for miners to trade subsidy\nfor the increased fees of a larger block. Necessarily it only makes sense\nto do so when the marginal fee per KB exceeds the subsidy fee per KB. It\ncorrespondingly makes sense to use a smaller block size if fees are less\nthan subsidy, but note that fees are not uniform and as the block shrinks\nthe marginal fee rate goes up..\n\nLimits on both the relative and absolute amount a miner can trade subsidy\nfor block size prevent incentive edge cases as well as prevent a sharp\nshock to the current fee-poor economy (by disallowing adjustment below 1MB).\n\nAlso the identity transform was used only for didactic purposes. I fully\nexpect there to be other, more interesting functions to use.\nOn May 10, 2015 3:03 PM, \"Thomas Voegtlin\" \u003cthomasv at electrum.org\u003e wrote:\n\n\u003e Le 08/05/2015 22:33, Mark Friedenbach a écrit :\n\u003e\n\u003e \u003e   * For each block, the miner is allowed to select a different difficulty\n\u003e \u003e (nBits) within a certain range, e.g. +/- 25% of the expected difficulty,\n\u003e \u003e and this miner-selected difficulty is used for the proof of work check.\n\u003e In\n\u003e \u003e addition to adjusting the hashcash target, selecting a different\n\u003e difficulty\n\u003e \u003e also raises or lowers the maximum block size for that block by a function\n\u003e \u003e of the difference in difficulty. So increasing the difficulty of the\n\u003e block\n\u003e \u003e by an additional 25% raises the block limit for that block from 100% of\n\u003e the\n\u003e \u003e current limit to 125%, and lowering the difficulty by 10% would also\n\u003e lower\n\u003e \u003e the maximum block size for that block from 100% to 90% of the current\n\u003e \u003e limit. For simplicity I will assume a linear identity transform as the\n\u003e \u003e function, but a quadratic or other function with compounding marginal\n\u003e cost\n\u003e \u003e may be preferred.\n\u003e \u003e\n\u003e\n\u003e Sorry but I fail to see how a linear identity transform between block\n\u003e size and difficulty would work.\n\u003e\n\u003e The miner's reward for finding a block is the sum of subsidy and fees:\n\u003e\n\u003e  R = S + F\n\u003e\n\u003e The probability that the miner will find a block over a time interval is\n\u003e inversely proportional to the difficulty D:\n\u003e\n\u003e  P = K / D\n\u003e\n\u003e where K is a constant that depends on the miner's hashrate. The expected\n\u003e reward of the miner is:\n\u003e\n\u003e  E = P * R\n\u003e\n\u003e Consider that the miner chooses a new difficulty:\n\u003e\n\u003e  D' = D(1 + x).\n\u003e\n\u003e With a linear identity transform between block size and difficulty, the\n\u003e miner will be allowed to collect fees from a block of size: S'=S(1+x)\n\u003e\n\u003e In the best case, collected will be proportional to block size:\n\u003e\n\u003e  F' = F(1+x)\n\u003e\n\u003e Thus we get:\n\u003e\n\u003e  E' = P' * R' = K/(D(1+x)) * (S + F(1+x))\n\u003e\n\u003e  E' = E - x/(1+x) * S * K / D\n\u003e\n\u003e So with this linear identity transform, increasing block size never\n\u003e increases the miners gain. As long as the subsidy exists, the best\n\u003e strategy for miners is to reduce block size (i.e. to choose x\u003c0).\n\u003e\n\u003e\n\u003e ------------------------------------------------------------------------------\n\u003e One dashboard for servers and applications across Physical-Virtual-Cloud\n\u003e Widest out-of-the-box monitoring support with 50+ applications\n\u003e Performance metrics, stats and reports that give you Actionable Insights\n\u003e Deep dive visibility with transaction tracing using APM Insight.\n\u003e http://ad.doubleclick.net/ddm/clk/290420510;117567292;y\n\u003e _______________________________________________\n\u003e Bitcoin-development mailing list\n\u003e Bitcoin-development at lists.sourceforge.net\n\u003e https://lists.sourceforge.net/lists/listinfo/bitcoin-development\n\u003e\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150510/5281404f/attachment.html\u003e"}