Gold collapsing. Bitcoin UP.

[Mengerian]

If this technology proves ineffective or insufficient, then relying on orphan risk as a tool to keep blocks small and drive the fee market is a terrible idea for the following reasons:

But is it better to instead rely on a centralized group of developers to decree an arbitrary blocksize limit to try to drive a fee market?

It is easy to imagine several other ways a fee market could arise. For example, miners could "collude" to form a soft limit, without a need for the rest of the network to have a protocol-enforced limit. It is the miners, after all, who have an incentive to drive a fees. And as @Roger_Murdock pointed out, the public nature of the blockchain makes this cartel-like behavior possible.

But beyond all these details, why would we want to "keep blocks small and drive a fee market" anyway? Particularly at this point in Bitcoin's development? Wouldn't it be better to drive adoption and encourage more transactions for now? To allow experimentation with novel use cases while fees are low? To make it easy for people to build technologies and businesses around Bitcoin?

We have plenty of time to figure out how to finance blockchain security before the block subsidy drops too low.

 

[jonny1000]

Peter

I was pointing out your false claim of a contradiction in the criticism "Maxwell and Co" have in response to your paper. I explained its not a contradiction. You them go on to refute the points. I appreciate you disagree with them. However the claim you make about the contradiction is false, please withdraw that claim.

"Do you disagree that (holding all else constant) larger blocks are more likely to orphaned than smaller blocks?"

Nope. I just think the conclusion that orphan risk can be used as a deterrent to larger blocks is false either way.

"This reads as a non-sequitor to me. Do you mean it would increase orphan rates? "

Yes, it will increase both orphan rates and orphan risk costs.

"How does relying on orphan risk to limit the block size increase orphan risk itself?"

Because blocks are larger, the sizes of the blocks are pushed right to the limit to maximize revenue, therefore propagation risks increase. Most of your later comments ignore this point.

"Firstly, this doesn't matter until the block reward begins to phase out in a few decades."

The block reward is already 75% phased out. In general, I am concerned with the long term health of the network and look decades ahead. I think its important that people with this long term outlook are influential in Bitcoin development, to ensure we have sustainable growth. If you are concerned with very short term issues, I am simply not that interested, sorry.

"I showed in my subchains paper how orphan risk can greatly be reduced without a corresponding reduction in fee revenue"

I read the paper at the time, all I saw was ideas reducing orphan risks. I never saw anywhere, even after asking you to point it out, where it mentioned not having an impact of smaller fee revenue.
[doublepost=1463548226,1463547605][/doublepost]"But is it better to instead rely on a centralized group of developers to decree an arbitrary blocksize limit to try to drive a fee market?"

That is not the alternative, but yes, this hypothetical alternative would be far better than having orphan risk costs drive the decision on blocksize, as this would be catastrophic for the network and effectively be game over.

"For example, miners could "collude" to form a soft limit"

Cartels are only effective in certain industry conditions. In a highly distributed or competitive system, the incentive would be to defect from the cartel. I want to ensure the network is strong for as many industry structures as possible.


"Particularly at this point in Bitcoin's development? Wouldn't it be better to drive adoption and encourage more transactions for now?"

Agreed. This is why I have supported a blocksize increase to anything less than 10MB for years.

However I am very strongly opposed to a hardfork without strong consensus. To me (and I believe the economic majority) this issue is much much more important than the blocksize issue and goes right to the core of Bitcoins unique value proposition. It is clear you don't agree, all I ask is that you respect those who do have this view.

 

[Dusty]

orphan risk costs are higher (comparatively speaking) for smaller miners, since they need to propagate to a larger proportion of the network

I can't understand what you state here: why a small miner has to "propagate to a larger proportion of the network"? How do you define this proportion? The proportion of the network to relay a new block is always everybody except the one discovering the block.

