Bitcoin Forum

What would happen if there were an organized strike of miners, lets say demanding higher prices or more transaction fees?

Could this happen? I think it can.
If the strike is chosen to happen after the next difficulty adjustment and 90% of all miner participate conformations would take ten times as much, 99% 100 times and so on. How I understand it there would be no motive for defecting in such an effort except loss of their regular income. The more miners participate the more effective the strike would be and the longer can it last. With a wide support the network could certainly become compromised.

Since in the current situation profits from mining are nearly non-existent such the motivation to defect is very small. I realize such an effort could be harmful to the public perception of bitcoin and even crash the price even further. On the other hand, miners would be 'forced' to come back at the next difficulty adjustment and would even get some kind of reward for the effort because of lower next difficulty.

I think this is a serious possibility, and if you mine bitcoins you should think about whenever you would participate. I am not calling for action right now, I'm just wanting to put the idea out there and learn what people think...

AFAIK, the miners are working for the block subsidy, right now 50 BTC.  If profit isn't there, difficulty will go down until it reaches an equilibrium.

Yes but the difficulty cannot go down until the next adjustment, so the strike could only last as long at it would take. Since this is dependent on found blocks it makes this hypothetical situation effective.

There would never be a miner strike.  That is the great power of decentralized network.

Say in 2030 there are no more block rewards all compensation comes from transaction fees.  Lets say on average 7BTC per minute.  That means the average block would have 70 BTC in transaction fees.

Now hypothetically if 50% of miners went on strike then average block would take 20 minutes or 140 BTC in fees.
75% on strike = 40 minute block or 280 BTC in fees.
90% on strike = 60 minute block or 700 BTC in fees.
99% on strike = 600 minute block or 7000 BTC in fees.

The more who went on strike the more profitable it becomes to not strike. The game theory solution is to encourage others to strike and then secretly mine (as massively inflated profits).

Without a Union you couldn't enforce the strike and you can't have a functional Union without governmental support/backing.

There is a limit of how much can be put in a block, so while the defecting miners could be sure to get the most paying transactions if even those are too less it makes it profitable again to strike. So since the defectors cannot put all transactions in a block there is a certain equilibrium on where a strike could be attempted.

And I think, in current situation a strike would be profitable since there are almost zero transaction fees so no reward for defecting and the most pools keep them anyway.

oh, false.
As highest paying transactions would be included always in the block miners are mining on the amount of income earned is exactly the same for a defector as during regular mining. The block finder gets all the profits from it, and since everybody only includes the highest transactions in progress which fit in a block everybody should mine on the same block.

I think I've struck something here ;)

If miners don't like the exchange rate, they just need to stop selling their Bitcoins. As soon as that happens, the prices will go up. No strike necessary.

My thesis is that these are old coins either directly from early miners or from people who bought them from them. Anyway I'm not suggesting a strike but merely want to discuss the viability / possibility of that happening.

Miners demanding higher prices would be kind of pointless since the market determines it. And many old coins are still hoarded so the price will drop more as people with a large stack get the fear of getting left behind.
But miners demanding that people include more transaction fees would make very much sense.

Why would the vast majority all decide at once that they were dissatisfied with the price? In reality some will and will either stop mining or stop selling and they will have an effect and the effect is to make it more profitable for others to either mine or sell.

This is the funnest thing in BTC world.

Miners are both Workers and Capitalists,

you know, Capitalists can't strike.  ;D

Expect everybody who owns BTC and/or simply cares about the system to start mining with everything they got (regardless of their electricity cost).

I wouldn't be too concerned about a mining strike.

A sudden, sharp drop of miners could make block solving a very time consuming process. Since AFAIK it's the number of solved blocks that count down for the next adjustment, not time, this could postpone the next adjustment considerably.

Not gonna happen, though.

Exactly.


Why?
Because people's reaction in this thread?

I don't really get the arguments, as I said miners would be automatically partially compensated by the network because of the difficulty adjustment when they are forced to come back. Any other person jumping in doesn't make any sense, he would be mining regardless and since the strike would happen directly after an adjustment he can't profit as miners will come back next adjustment. The only thing which could be accomplished by a defector is compromising the effectiveness and the duration of the strike.

And if you think this idea is dumb, gfto, and don't get hit by the door.

Will not happen because the idea is stupid.

If miners want higher transaction fees, they can already "work to rule" like the Eligius pool (http://eligius.st/wiki/index.php/Eligius:About) which only processes fee-paying transactions. If 90% of miners did that, fee-paying transaction would still be processed after about 10 minutes, while the free-riders would have to wait nearly 2 hours. Meanwhile, the "work to rule" miners would still get the block-reward, even if not processing any transactions.

A stike that attempts to raise prices by restricting supply would be self-defeating. Bitcoin prices rely on the perceived value of bitcoin. That value would be undermined by a widespread miner strike slowing transactions to a crawl. Talk of a miner strike reafirms my position that I eventually need to have (possibly power-hungry) mining capacity on "hot standby" in case of a perceived attack on the network: including a miners strike. In fact, a miners strike would look exactly like a whidespread DDOS attack.

They wouldn't get very much, because as soon as the difficulty drops (assuming the price stays the same), mining would be more profitable and therefore they'd have to share the reward of the lower difficulty with more people (more inefficient miners).

Oh it does make sense for people to start mining at a loss when they see their business relying on Bitcoin or their investment endangered. You rely on the assumption that people only act due to immediate reward, but the longer term reward of protecting the Bitcoin network makes it completely rational for one to start mining in order to secure the network.

Also the risk of endangering their own investment in mining equipment makes a large-scale strike very unlikely - it would be shooting yourself in the foot for very little possible gain.

I see this as the most plausible scenario:

"- Let's all strike!"*
"- Yeah!"*
"- Sure!"*
"- Count me in!"*

*secretly creates a new username and continues mining :)

There is no requirement for miners to include free transactions (or any specific transaction).

Wouldn't simply getting your pool to only accept transactions w/ fees about a certain amount make more sense?

Damn you people are retarded.