{"type":"rich","version":"1.0","author_name":"npub1ldcq03p2qe58u0xnlwa35wchjuhz49y6ueu5ghmtjetez9xstnvsmt8ur6","author_url":"https://nostr.ae/npub1ldcq03p2qe58u0xnlwa35wchjuhz49y6ueu5ghmtjetez9xstnvsmt8ur6","provider_name":"njump","provider_url":"https://nostr.ae","html":"📅 Original date posted:2022-07-11\n📝 Original message:If transaction fees came in at an even rate over time all at the exact same\nlevel then they work fine for security, acting similarly to fixed block\nrewards. Unfortunately that isn't how it works in the real world. There's a\nvery well established day/night cycle with fees going to zero overnight and\neven longer gaps on weekends and holidays. If in the future Bitcoin is\nentirely dependent on fees for security (scheduled very strongly) and this\npattern keeps up (overwhelmingly likely) then this is going to become a\nserious problem.\n\nWhat's likely to happen is that at first there will simply be no or very\nfew blocks mined overnight. There are likely to be some, as miners at first\nturn off their mining rigs completely overnight then adopt the more\nsophisticated strategy of waiting until there are enough fees in the\nmempool to warrant attempting to make a block and only then doing it.\nUnfortunately the gaming doesn't end there. Eventually the miners with\nlower costs of operation will figure out that they can collectively reorg\nthe last hour (or some time period) of the day overnight and this will be\nprofitable. That's likely to cause the miners with more expensive\noperations to stop attempting mining the last hour of the day preemptively.\n\nWhat happens after that I'm not sure. There are a small enough number of\nminers with a quirky enough distribution of costs of operation and\nprofitability that the dynamic is heavily dependent on those specifics, but\nthe beginnings of a slippery slope to a mining cabal which reorgs everyone\nelse out of existence and eventually 51% attacks the whole thing have\nbegun. It even gets worse than that because once there's a cabal\naggressively reorging anyone else out when they make a block other miners\nwill shut down and rapidly lose the ability to quickly spin up again, so\nthe threshold needed for that 51% attack will keep going down.\n\nIn short, relying completely on transaction fees for security is likely to\nbe a disaster. What we can say from existing experience is that having\ntransaction fees be about 10% of rewards on average works well. It's enough\nto incentivize collecting fees but not so much that it makes incentives get\nall weird. 90% transaction fees is probably very bad. 50% works but runs\nthe risk of spikes getting too high.\n\nThere are a few possible approaches to fixes. One would be to drag most of\neast asia eastward to a later time zone thus smoothing out the day/night\ncycle but that's probably unrealistic. Another would be to hard fork in\nfixed rewards in perpetuity, which is slightly less unrealistic but still\nextremely problematic.\n\nMuch more actionable are measures which smooth out fees over time. Having\nwallets opportunistically collect their dust during times of low\ntransaction fees would help and would save users on fees. Also making UX\nwhich clarifies when things are likely to take a day or week but that it's\nreliable would be a reasonable thing to do, but users unfortunately are\nvery averse to transactions taking a while.\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20220711/27bad65b/attachment.html\u003e"}