Do miners have to use the UTXO pool

[Jet Cash]

Do miners have to use the UTXO pool?

Is it possible for miners to populate a new block they have found with their own text messages, and not use any payment transactions?

[DannyHamilton]

Do miners have to use the UTXO pool?

No. But they take a significant risk that their block will be orphaned if they don't validate all the transactions in every block that they receive from peers.

Is it possible for miners to populate a new block they have found with their own text messages, and not use any payment transactions?

Well, you've got that backwards.  The miner (or pool) populates the block first, then they find the solution to the block.  A block solution is only valid for the specific list of transactions in the block in that specific order.

Regardless of that error, the only transaction that a block is required to have is the generation transaction that pays the block reward to the miner (or pool).  They aren't required to include any other transactions at all if they don't want to.  Since the generation transaction is created by them, and doesn't spend any unspent outputs, the miner (or pool) doesn't necessarily need the UTXO if they are only going to include that single transaction.

Of course, they won't get any of the transaction fees from all those transactions in the UTXO since they won't be including them in their block.  Those transaction fees are the incentive to the miner to track the UTXO and confirm transactions.

Additionally, if they don't maintain their UTXO, then they'll find it difficult to validate all the transactions in the block that they receive from peers.  This means that an attacker can feed them a block with an invalid transaction, and they won't realize it.  They (and other miners like them) will all be building on an invalid fork while those miners that do track the UTXO and do validate transactions build on a valid fork.  The miners that don't track the UTXO will be wasting their time, energy, and money hashing away and never getting rewarded for it until they realize that they are on the wrong fork and switch back to the right one. Since mining tends often to have a very slim profit margin, this cost and temporary loss of revenue could be devastating. Depending on how much time they spend on the wrong fork, it could take a very long time to recover those losses.

[Jet Cash]

Thanks for that explanation.

My thought was that the miner could sell the transaction space privately for more than he would get in fees. He could then add the block with these transactions to the chain. A 2Mb block would double his revenue (from the transactions).

This may become popular if block rewards halve a few more times.

[DannyHamilton]

Thanks for that explanation.

My thought was that the miner could sell the transaction space privately for more than he would get in fees.

He could then add the block with these transactions to the chain.

Absolutely.  My assumption is that eventually large businesses will sign contracts with mining organizations to prioritize their transactions for a monthly cost.

A 2Mb block would double his revenue (from the transactions).

The miner can't increase the size of the block unless the entire network (all users, peers, nodes, pools, and solo miners) supports the larger block size. So, while he can prioritize the transactions that he chooses based on the payment he receives for those transactions (regardless of whether that payment is made with fees in the transaction or private payment), he is still currently limited to 1 MB for the block size.

This may become popular if block rewards halve a few more times.

Yes.  The block subsidy will halve approximately every 4 years, so in 8 or 12 years the subsidy will be down to 3.125 or 1.5625 BTC per block.  The fees (and other revenue sources) are likely to become a much larger percentage of the revenue earned by miners (and pools) and therefore will have a much larger influence over the decisions that the miner (or pool) makes.

[Jet Cash]

So what's to stop a miner setting up a global public records service, and take money from customers to add records to the Bitcoin Blockchain. He gets the mining reward as well as the revenue from the business. Apart from the initial cost of mining, all the maintenance costs are born by the nodes (ie. people like me) for no reward. I'm not sure I'm prepared to accept that. I see Bitcoin as a payments service, not a registrar of births and marriages, or an obituary service for somebody's pet dog. Once that catches on, and it's probably more acceptable to the public than crypto-currency, we'll be up to 50Gb blocks in no time.

[achow101]

So what's to stop a miner setting up a global public records service, and take money from customers to add records to the Bitcoin Blockchain. He gets the mining reward as well as the revenue from the business. Apart from the initial cost of mining, all the maintenance costs are born by the nodes (ie. people like me) for no reward. I'm not sure I'm prepared to accept that. I see Bitcoin as a payments service, not a registrar of births and marriages, or an obituary service for somebody's pet dog. Once that catches on, and it's probably more acceptable to the public than crypto-currency, we'll be up to 50Gb blocks in no time.

There is nothing stopping a miner from doing that. However, considering that that miner would likely need to be a pool operator to get the necessary hash power to produce blocks at a rate to support that business, it probably won't happen. Miners simply wouldn't choose to join that pool so they can't actually do anything. Otherwise the cost to get enough equipment and hash power would be massive.