Also, to rapidly propagate a block you need to have good internet connectivity and a lot of connections, and that's easy and cheap for everyone (big or small miners): a VPS doing the relay to hundreds or thousands of nodes has a negligibly cost and it's affordable also to home-miners. As stated by Peter the only advantage by very big miners is the possibility to solve more than one block in a row and has nothing to do with block time propagation.

@Mengerian

before the block subsidy drops too low

I would like to add to your good post that there is not a definition of "too high" or "too low" in Bitcoin since everything is relative and autoscaled: is 1PetaHash or 1ExaHash too much or to little hashing power? Is 5 btc or 50 btc per block too much or too low subsidy?

The answer is that the hashing power on the network is always has high as the network and Bitcoin value (in $) it can afford, no more, no less.
If subsidy+fees drops then miners leave the network, difficulty drops and the others become profitable, if Bitcoin value rises it can compensates lower fees per block and so on: there is no such a thing like "not enough hashing" because the hashing power is always in line with the value of the network.

 

[jonny1000]

"The proportion of the network to relay a new block is always everybody except the one discovering the block."

Yes, that is what I mean.


* If a pool has 50% of the hashrate they only need to propagate to 50%

* If a pool has 1% of the hashrate they need to propagate to 99%

99% > > 50%

 

[sickpig]

It is clear you don't agree, all I ask is that you respect those who do have this view.

I spent a lot of time on this forum, more than I'm willing to admit, and I rarely see disrespect from any major contributors.

Specifically I don't see any in the argumentation you're having here with @Peter R and @Mengerian from both part.

That said I'm glad to see this kind of exchanges, that means we are not living in a echo chamber and the forum is healthy.

 

[Peter R]

I was pointing out your false claim of a contradiction in the criticism "Maxwell and Co" have in response to your paper. I explained its not a contradiction. You them go on to refute the points. I appreciate you disagree with them. However the claim you make about the contradiction is false, please withdraw that claim.

It is a contradiction. That group was claiming that miners do not suffer from block size-related orphaning risk due to Corallo's Relay Network; they argued that producing a larger block does not increase a miner's orphaning risk and thus my fee market paper was "fundamentally flawed."

The contradiction was when they simultaneously argued that the network couldn't support larger blocks because it would increase miners' orphaning rates to unacceptable levels.

By the way, I don't think you ever made that contradiction; I didn't mean to include you as part of "Greg and Co." I think you agree that block size related orphaning risk is real. I think my disagreement with you is related to whether or not fees absent a protocol-enforced limit can contribute to network security. I think I've convincingly demonstrated this in my subchains paper but you seem to disagree.

"How does relying on orphan risk to limit the block size increase orphan risk itself?"

Because blocks are larger, the sizes of the blocks are pushed right to the limit to maximize revenue, therefore propagation risks increase. Most of your later comments ignore this point.

But this is the mode we've been operating under until a few months ago when we started hitting the limit. And the entire time, orphan rates were around 1-2%. My model in fact assumes that "blocks will be pushed right to the limit to maximize revenue," however I don't see how you can infer what the actual orphan rate will be in such a case. According to my model, it would depend on how many high-fee paying transactions were available in the miner's mempool. Personally, I don't imagine we'll ever see orphan rates north of 10% (and even that sounds extreme). Miners don't want to lose their block rewards.

"Firstly, this doesn't matter until the block reward begins to phase out in a few decades."

The block reward is already 75% phased out. In general, I am concerned with the long term health of the network and look decades ahead. I think its important that people with this long term outlook are influential in Bitcoin development, to ensure we have sustainable growth. If you are concerned with very short term issues, I am simply not that interested, sorry.

I explained why it wasn't a long term problem either. But yes, I think right now while we have a significant block reward to help pay for security we should be doing our best to increase adoption so that we end up with a larger pool of users that can contribute to security in the future when the block reward is smaller.

"I showed in my subchains paper how orphan risk can greatly be reduced without a corresponding reduction in fee revenue"

I read the paper at the time, all I saw was ideas reducing orphan risks. I never saw anywhere, even after asking you to point it out, where it mentioned not having an impact of smaller fee revenue.

