Economically Unspendable Outputs: A Problem On The Radar

[DoomDumas]

Sorry but thread title is misleading.

Right. There is an attack, but it's originating from the OP.

+1

MisterBigg being more and more Ignored.. not surprising

[justusranvier]

The only information that miners absolutely must keep on hand is the set of unspent outputs (UTXO set) because it's possible to allow them to discard all the rest of the historical transaction data using optimizations that have been discussed but not yet implemented. The UTXO set is what some people refer to as unprunable data.

Right now that set is a few hundred megabytes, but if we imagine a billion Bitcoin users all playing Satoshi Dice it would get very large unless there is an incentive for users to limit the number of outputs in their wallet. Especially when the transaction rate is very high miners are probably going to want to keep the UTXO in RAM to speed up verification, which means as the set gets larger their capital equipment costs go up.

So if they effectively subsidize transactions which reduce the UTXO set by requiring a lower fee in the number of outputs is less than the number of inputs they lose a bit in fee revenue but gain in terms of lower hardware requirements.

Once miners start doing this, client developers will have an incentive to include dust collection into their coin selection algorithms and the dust will be cleaned up automatically.

[solex]

Sorry but thread title is misleading.

Right. There is an attack, but it's originating from the OP.

+1

MisterBigg being more and more Ignored.. not surprising

DoomDumas, you might not agree with misterbigg's unconventional cage-rattling approach but he does deserve to be heard. I disagree with him in a major way regarding the 1Mb limit, but I do agree with his concerns about Bitcoin being abused as a messaging system and shotgunned with micro-transactions.

You had a good laugh about Mt Gox choking up earlier this week, as you use other exchanges, but what if Bitcoin itself chokes up? Are you going to laugh about that and load up on pre-mined Freicoin instead?

I am still concerned because people are talking about using bots for SatoshiDice. This would seem a green light for high-volume traffic growth and Bitcoin seizures which would make Mt Gox's choke-up a pause for breath in comparison.

[misterbigg]

The only information that miners absolutely must keep on hand is the set of unspent outputs (UTXO set) because it's possible to allow them to discard all the rest of the historical transaction data using optimizations that have been discussed but not yet implemented...

Okay, thanks for clarifying. I understand it now. This deserves a good response but not in the general discussion forum where the lunatics mingle with the sane. I'm going to move this to the thread you started in Development and Technical Discussion.

...you might not agree with misterbigg's unconventional cage-rattling approach but he does deserve to be heard....I do agree with his concerns about Bitcoin being abused as a messaging system and shotgunned with micro-transactions.

I'm the first to admit that I've projected a certain amount of sensationalism. But only because this is a social issue. Despite Bitcoin's decentralized nature, there is still a community that needs to act together for the common good. For example, what if we need a hard fork some time in the future?

I disagree with him in a major way regarding the 1Mb limit

There's a lot more room for debate regarding the block size, and it's not really a pressing issue right now which is why I have not brought it to the same level of attention that I did with this SD spam. I posted this thread because there was a lot of consternation in bitcoin-dev about the deluge of S.DICE loss confirmations.

I do concede that the block size issue is not so clear cut. There are good arguments to be made on both sides. But there are no sound arguments for keeping the SD dust.

I am still concerned because people are talking about using bots for SatoshiDice.

That is a concern but if people want to pay the transaction fees to send economically spendable amounts, there's nothing that we can really do about it, since it can't be distinguished from "legitimate use." In the long run the bots will just drive fees up prematurely but that might be something we just have to accept.

[evoorhees]

but I do agree with his concerns about Bitcoin being abused as a messaging system and shotgunned with micro-transactions.

Let's remember that the small txs from SatoshiDice are only about 1/8th of all txs on the Bitcoin network (1/4th of SD-related txs, which are in turn 1/2 of the network, roughly). If SD stopped the loss-bet confirmation txs, you only reduce blockchain usage by 1/8th... and this amount will be re-added to the network within a month or two.

It is a very silly distraction to get in a fuss about the loss-bet txs from SatoshiDice.

[solex]

but I do agree with his concerns about Bitcoin being abused as a messaging system and shotgunned with micro-transactions.