[OnkelPaul]

Your pet obituary in the blockchain sort of exists already, as far as I know. It's not tied to being a miner at all.
In general, any person could create transactions including any text for others for a fee, and push these transactions to the blockchain.
If the price is right, these transactions will be processed and stored just like any other transactions.
The blockchain is morally indifferent, it does not penalize transactions that you or me don't like, such as pet obituaries, drug or extortion money, donations for political parties that we disagree with.
The only thing that keeps pet obituary spammers from filling up the blocks is the economic reasoning that with a higher transaction pressure, transaction fees tend to become higher, driving out "unimportant" transactions for which the senders were unwilling to pay appropriate fees.

Welcome to a free market, if you like it or not.

Onkel Paul

[Jet Cash]

Well it isn't a free market. It's promoted as a money transfer service. This issue has made me rethink the future of Bitcoin, and whether I should invest time and money in it. I can't see people running full nodes to provide these non-finacial services, reduction in threse nodes can lead to centralisation, and the loss of the Bitcoin ideal. Worse, the bitwoofer services could be running the nodes, and have different ideals for Bitcoin. That's free market pressures. I've come to Bitcoin for the long run, not to scratch a few pennies in the short term. If all that rubbish is allowed to clog up the Bitcoin blockchain, then maybe I should look for a money transfer blockchain.

[piotr_n]

Well it isn't a free market. It's promoted as a money transfer service. This issue has made me rethink the future of Bitcoin, and whether I should invest time and money in it. I can't see people running full nodes to provide these non-finacial services, reduction in threse nodes can lead to centralisation, and the loss of the Bitcoin ideal. Worse, the bitwoofer services could be running the nodes, and have different ideals for Bitcoin. That's free market pressures. I've come to Bitcoin for the long run, not to scratch a few pennies in the short term. If all that rubbish is allowed to clog up the Bitcoin blockchain, then maybe I should look for a money transfer blockchain.

This is the development board, dude - for technical discussions.

Nobody here cares about your politically motivated whining and whether you are going to invest your time and money in Bitcoin.
Stop wasting our time and go back to reddit.

[Jet Cash]

I've never posted on reddit. It's not a political whine either.

I was very enthusiastice about Bitcoin, but this potential developement has made me rethink the position of Bitcoin. The blocksize increase is all over the boards at the moment, if blocks are starting to contain text that is not relevant to money transfer, then blocksize is going to have to increase dramatically to provide storage for these messages. Transaction times will increase and potential users of the money service will start to lose faith, and turn elsewhere. If I am wrong, then please explain why?

I would have though it was a technical discussion, as it involves the possible undercapacity of the UTXO pool.

[cr1776]

So what's to stop a miner setting up a global public records service, and take money from customers to add records to the Bitcoin Blockchain. He gets the mining reward as well as the revenue from the business. Apart from the initial cost of mining, all the maintenance costs are born by the nodes (ie. people like me) for no reward. I'm not sure I'm prepared to accept that. I see Bitcoin as a payments service, not a registrar of births and marriages, or an obituary service for somebody's pet dog. Once that catches on, and it's probably more acceptable to the public than crypto-currency, we'll be up to 50Gb blocks in no time.

You should look at this:

https://en.bitcoin.it/wiki/OP_RETURN


Blocks are not *starting* to contain text, they have been, but there are constraints.

[findftp]

Here, use this:

www.cryptowill.com

You can write 72 char readable messages in the blockchain.
You can even sign them to prove they are yours.

Bye bye twitter...

[piotr_n]

I've never posted on reddit. It's not a political whine either.

I was very enthusiastice about Bitcoin, but this potential developement has made me rethink the position of Bitcoin. The blocksize increase is all over the boards at the moment, if blocks are starting to contain text that is not relevant to money transfer, then blocksize is going to have to increase dramatically to provide storage for these messages. Transaction times will increase and potential users of the money service will start to lose faith, and turn elsewhere. If I am wrong, then please explain why?

I would have though it was a technical discussion, as it involves the possible undercapacity of the UTXO pool.

Whether a transaction makes an actual transfer of funds, or is it just a binary data that you want to preserve/notarize in the decentralized database, either way you need to pay the fee, calculated over the size of the transaction's data.

