Slight nuance. Asymptotic means tends towards the asymptote. It doesn't mean it will achieve asymptote value.

$2 for power a day seems little low, the rest is sound. You can expect the difficulty rises to calm down if the price doesn't go up 2 weeks from now.

The pool, who else? The header is created with the pool's address.

That's some insane electricity price you got there, are you sure it's not 0.09 USD/kWh?

This is why it would be better to come up with a class independent of bitcoind, that will create the block header and provide the work on its own. This prevents modifications to the core elements while it allows to:

1) Skip bitcoind entirely for pool miners as it is done right now. Keeping things simple is always a plus. It also ensures miners aren't nodes in the network, as it is now.
2) Simply have the miners getwork() from that class, let's say as a COM object. Then as said before, the class can determine pool version and outright bypass its main functions if it is dealing with a classic pool, or provide the work as a modded pool would need it to. This allows miner developers to easily implement the change, while keeping it independent from further improvement related to pure number crunching.

You forget the increasing difficulty. There's no guaranty that the actual price to difficulty ratio will be maintained. If anything logic dictates that this ratio tends toward smaller and smaller profit margins, as people compete over the network.

You'd be feeding that work to yourself. The public key and difficulty are broadcasted by the pool.

Anyone can modify the code, but no one has the guaranty that the user base will update to their modified code. And what concurrence does Bitcoin have? A rule cannot exist without force to apply it. Policy makers hold that authority over their respective currency and economy because they have the full force of their government to back their decisions. Bitcoin is impervious to these forces, so how are they to be considered exactly?


That pattern is finite. At 21 million coins, no more minting.

You say you want to prune the chain? How would you deal with lost coins then? Do you intent to simply replicate old transactions in newer blocks? Wouldn't that hinder the demurrage fee calculation? The light weight client will eventually see the day so I don't think the whole block chain download will remain a problem in the mid term. The only reason a person with 50 BTC imposes less on the network than someone with 400k BTC is the flat fee. Reflecting volume on the fee would help against that in a better fashion imo.

From my understanding, spread out long term holdings will still have a small impact compared to live, broken down transactions constantly creating new coins to pay for odds amounts. I agree that "traders" are already paying for that service, but so have hoarders. Technologically, the spot these people have "purchased" in the block chain doesn't require further maintenance. The idea of demurrage has been brought up as an alternative to lacking fees, but I think the very concept of "simulated maintenance fee " vs actual maintenance costs needs a thread on its own before we can really figure out where to go with demurrage.

At any rate, we can't establish now that fees won't be reward enough to maintain adequate security in a few decades from today. Miners already have control over transaction inclusion, I think it is wiser to first wait for a tangible hint of whether or not the market can maintain high security naturally before we talk of modding the source.

How is that an issue?

The block chain secures the network. But it doesn't HAVE to be used to trade, it's merely the main frame. If you enforce rules on the block chain that people regard as unfair, they will naturally stray away from it, using escrows or key swapping to trade instead, and that will reduce the traffic on the block chain, thus reducing miners' fee, and reducing the security overall. As it stands, use of the block chain is voluntary, so you can't go around pushing rules on it.


You miss the point. Right now whether I pay .20 BTC or 20 BTC, I'm paying the same fee. Fee is based on transaction size, not volume. What is charged is the amount of data that needs to be added to the block chain for the transaction to take place. That is of course logic. But if you feel you need to modulate fees based on another criteria than block chain load because the payout is too low, then I say let things settle naturally and watch miners charge fees based on volume too.

My point still stands, flat fees always hurt small trades. Once again that will push people towards escrows, who will offer cheaper transfers while not paying a cent to the miners.


I do not think time of entry is a legitimate cause for higher fees. You people are presenting hoarders as some sort of free loaders on the economy that only take and don't give anything in return... The network has grown to what it is thanks to long time holders. Not thanks to miners, not thanks to speculators, but thanks to long time investors alone, who took a chance and invested into Bitcoins. You are offering to chastise these people for the very action that bears the economy.



Maybe you should take a little more time in reading the people you refer to. Traders are the ones making the block chain heavier, certainly not hoarders.

Nevertheless, the whole idea that hoarders just sit on their money and NEVER participate in the economy is preposterous.

No it won't. You'll simply sit on a coin with capped fee and swap the private keys around, enjoying lower fees on your everyday spending wallet. Overall this will reduce network security long term, because it forces people to design ways to altogether avoid the block chain.