Let's remember that the small txs from SatoshiDice are only about 1/8th of all txs on the Bitcoin network (1/4th of SD-related txs, which are in turn 1/2 of the network, roughly). If SD stopped the loss-bet confirmation txs, you only reduce blockchain usage by 1/8th... and this amount will be re-added to the network within a month or two.

It is a very silly distraction to get in a fuss about the loss-bet txs from SatoshiDice.

OK, thanks for the further information, it is indeed reassuring! And in fact, it is now clear that SatoshiDice is not an imminent risk to Bitcoin because you are monitoring the situation and it is always under your control. The real risk lies in the sudden emergence of one or more of a special type of high volume application owned by people who will not make themselves known to the forum. We can call them Dead Puppy Apps, if i can borrow gmaxwell's terminology here.

[misterbigg]

It is a very silly distraction to get in a fuss about the loss-bet txs from SatoshiDice.

Some facts. "DP-involved" means any transaction which has a SatoshiDICE address in either the inputs or the outputs.

...A transaction is considered DP involved if it pays to an identified DP address or if any of its inputs paid to an identified DP address.

Height  Size    Amount of DP-involved.
224737 163012 82.0755%
224736 498888 94.9111% (!)
224734 249140 93.4021%
224732 498991 85.5789%
224728 249091 80.2395%

...the supply of these transactions seems to be basically unbounded it seems likely that adjustments to block target sizes are unlikely to produce faster confirmations at this time.

There is so much SD transaction spam that it is enough to fill blocks of any size. Can anyone honestly say with a straight face that this is healthy, productive growth?

[solex]

To be fair, it is paid for by fees which are bigger than all other sources combined, and will get bigger because of the 0.5% change. Which means it is not spam, but a type of high-volume flow which, arguably, Bitcoin is not ready for.

[misterbigg]

To be fair, it is paid for by fees which are bigger than all other sources combined, and will get bigger because of the 0.5% change. Which means it is not spam, but a type of high-volume flow which, arguably, Bitcoin is not ready for.

Fees in SD's increased traffic only pays for some of the added costs. Specifically, the SD traffic that produces economically unspendable outputs is not sufficiently compensated by the transaction fee.

As I have said many times there are two components to the SD spam:

1) high transaction volume
2) economically unspendable outputs

While #1 is not particularly desirable since it doesn't come with a corresponding increase in Bitcoin adoption, it is tolerable since eventually we will have to support that volume regardless. What is lamentable is that it drives transaction fees up prematurely but this is only a temporary effect.

#2 is a disaster! This is what could "KILL" Bitcoin, because it disproportionately increases the initial and ongoing costs of mining! And it's not a storage issue. It's a CPU issue, because the bottleneck is in signature verification. Although it certainly increases storage costs (by a small amount).

ECONOMICALLY UNSPENDABLE OUTPUTS are the terminal problem. Not the transaction volume.

[bitcoinbeliever]

What a load of nonsense [..]  reminds me of shitload of propaganda that is poured on every single person all around the world for the last several thousand years.

Absolutely first-class, A+ rant!  I quite agree and this thread is suspicious in the extreme.

[solex]

....

#2 is a disaster! This is what could "KILL" Bitcoin, because it disproportionately increases the initial and ongoing costs of mining! And it's not a storage issue. It's a CPU issue, because the bottleneck is in signature verification. Although it certainly increases storage costs (by a small amount).

ECONOMICALLY UNSPENDABLE OUTPUTS are the terminal problem. Not the transaction volume.

#2 was seemingly resolved/minimized...
https://bitcointalk.org/index.php?topic=150493.msg1604045#msg1604045

I know that 5000 satoshi for the 0.01 bet size is marginal, but anything much larger becomes spendable, surely.

[misterbigg]

#2 was seemingly resolved/minimized...
https://bitcointalk.org/index.php?topic=150493.msg1604045#msg1604045

I know that 5000 satoshi for the 0.01 Bet size is marginal, but anything much larger becomes spendable, surely.

5000 satoshi is below the minimum tx fee for relay of non-aged coins so how could this be resolved? I think SD added this to work around psy's hack.