What is going to prevent people from putting useless blobs of data into the blockchain are the fees.
It makes no economical sense to pay a fee for something you don't need to have in the block chain.
As the block are getting full and the demand for transactions is growing, this in time will make storing a data inside the blockchain more and more expensive.
And this is precisely what will prevent the chain from being stuck with an unnecessary data - the price for doing it.
It is actually working already, though the price of using the blockchain isn't that big yet. Today anyone can afford to store 10KB of data inside the chain, but this will surely not last forever.

[Jet Cash]

As the block are getting full and the demand for transactions is growing, this in time will make storing a data inside the blockchain more and more expensive.

That is my point exactly. The miner getrs the fee for adding therecord to the blockchain. The "advertiser" pays a one time fee for submitting his advert. I (and all other nodes) get nothing from this transaction, but we have to pay in perpetuity for the storage of this record. Maybe it will be neccessary to consider the blockchain and Bitcoin as two separate entitries ( not many people seem to do this at the moment), with a dual fee structure, one for the records, and one for the transfer. Actually shifting transfers into sidechains could achieve this.

[piotr_n]

The miner getrs the fee for adding therecord to the blockchain. The "advertiser" pays a one time fee for submitting his advert. I (and all other nodes) get nothing from this transaction, but we have to pay in perpetuity for the storage of this record.

Exactly.
So why would you wanto to run a node?
Anyone asked you to do it?

Myself, I run my own node to have a trusted source of my wallet's balance.
Plus, I think it's fun.

I'm definitely not one of these guys who say that they run a node just "to contribute to the network".
It's actually kind of silly and infant.
Every party in this network does things out of self interest - not out of some altruism.
And so should you.

[Jet Cash]

I'm not sure why you are attacking me. I run a node part time because I think it gives me more control of my wallet. Also, I can learn more about Bitcoin by doing this. I don't think I contribute much to the Bitcoin system, because It's only run part time. I started this thread because I believe in Crypto-currencies, and I am investing quite a lot of time in learning about them. I will start investing money and building web sites when I feel comfortable with both the market and my knowledge. I need to try to anticipate the future of various altcoins, and, as a relative newbie, I am finding difficulty in doing this. If I feel that the future of Bitcoin is as a message service, then I'll switch to alternative curencies. Somebody has already posted "move over twitter", and I think that is a disaster for Bitcoin. I don't want to build a substantial holding in a currency that is offering a twitter-like service.

I've just started to download the Litecoin blockchain to expand my options. Prior to realising this risk to Bitcoin perception in the future, I intended to focus on Bitcoin. Now you can continue to attack me, but I won't be the only person to perceive this issue, and I believe it is one that should be addressed in the future.

[cr1776]

If you look at the op_return op code (as mentioned above) you will see that the amount of text that can be included is quite small so no one will be storing War and Peace, music or video in the (main) block chain.  Likewise, this has been available for a while now, was debated a lot, and there were other techniques in use to store a limited amount of data in there prior to this so it isn't anything new.

Using op_return is prunable too so it does not have to be stored on every node in perpetuity.  Other techniques, for example, sending to a "vanity" "address" can be used to encode data.  For example, I could send to "1freecarz...." if you want to encode the words "freecarz".  Or whatever.

Depending on the technique, one could store some data in most (all? perhaps) other cryptocurrencies. 

See e.g.
http://www.righto.com/2014/02/ascii-bernanke-wikileaks-photographs.html
https://www.quora.com/Bitcoin-How-can-I-leave-a-message-in-the-block-chain
http://bitcoin.stackexchange.com/questions/2631/what-are-the-key-differences-between-different-ways-of-embedding-messages-in-the
https://bitcointalk.org/index.php?topic=1023190.0
http://garzikrants.blogspot.com/2013/04/on-bitcoin-data-spam-and-evil-data.html
https://github.com/petertodd/python-bitcoinlib/blob/master/examples/publish-text.py

I'm not sure why you are attacking me. I run a node part time because I think it gives me more control of my wallet. Also, I can learn more about Bitcoin by doing this. I don't think I contribute much to the Bitcoin system, because It's only run part time. I started this thread because I believe in Crypto-currencies, and I am investing quite a lot of time in learning about them. I will start investing money and building web sites when I feel comfortable with both the market and my knowledge. I need to try to anticipate the future of various altcoins, and, as a relative newbie, I am finding difficulty in doing this. If I feel that the future of Bitcoin is as a message service, then I'll switch to alternative curencies. Somebody has already posted "move over twitter", and I think that is a disaster for Bitcoin. I don't want to build a substantial holding in a currency that is offering a twitter-like service.