What discourages transactions is trying to buy a cup of coffee for 20 cents with 1 cents fee when you could buy 100 of them for 20 BTC, with the same 1 cent fee.


Traders are the ones who use the system intensively, somehow they should pay less for a service they use the most?

a) No problem.

b) Still not a problem. If you can establish enough trust between traders to swap around private keys, you already have enough information to calculate the demurrage on the coin anyways. If I've got a 100 BTC coin with 2 BTC demurrage on it, then ima trade it as a 98 BTC face value coin, and as long as this coin is widely accepted, everyone in the process can skip the demurrage fee. I'm seeing talks of some long term cap on the maximum demurrage fee, once you got a coin that hit the cap, you certainly have no interest whatsoever in spending it through the block chain anymore if you can find someone that'll take the private key instead.


I don't think it's that simple. My understanding is that demurrage will naturally impact on fees. Miners can and will charge lower fees for "live" coins since they have some sort of "guaranteed" profit through old coins. This is shifting a larger amount of the network cost on long time holders, who by definition have a low motivation to trade their coins. I don't think it's a good idea to lower their trading incentive even more.

This system shouldn't have demurrage because your coins are safe in your wallet. They are exposed when you trade them. The analogy with gold stands in that it costs much less to hold on your gold in some safe place than to move it around. You want hoarders to participate to network fees, then have the fees scale based on tx size AND volume. I move more BTC around, I pay more.

Don't mod bitcoind. Build in a class that your miner will getwork() from. Have some simple pool type detection code. If the pool is classic, the class will bypass its main functions and just deal directly with the pool. If the pool is modded, the class will request the getwork() off of localhost bitcoind with the pool's address, and then upload whatever data it needs to to the pool.

This way both bitcoind and number crunching side of miners will remain untouched. No need for several versions of the same miner either.

If Bitcoin remains a simple store of value, speculation over it's exchange rate will maintain a decent level of transactions. At the same time, anyone who needs to realize his profit will have to exit out of BTC. Same goes for hoarders. Unless you support the deflationary spiral baloney where hoarders just hold onto their coins forever.

If Bitcoin has a vendor base, then this problem is moot. What do you think vendors will rather support? 1% fee taken off of their profit to sell in Bitcoin, or the 4-7% credit card companies charge to use mainstream banking? Don't you think vendors would be naturally attracted to Bitcoin since the low fee and reduced intermediaries allows them to beat their concurrence?

BTC is a far superior currency than the mainstream fiat is, so it deserves a higher tx fee. But let's assume the fee has to remain in line with fiat txs, then we still have a huge margin in front of us, since it seems you are grossly underestimating the transaction fees and delays imposed by that system.

Lastly, the market will simply adjust one way or another. Include demurage and miners will lower their fees, while hoarders will counter it with private key trading.

Sure that too.

What about a .conf file capability added to bitcoind that allows to script TX inclusion rules. It doesn't even have to be added to bitcoind. Let's say you add a class that the miner calls, which will include TX according to the .conf file rule, then call the core bitcoin API to create the block header. Then a pool operator can propagate these to his clients, assuming most users won't just be douches and ignore it, since it is directly related to their profits in the long term.

Also, doesn't the network already order the TX by fee? The system described here implies the miners have to inform the pool of the TX they are including, by ID to save bandwidth obviously. The ID linking means the miners are referring to the network propagated list of pending TX, which, if they are ordered by fee, will smooth this whole system a lot.

I don't get what all the excitement is about. A coin that is held on for a long time is a coin that is not part of the market. As such, it increases the value of all the coins that are effectively in circulation. The logic behind hoarding is that the coins keep on valuating so they should be held on for as long as possible. And that on its own helps valuate the each other BTC in circulation even more. So stop panicking already.

Also that demurage idea is worthless. You impose that on me and ima make myself some nice and tidy stacks of 100 BTC per private key and just trade the keys directly while I fill in the smaller amounts with coins from a spending account which are freshly traded...

Or assuming most people will integrate the totality of available transactions, send in the IDs of the ones that are not integrated, saves Bandwitdh and memory server side.

Free market doesn't stop people from acting in groups. There is a direct correlation between mining profitability and difficulty. It is not impossible, although admittedly hard, for a a majority of Bitcoin users to come to a consensus on how high a fee they're willing to pay. A group that big could manipulate difficulty. Think of it as consumer union, with their own modded client to adjust fees automatically to whatever they vote it to be. I don't think that's a good thing though.