I discuss this in the penultimate paragraph of the introduction and in Sections 3 and 4. It is related to the diagram I posted earlier.

 

[bluemoon]

It's simple: presently, big miners are in control of the hashrate, but also, to an important degree, they are in control of the code, indirectly via Blockstream-core. Having a degree of control over the code protects big miner investment. For example, miners behind the Great Firewall need to protect themselves from bandwidth disadvantage. And big miners want to avoid complications with forks / alternative implementations / disruption / uncertainty. In both cases, Blockstream delivers. Meanwhile, BS need to make money for themselves, so they build their consultancy and proprietary software, leveraging both with the advantage of having direct control of the reference code. Normally this would not happen in an open-source environment, but in this case it does, as the code that prevails is the one that is backed up by the hashrate.

With their interests thus aligned, BS and the miners negotiate which changes to introduce, in exchange for what, under what timetable, etc., with both expecting to gain advantage or profit.

I'm not sure miner and BS interests are aligned.

By engaging in cartel behaviours, by restricting the blocksize, and by embracing SW for LN and its competitors, miners are letting the entire bitcoin economy move off-chain and/or out of the bitcoin eco-system altogether, with all the implications that has for bitcoin's value and the value of the miners' block rewards and mining equipment. In doing so they are giving up not only their exclusive rights to transaction fees (which seem to be the means by which they hope to profit from all this), but also their control of the eco-system code and the security given them by their control of the eco-system hashrate.

BS hope to pick up as much as they can of what the miners drop: that is the extent of their interest in the miners.

 

[jonny1000]

I spent a lot of time on this forum, more than I'm willing to admit, and I rarely see disrespect from any major contributors.

I am talking principally about advocating conducting the hardfork (in particular Classic or XT), without strong consensus.

 

[Dusty]

* If a pool has 50% of the hashrate they only need to propagate to 50%
* If a pool has 1% of the hashrate they need to propagate to 99%

If there are 10 miners and you find a block you have to relay it to the other nine, and the time to do it is the same whether you have 1% or 99% of the hash rate.

 

[jonny1000]

"If there are 10 miners and you find a block you have to relay it to the other nine, and the time to do it is the same whether you have 1% or 99% of the hash rate."

The percentage hashpower is clearly the most important and relevant measure, when calculating orphan risk. Also this compliments the selfish mining attack.

 

[Dusty]

The percentage hashpower is clearly the most important and relevant measure, when calculating orphan risk

Then it's either that, or this:

since they need to propagate to a larger proportion of the network

What I'm trying to show you is that if you say that the most important and relevant measure is the hashing rate, then the fact that "they need to propagate to a larger proportion of the network", is not true. They have to propagate to the same proportion of the network.
Also, assuming a central network where all miners are connected (like the relay network) where sufficient bandwidth enables concurrent upload to all the peers, the propagation time is not directly dependent on the number of miners but from the block size.

 

[sickpig]

I am talking principally about advocating conducting the hardfork (in particular Classic or XT), without strong consensus.

Endorsing an idea as a sign of disrespect? I'm getting it right or am I misinterpreting your words?

 

[Zangelbert Bingledack]

I don't understand what is meant by wasted work. Hashing is by design "wasted" work. Orphans resulting in additional waste would only seem to increase the effective difficulty, which auto-adjusts anyway.

If the argument is that this burden falls disproportionately on smaller or less connected miners, that is a separate argument that doesn't seem to warrant using the term "wasted work."

 

[yrral86]

Then it's either that, or this:

What I'm trying to show you is that if you say that the most important and relevant measure is the hashing rate, then the fact that "they need to propagate to a larger proportion of the network", is not true. They have to propagate to the same proportion of the network.
Also, assuming a central network where all miners are connected (like the relay network) where sufficient bandwidth enables concurrent upload to all the peers, the propagation time is not directly dependent on the number of miners but from the block size.

