Yeah, it is weird .

Basically, the best strategy depends on what everyone else is doing.  However, that depends on the best strategy, so there is a loop.

So, lets assume that everyone mines one of the top-2 blocks, 50% always mine the highest block with the highest fees and 50% mine the highest fee block of the top-2.

There is a large transaction included in the top block, say fee of 100 coins.

If you mine the top block, you get 25 coins, if you win (standard miner reward).  Also, since the highest transaction is now 2 behind, everyone will stay on your block.

However, if you mine the 2nd highest and get it, you will win 125 coins, but only if the block is then built upon.  You help this by setting your fee to 0.1 coin (i.e. slightly above the best so far), so all the top-builders switch to you.

Once you win, then there will be 50% mining your block and 50% continuing with the 2nd highest block.  That gives a 50% chance that you win the full 125 (if one of the top miners wins the next block) and 50% chance someone else will replace your block.

So, on average you will win 62.5 by mining the 2nd highest block and 25 by mining the top block.

Thus most will mine the 2nd highest block.

If x mine the 2nd highest and (1-x) mine the highest, then

Option 1: mine the 2nd highest and win
- (1-x) you win full reward (125)
- x you win nothing (since someone else adds a block with 0.01 above your fee)

You win (1-x) * 125

Option 2: mine the highest and win
- 25

For balance, both must be equal, or people will switch strategy to the better one, so

(1 - x) * 125 = 25

x = 0.8

Therefore, 80% will mine the 2nd highest block and 20% will mine the top block.

Have we had anyone from Coinbase/hear from Coinbase about this issue? I have emailed and submitted tickets, and I have received no feedback at all.

That contradicts yourself.  If miners decide on the basis of rollover payments, then they may decide to mine against the older blocks, esp if there is a large fee for some of the transactions into those blocks.

If they solve it before the next block is found and offer a larger fee, then many miners will then switch to their block. 

The algorithm could be, try to add to the longest chain and if a tie, add to the block which pays the largest to "true".  You might have difficulty getting the new block propagated, but if there is a small number of mining pools, you could send it to them directly and get most of the mining power.

There is a tradeoff, mining earlier blocks lets you get more tx fees.  However, there is a risk the rest of the network will have moved on by the time you solved it.


The transaction fee pays into the block.  If you include a transaction, you can direct the funds to the coinbase transaction.  The output of the coinbase transaction can be anything the miner wants.  If he leaves some funds pay to "true", then it is the same as offering a tx fee to whoever adds the next block.  However, they only get it if their block sticks.

If you dont like something i have said you can take that up with me personally by PM me we can discus any problems that you may have with me or my post.   

No, you are right.  I skipped a step or something.

[edit]

or maybe, it is still reasonable.

The idea would be that it allows a miner to give fees to the next miner.  In effect, if he includes a transaction in the block which pays to "true", then whoever solves the next block can redirect it to themselves.

So, if someone pays a large tx fee, then the miner has an incentive to leave some for the next miners.  If he doesn't they will keep mining against the previous block.

But the miner has first call. 

If he transfers the coin to his own address, the only way to get that coin from him is to keep mining the previous block.

However, if the reward was high enough, it might be worth it. 

There could be a large number of forks, but only for 1 block.  However, if the winner only takes some of the reward, then there is less of an incentive.

If people spend to long on that one block, then someone else might be able to get 2-3 blocks all at once.

Hey Seals, there's a typo in your second affiliate banner.  It says "EXTREMLY LOW RAKE" (vice Extremely).

But even if we adjust the difficulty every block, that doesn't mean it has to be calculated solely with respect to the previous block. As someone else said upthread, you could keep a moving average of, say the last 200 blocks. That would smooth things out.

But I can see the OPs proposal being a serious pain in the arse for miners (of whom I am one). As it is, you have to keep reassessing every two weeks or so, whether it is still profitable to mine. If the difficulty (and hence, payout on a share in a pool) changes every block that would make it a bit of a nightmare to calculate profitability. The incentive to mine would be reduced, and without miners Bitcoin can't work.

Hijiack: What I *do* think would have been a good idea would be for the block rewards to have decayed more smoothly, say every month instead of every four years. Then again, the sky didn't appear to fall last December, not even with those pesky Mayans egging it on.

So basically, if I lived in Venezuela, and had 100K Bolivars on my account, they were suddenly worth 32% less ? Damn.. I would be so mad.

I tried it for the first time a couple of days ago.

I followed the instructions to send 0.4239 BTC to some address. Some time later I got a confirmation that the funds were received. The message said "You should now wait to receive a third email, which provides instructions from your carrier in order to credit your mobile phone. This email may take up to a few hours to receive."

I didn't receive the follow-up email or the credit on my phone after 24 hours. They've ignored a follow-up email as well as a message I sent from the contact form on their web site.

At best, they're disorganized and their customer support sucks. At worst, it's a scam.

I've already decided that I won't use them again. I'm interested in hearing if anyone else has successfully gotten credit.