Author: Jameson Lopp 2015-08-19 11:42:06
Published on: 2015-08-19T11:42:06+00:00
Bitcoin developers are discussing the failure of consensus on how to fix the design flaw evinced by the block size fiasco. Satoshi Nakamoto suggested a better incentive for users to run nodes instead of relying solely on altruism. The incentives for running a node may not be obvious to the average user, but they are indirectly present. The argument against a block size increase is the further reduction in the node count. Therefore, it makes sense to focus all energies on solving the root cause if we are to save Bitcoin in the short and long run. There are several thoughts on how Bitcoin can be improved so that more people will be incentivised to run nodes. The current incentive is run like a lottery which leads to centralization. Decentralized proof-of-work is equivalent to value. In order for there to be consensus, there must be a triumph of ideas over people. Mining in the pooled sense can be done without doing any validation whatsoever. By tying mining with transaction validation, the two must become inseparable. The incentive to run nodes shall be made monetary. All the reward is currently going to those who do not really support the network. This also requires every mined transaction to contain a block header, in case it becomes a new block in the block chain. It will contain a prev block hash, a merkle tree of mined transactions in the mempool, a nonce and two separate coinbase addresses.Block POW difficulty can remain as it currently does, to produce blocks at approximately 10 minute intervals. Transaction POW difficulty affects the rate at which mined transactions are produced. Greater decentralisation of POW leads to increased mined transaction rate (given sufficient unmined transaction rate production). Nodes only need work on transactions if they are valid. Large block spam attack is expensive due to the POW needed to mine the gigantic number of transactions. Decentralisation of nodes is encouraged to be close to the location of real transaction origination i.e. consumers. Block-level reward is still a decentralised lottery. Transaction-level rewards go to those running the network. Fees will go up as it will be the nodes that are mining transactions that need to be individually compensated, and not miners mining only block headers.
Updated on: 2023-06-10T20:36:17.375307+00:00