Published on: 2015-08-30T21:02:48+00:00
The email exchanges and discussions on the bitcoin-dev mailing list revolve around various aspects of Bitcoin mining, block size, fee markets, and security. One important result is that an individual miner's profit per block is maximized at a finite block size Q* if Shannon Entropy is communicated during the block solution announcement. This result shows how a minimum fee density exists, preventing miners from creating spam blocks for free.However, concerns are raised about the lower bound of expected revenue being surpassed, potentially leading to unhealthy fee markets. It is also noted that larger hash rates provide a profitability advantage but are outside the scope of the previous point. Gmaxwell's theorem challenges the work by suggesting that centralization pressures will always be present due to the increasing marginal profit curve of miner hashrate.Further discussions explore the modeling of propagation characteristics, orphan rate in mining, and the impact of block size on fees and spam costs. The paper by Peter R titled "A Transaction Fee Market Exists Without a Block Size Limit" examines the cost of producing large spam blocks and demonstrates that a block size limit is not necessary to ensure a functioning fee market. However, questions are raised about mining cartels and the size of the UTXO set.Ideas are proposed for a futures market in block size and a prediction market to determine the new block size based on the current BLK/BTC price. The complexity and security issues of such markets are debated, and the involvement of Bitcoin.org in running the exchange is suggested. Various participants express their opinions on these ideas, discussing the necessity of decentralization, security concerns, and potential improvements or complications introduced by these markets.The Flexcap idea is also mentioned as an alternative to giving miners complete control over block sizes, aiming to achieve similar effects without negative side-effects like cartelization and selfish mining. Different levels of security and consensus rules are emphasized when considering proposals.The discussion in August 2015 focuses on the existence of a fee market for Bitcoin and the possibility of improving the matching mechanism between supply and demand. The concept of a prediction market involving informed participants is proposed, with the technical implementation left for further consideration.The research paper by Peter R provides insights into the rational selection of transactions by miners to maximize their profit and introduces block space supply and mempool demand curves. It argues that an unhealthy fee market cannot exist due to the need for fast information communication. The paper also raises questions related to mining cartels and the UTXO set size.Throughout the discussions, caution is advised when conducting research in the politically charged and controversial field of block size limits. The importance of expertise and knowledge beyond Bitcoin is emphasized, and suggestions are made to avoid drama-filled posts on public platforms.Overall, these email exchanges and discussions shed light on important aspects of Bitcoin mining, block size, fee markets, and security, highlighting the complexities and challenges involved in these areas.In a recent discussion on the bitcoin-dev mailing list, Gavin Andresen and Dave Hudson debated the possibility of block makers orphaning their own blocks. Hudson argued that a block maker does not orphan its own blocks, while Andresen disagreed, stating that two hashing units could find solutions in the time it takes to communicate that solution to the rest of the hashing units. This led to a discussion about the advantages of putting hashing power physically close together, with Andresen suggesting it as a topic for another paper.However, this discussion took a contentious turn when someone accused Andresen of deliberately lying and toxic conduct, urging him to leave the development mailing list discussion. The post highlighted the importance of seeking expert opinions before publishing to avoid controversy and mentioned that immature behavior by developers can be detrimental to the development mailing list discussions.Another topic discussed on the bitcoin-dev mailing list was a research paper shared by Peter R titled "A Transaction Fee Market Exists Without a Block Size Limit." The paper argues that a block size limit is not necessary for a functioning fee market due to the orphaning cost. It presents useful charts, including the cost to produce large spam blocks. However, the paper raises questions about mining cartels and the size of the UTXO set. It introduces the block space supply curve and the mempool demand curve, which represent the cost for a miner to supply block space and the fees offered by transactions in the mempool, respectively. The paper explains how these curves relate to classical economics' supply and demand curves and proves that producing the quantity of block space indicated by their intersection point maximizes the miner's profit. It also shows that an unhealthy fee market requiring communication at an arbitrarily fast rate cannot exist. The paper considers the conditions under which a rational miner would produce big, small, or empty blocks and estimates the cost of a spam attack.Overall, these discussions on the bitcoin-dev mailing list highlight the importance of seeking expert opinions, avoiding toxic conduct, and considering various factors in the development of Bitcoin, such as orphaning blocks and the need for a block size limit to ensure a functioning fee market.
Updated on: 2023-08-01T14:55:25.049188+00:00