I've just started to download the Litecoin blockchain to expand my options. Prior to realising this risk to Bitcoin perception in the future, I intended to focus on Bitcoin. Now you can continue to attack me, but I won't be the only person to perceive this issue, and I believe it is one that should be addressed in the future.

[piotr_n]

I'm not sure why you are attacking me. I run a node part time because I think it gives me more control of my wallet. Also, I can learn more about Bitcoin by doing this. I don't think I contribute much to the Bitcoin system, because It's only run part time. I started this thread because I believe in Crypto-currencies, and I am investing quite a lot of time in learning about them. I will start investing money and building web sites when I feel comfortable with both the market and my knowledge. I need to try to anticipate the future of various altcoins, and, as a relative newbie, I am finding difficulty in doing this. If I feel that the future of Bitcoin is as a message service, then I'll switch to alternative curencies. Somebody has already posted "move over twitter", and I think that is a disaster for Bitcoin. I don't want to build a substantial holding in a currency that is offering a twitter-like service.

I've just started to download the Litecoin blockchain to expand my options. Prior to realising this risk to Bitcoin perception in the future, I intended to focus on Bitcoin. Now you can continue to attack me, but I won't be the only person to perceive this issue, and I believe it is one that should be addressed in the future.

It is what it it.
Yes - you can store arbitrary data inside the blockchain and no - nobody is going to stop you from doing that, as long as you can afford the fee.
There are in fact huge benefits of being able to notarize information inside the bitcoin's blockchain. It is apparently not something you need at this moment, but it doesn't mean that this is a bad idea or an issue for the bitcoin system.

Now, the other thing.
You come to the place where bitcoin developers have been hanging out for years, telling that their system is shit and therefore you are going to change your mind whether to invest your time and money in it...
I mean, come on dude, if you don't think it is a tad arrogant, then you should at least be able to see some humor in it

[Jet Cash]

Now, the other thing.
You come to the place where bitcoin developers have been hanging out for years, telling that their system is shit and therefore you are going to change your mind whether to invest your time and money in it...
I mean, come on dude, if you don't think it is a tad arrogant, then you should at least be able to see some humor in it

Thanks for the informatiion.

I've never said Bitcoin is shit. I think you are confusing me with all the naysayers here, and the ones who use Bitcoin as a means of scratching a few cents.

If you remember, I am the one who believes that Bitcoin could become the gold standard of crypto currencies, and that side-chains could be the place for transactions. I think that's a vote of confidence in Bitcoin. Also, I believe that the core developers represent an awesome pool of talent, and they can take Bitcoin forward to some great heights in the future. I don't think Bitcoin will become the Phoenix currency, but it could become a major reserve currency. I'm still relatively new to crypto-curencies, but at least I'm trying to understand them, and to see their place in the global economy. Also I understand the difference between Bitcoin and "The Blockchain", something that seems to escape quite a few people.

[piotr_n]

No sorry, I don't remember what you believe and I don't care.

I was just on: whenever you have any technical questions/issues to raise, people here will gladly help you, for sure.
Expect some mean answers, as not everyone is as nice and patient as sipa, but in this board you can surely get a real bitcoin technology expert advises.

Just please don't start "I got disappointed with bitcoin" rhetoric as it is just pissing people off and IMHO majority of a long term bitcoin actual devs are quite fed up with this kind of BS today.

Now, coming back to the topic question: yes, you can run a mining node without maintaining UTXO database. Theoretically exposing yourself to an attack, but such an attack would be expensive, thus making it unlikely.

Whether an actual mining nodes without UTXO db are going to become an issue in a future - we are still to find out.
So far they have not been an issue, as a cost of maintaining the db at a mining node has been low enough to not encourage this kind of bad practices.

As for the future...
The truth is that nobody can say what bitcoin will be like 1, 3, 10 or 50 years from now - I am sure that today it is much different than Satoshi could had predicted. But it surely exists and is getting stronger - it will evolve and survive, whatever comes next.