The hash rate matters in a race condition. Getting your block to the miners with more hash power first is critical to win the race and not become the orphan.

 

[Roger_Murdock]

I don't understand what is meant by wasted work. Hashing is by design "wasted" work. Orphans resulting in additional waste would only seem to increase the effective difficulty, which auto-adjusts anyway.

If the argument is that this burden falls disproportionately on smaller or less connected miners, that is a separate argument that doesn't seem to warrant using the term "wasted work."

I'm guessing this is related to the (mistaken in my view) idea that hash power spent producing orphaned blocks doesn't contribute to security. We discussed it here a few months ago. Here were my thoughts:

Here is my thought process. All fees incentivize hashing. And all hashing contributes to security. Because the level of security is really just the cost of a 51% attack, no? Now you might think, well, to the extent that hashing power spent producing orphaned blocks "could have" been spent creating un-orphaned blocks, orphaning is associated with a reduction in difficulty. And lower difficulty means that it would be less expensive to acquire the necessary hardware for a 51% attack, no? (The attacker can make his attack blocks lean and mean so that they're not subject to the same orphan risk as honest miners. Or to think about it another way, when a good chunk of the network's hashing power is "diverted" to orphaned blocks, an attacker would seem to need less than 51% of the network's total hashing power for an attack.) But making small blocks when there are lots of fee-paying transactions to be had (the whole reason that other miners are bearing the risk of orphaning and making larger blocks) is itself a kind of cost. Furthermore, honest miners would have an easier time responding to a lean-block 51% attack by themselves making smaller blocks to counter it. (They essentially have extra hash power in reserve that they could draw on.) So no, I don't see how orphaning risk reduces PoW security in any real meaningful way.

 

[79b79aa8]

I am talking principally about advocating conducting the hardfork (in particular Classic or XT), without strong consensus.

I should think many here have come to the conclusion that 'strong consensus' is synonymous for advocating the status quo while simultaneously making arguably desirable proposals for change appear uncivil. In this sense, 'strong consensus' is to be viewed as a suicide pact. It makes growth and adaptation impossible and makes the system vulnerable to capture.

In the space as we know it to be, unruly and full of competing interests, do you think there can be a different sense of 'strong consensus'? What is it?

 

[cypherdoc]

The hash rate matters in a race condition. Getting your block to the miners with more hash power first is critical to win the race and not become the orphan.

contrary to popular opinion, the relay network is just as useful to small miners as it is to large miners in terms of reducing orphans. they can just as easily DL the software and connect to level the playing field against large miners. in fact, i've read that it was designed for this purpose.

furthermore, if you throw in SPV mining and XThins and the speedups they cause, along with head-first mining, it all becomes more muddy making the "big blocks cause centralization" argument FUD.
[doublepost=1463578526,1463577795][/doublepost]this is wut i be talkin bout:

[doublepost=1463578751][/doublepost]c'mon, c'mon, c'mon:

 

[bluemoon]

On r/btc 165 users are getting depressed by bitcoin's struggle to survive and the inroads ethereum is making in the face of Blockstream's endless prevarications and inaction.

Meanwhile on r/bitcoin 420 users bask in the glow of wall to wall feelgood stories and can be confident all is well with the world.

 

[cypherdoc]

“On another topic, I remember when I first released my transaction fee market paper, Maxwell and Co. said that orphaning wasn't a deterrent against larger blocks because miners use Corallo's Relay Network and thus don't suffer block-size-dependent orphaning risk (and then later they said that we can't have bigger blocks because orphaning risk would be too high blah blah blah but let's ignore that contradiction for now).”


Dear Peter R


I have discussed this issue with you many times. That is a mischaracterisation of the criticism of your paper. It is both true that higher orphan risk probably won’t be a deterrent for larger blocks and ***IF*** it was that would have potentially catastrophic consequences on the network. These things are both true at the same time, it is not a contradiction.


