Author: William Morriss 2017-11-30 00:47:43
Published on: 2017-11-30T00:47:43+00:00
The author proposes a new economic approach to maximize total fee collection and hashpower in the long term. The goal is to reduce pending transaction time, reduce individual transaction fees and maximize total transaction fees. However, validators must agree on the maximum block size, or miners can cheat and include extra transactions. Allowing too many transactions per block will increase the cost of mining without collecting much income for the network.In the transaction market, users are the demand curve, while the block size is the supply curve. Currently, the supply curve is inelastic. Increasing the block size will not affect the inelasticity for any fixed block size. The downsides of a fixed block size limit are unpredictable transaction settlement time, variable transaction fees depending on network congestion, and frequent overpay. The proposal is to remove the block size limit, which is no longer necessary, and have miners implicitly choose the market sat/byte rate with the cheapest-fee transaction included in their block. Excess transaction fees are refunded to the inputs. Miners individually make decisions to maximize their block-reward profit. Users and services are free to bid higher transaction fees to reach the next block since their excess bid will be refunded. Benefits include dynamic block size limit regulated by profit motive, transaction fees maximized for every block, and no overpay; all fees are fair. Rarely, sections of the backlog would become large enough to be profitable. This means every so many blocks, lower-fee transactions would be included en masse after having been ignored long enough. Low-fee transactions thus gain a liveness property not previously enjoyed: low-fee transactions will eventually confirm. Miners targeting these transactions would be at a noteworthy disadvantage because they would be hashing a larger block, resulting in two markets: backlog market and real-time market. Users targeting the backlog market would match the price of the largest backlog section to be included in the next backlog block. The block size limit was added as a spam-prevention measure, but anti-spam is built into the marginal system without the need for an explicit limit.
Updated on: 2023-06-12T22:23:01.101752+00:00