Author: Thomas Voegtlin 2015-05-10 23:11:55
Published on: 2015-05-10T23:11:55+00:00
In a discussion on increasing the block size in Bitcoin, Mark Friedenbach proposed a mechanism for miners to trade subsidy for increased fees. This proposal would only make sense if the marginal fee per KB exceeds the subsidy fee per KB. In such cases, it would be logical to increase the block size, but note that as the block shrinks, the marginal fee rate goes up. To prevent incentive edge cases and a sharp shock to the current fee-poor economy, limits have been placed on both the relative and absolute amount a miner can trade subsidy for block size. It has also been suggested that instead of the linear identity transform, other more interesting functions could be used. The sign reversal occurs when fees exceed subsidy and the block size is increased twice as fast as the difficulty.
Updated on: 2023-06-09T20:08:23.406399+00:00