Higher orphan risk probably will not be a significant deterrent to larger blocks due to Matt’s relay network and other technologies like thin blocks. If this technology proves ineffective or insufficient, then relying on orphan risk as a tool to keep blocks small and drive the fee market is a terrible idea for the following reasons:


· It increases orphan risk, which should be minimized for many reasons (for example “wasted work” which I had to explain to you). A healthy network has lower orphan risk

· It ensures orphan risk is high relative to fee revenue

· Mining centralisation is locked in, since orphan risk costs are higher (comparatively speaking) for smaller miners, since they need to propagate to a larger proportion of the network

· If mining incentives and fees are driven by orphan risk cost, there may be insufficient subsidy carrying over to finance hashing, which may result in a lower equilibrium difficulty.


Many thanks

Jon

given that the RL, Xthins, SPV mining, equal internet access, and headers first mining presumably levels the playing field btwn large and small miners and especially given that all miners, large or small, can construct block sizes according to their own needs (transmission efficiency) and to defend against spam, your presumption that big blocks (higher limit or even no limit) lead to catastrophic problems with the network is invalid.

 

[cypherdoc]

"The proportion of the network to relay a new block is always everybody except the one discovering the block."

Yes, that is what I mean.


* If a pool has 50% of the hashrate they only need to propagate to 50%

* If a pool has 1% of the hashrate they need to propagate to 99%

99% > > 50%

i think you're blind to the fact that by keeping the limit at 1MB, you're allowing the Chinese miners to maintain their cartel-like centralized advantage in hashing rate which is hobbling Bitcoin at this time. Western miners need to be able to leverage their advantage of superior BW to compete by producing larger blocks. Westerners have plenty of money to produce/buy similar hashing power but can't/won't b/c of the rigid uncompromising 1MB policy of core dev. that's stupid.
[doublepost=1463589049,1463588273][/doublepost]

It is a contradiction. That group was claiming that miners do not suffer from block size-related orphaning risk due to Corallo's Relay Network; they argued that producing a larger block does not increase a miner's orphaning risk and thus my fee market paper was "fundamentally flawed."

The contradiction was when they simultaneously argued that the network couldn't support larger blocks because it would increase miners' orphaning rates to unacceptable levels.

yes, you're right Peter.

and i remember very vocally pointing that out several months ago.
[doublepost=1463589338][/doublepost]

I'm not sure miner and BS interests are aligned.

By engaging in cartel behaviours, by restricting the blocksize, and by embracing SW for LN and its competitors, miners are letting the entire bitcoin economy move off-chain and/or out of the bitcoin eco-system altogether, with all the implications that has for bitcoin's value and the value of the miners' block rewards and mining equipment. In doing so they are giving up not only their exclusive rights to transaction fees (which seem to be the means by which they hope to profit from all this), but also their control of the eco-system code and the security given them by their control of the eco-system hashrate.

BS hope to pick up as much as they can of what the miners drop: that is the extent of their interest in the miners.

yes, it is crazy behavior to say the least. must be a Stockholm Syndrome or some such capture.

The Halvening is looking more and more like the breaking event which will force them to come to their senses.
[doublepost=1463589741][/doublepost]

I am talking principally about advocating conducting the hardfork (in particular Classic or XT), without strong consensus.

unfortunately that is what is required at this late stage of the game. we have to break the back of the cartel core dev has created by maintaining the unfair and economically ignorant 1MB cap. yes, "most ppl investing in cryptocurrency will lose money" and that includes Blockstream. it's quite evident who benefits from this; all the for-profit businesses that have been built up around offchain solns. contrast that with all of us in the bigger limit camp who simply want to see growth of Bitcoin as an ecash. yes, our COI, if you can call it that, is to see elevation of the price that would surely come from that as Bitcoin swallows up a significant chunk of the Forex market as it becomes a sound money global currency. it's not sexy from a coding perspective but it is damn sexy as an entrepreneur/investor. but that is what Satoshi's Original Vision was and has always been. how many references to removing the limit did he write about? lots.