rich1.0npub1fx98zxt3lzspjs5f4msr0fxysx5euucm29ghysryju7vpc9j0jzqtcl2d8https://nostr.ae/npub1fx98zxt3lzspjs5f4msr0fxysx5euucm29ghysryju7vpc9j0jzqtcl2d8njumphttps://nostr.ae📅 Original date posted:2015-08-05 📝 Original message:There is a common meme that block propagation times is the only metric that matters when it comes to value the block size maximum consensus rule's usefulness in limiting mining centralization. Here is an extremely optimist thought experiment for those who think that is the case: Imagine that superluminal communication has somehow been invented and validity of mined blocks can be checked in constant time thanks to some sort of snarks magic. This doesn't mean that block propagation is O(1) with respect to time because each node needs to repeat that cheap validation before relaying the block. Still, this is the best situation we can imagine with respect to block propagation, right? No, wait, due to some technical or economical miracle this superluminal communication is free for everyone: better-than-physically-possible (our understanding of physics changes with time as well, right?) communication and infinite bandwidth for everyone. At this point, does the consensus block size maximum still help limiting mining centralization or we can just remove it entirely? The answer is yes, it can help limit mining centralization. Let's imagine that these amazing advancements have happened in less than 22 years and we only had 6 more subsidy halvings, that's only 7 halvings in total, so the subsidy is still as high as 50 * (0.5 ^ 7) = 0.390625 btc/block Although the orphan-block-probability cost for a miner to include an extra transaction has been completely minimized, it is still not null. Let's assume that while all these technical miracles were happening...that 22 more years was enough for miners to realize this fact, they have removed the special-cased-for-free-transaction policy code that currently comes with Bitcoin Core (or it has been removed from Bitcoin Core) and they don't mine transactions with fees lower than 1 satoshi anymore. <sarcasm>I hope this last assumption doesn't turn out to be more wild than superluminal communication...</sarcasm> But there must be a physical limit: in our example, miners will have different CPU constraints (to further simplify, genetically-engineered and super-fast memory also grows in the streets everywhere after an accident in a Monsanto Lab; or better downloadmoreram.com actually works and I just hadn't tried from windows or mac). Miner A is able to process 100 M tx/block while miner B is only able to process 10 M tx/block. Will miner B be able to maintain itself competitive against miner B? The answer is: it depends on the consensus maximum block size. How so? Let's imagine that it has been completely removed. Assuming a fee of 1 satoshi per transaction and no shortage of unconfirmed transactions, miner A's block reward will be 0.390625 + 1 = 1.390625 btc vs miner B's 0.390625 + 0.1 = 0.390625 + 0.1 = 0.490625 btc. Difficulty will tend to increase until the cost to produce a block (including interest in all the capital needed, paid or not) is equal to 1.390625 btc and therefore miner B will stop mining or go bankrupt. But maybe 100 M and 10 M were too high numbers. What about 10 M and 1 M? Still, 0.400625 btc can't compete with 0.490625 btc. You think 10x is too much of a difference? Fine, 2M vs 1M: still 0.400625 btc can't compete with 0.410625 btc In summary, there will always be some physical limitation that may benefit big mining players, so the block size maximum will always be useful to limit mining centralization. In other words (and I don't intend this to sound rude), if you want to eventually remove the block size maximum consensus rule entirely, I will never be able to agree with you: not even in your wildest dreams.