[bitnoob]

Would it be better for Bitcoin if SatoshiDice were to switch to LiteCoin instead?

[misterbigg]

Would it be better for Bitcoin if SatoshiDice were to switch to LiteCoin instead?

Now this is probably the best question that has ever been asked!

[solex]

#2 was seemingly resolved/minimized...
https://bitcointalk.org/index.php?topic=150493.msg1604045#msg1604045

I know that 5000 satoshi for the 0.01 Bet size is marginal, but anything much larger becomes spendable, surely.

5000 satoshi is below the minimum tx fee for relay of non-aged coins so how could this be resolved? I think SD added this to work around psy's hack.

Ok. I just checked on github and based on the latest revision dust is considered < 100,000 satoshi
However, the fx rate is 3 times higher since that was decided, so 33,000 is a reasonable comparison now. So any SatoshiDice bet above 0.07 will not leave a dust amount for a loss.
https://github.com/bitcoin/bitcoin/pull/2100

[ShadowOfHarbringer]

The whole Bitcoin network exists exactly for the reason of coping with human imperfections (like forgery, double spending, thievery and other cons), so if it cannot do that, that means it is *completely useless*.

Did i make myself clear this time ?

Nobody is arguing against that. The point raised by the OP is that the current structuring of transaction fees only takes into account the current network cost of a transaction and doesn't capture the (indeterminate) future cost of keeping that unspent output available.

If you want to understand it in software terms: intentionally unspendable outputs have the same devastating effect as a memory leak.

Oh, I understand this perfectly. But you are not really on topic.

What is this discussion about is:
- Misterbigg wants us, community to *socially pressure SatoshiDICE into stopping generating spam*
- I (and many others) say that this is *bullshit and a pointless waste of time, because network should be designed to cope with that*. And if it isn't yet, it should be. Why ? Because somebody with really bad intentions will start attacking it using this vulnerability sooner or later.

[ShadowOfHarbringer]

Would it be better for Bitcoin if SatoshiDice were to switch to LiteCoin instead?

Now this is probably the best question that has ever been asked!

Again: you cannot and will not tell SatoshiDice (or anybody else for that matter) what to do with their Bitcoins.

If they can send spam, then it is a problem of the network. The network should not allow them to do that or it should make it unfeasible/uneconomic. If it doesn't do that, it needs to be fixed.

----
Please, stop spreading your stupid FUD.

[finway]

If bitcoin can't deal with SatoshiDice, how can it deal with fiat money?

[Luke-Jr]

To be fair, it is paid for by fees which are bigger than all other sources combined, and will get bigger because of the 0.5% change. Which means it is not spam, but a type of high-volume flow which, arguably, Bitcoin is not ready for.

The current fees are there to deter flooding, not to justify it. Even with fees, transactions are still being mostly subsidized by miners.

To use gmaxwell's analogy...
The city has decided that to prevent pissing in an alley, they will impose a $1 fee anytime someone goes into it. The goal is to stop pissing in the alley, and $1 was chosen as a price that wouldn't be too harmful to legitimate alley use. The cost of cleaning up piss in the alley is still at least $7.
Now a bar (DiceBar) opens up next door to the alley. Instead of operating a bathroom, they've decided it's cheaper for them to just add the $1 fee to all their customers' bills as a surcharge, and have customers go piss in the alley instead.
While a few customers leave in disgust at this policy, most of them are drunk (gambling addiction) and go piss in the alley, never giving it a second thought. There are a few who stand up for DiceBar - they say that since the bar is "paying" the fee, they have the right to use the alley as a bathroom.

Any rational person can see how ridiculous this is.

[Lethn]

If they can send spam, then it is a problem of the network. The network should not allow them to do that or it should make it unfeasible/uneconomic. If it doesn't do that, it needs to be fixed.

This actually reminds me a lot of the logic behind a large games company never fixing something, when they discover a blatantly abused glitch or bug, their response the majority of the time is to run around banning people and locking threads pointing it out. Instead of just fix it which in the long run would be far easier and make them more money because then people could keep playing the game.

Where the fuck do people get off this logic that making a problem illegal or banning it fixes everything? It seems to be a commonly accepted and wrong piece of reasoning everywhere.