Wall Observer BTC/USD - Bitcoin price movement tracking & discussion

[JorgeStolfi]

Do you know if there's a way to see what fee they paid? Was it like normal fee of 0.0001 btc? (About 2 or 3 cents)
If so, wouldn't a move to a minimum fee of say ten cents largely fix the problem?

I watched the transactions for a short while during the test, I remember seeing many 0.0001, several 0.0002, a few with larger fees.  I don't know whether the 0.0002 were part of the test or not.  Perhaps they answer that in this thread

Raising the minimum fee to ~0.10 USD would make this sort of attack more expensive, but it would still be cheap and simple compared to, say, a 51% attack by an outside party.  Also raising the block size to 8 MB would make it 8x more expensive.

A mandatory 0.10 USD fee would have other advantages.  It would encourage miners to fill blocks.  It would cut down annoying small transactions that are being spammed to random addresses for advertisement purposes.  However, it would have some drawbacks.  It would harm things like tumbling and gambling, which many people consider important.  It would also probably cut the number of transactions by 50% or more, that would look bad on charts.

Also, do you know why Satoshi decided to limit the block size in the first place? I mean, I've heard it was to prevent some kind of spam attack, but now people are saying that increasing block size will prevent spam attack... I've never seen a good description of the attack they were trying to mitigate by limiting block size in the first place. Best guess is simply to prevent bloat?

There are posts by Satoshi on this forum discussing that; check his posts through his user profile.  The original limit was 32 MB.  Then people thought that a malicious miner might create 32 MB blocks full of garbage transactions, that would take a long time to send across the network, validate, download when syncing, etc.; that could break some nodes or clients.  So Satoshi and/or Gavin changed the limit to 1 MB, and commented that it should be raised later if necessary.

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[ChartBuddy]

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[ChartBuddy]

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[Wexlike]

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The 240 $ range seems like the new 220.

[pleaseexplainagain]

Do you know if there's a way to see what fee they paid? Was it like normal fee of 0.0001 btc? (About 2 or 3 cents)
If so, wouldn't a move to a minimum fee of say ten cents largely fix the problem?

I watched the transactions for a short while during the test, I remember seeing many 0.0001, several 0.0002, a few with larger fees.  I don't know whether the 0.0002 were part of the test or not.  Perhaps they answer that in this thread

Raising the minimum fee to ~0.10 USD would make this sort of attack more expensive, but it would still be cheap and simple compared to, say, a 51% attack by an outside party.  Also raising the block size to 8 MB would make it 8x more expensive.

A mandatory 0.10 USD fee would have other advantages.  It would encourage miners to fill blocks.  It would cut down annoying small transactions that are being spammed to random addresses for advertisement purposes.  However, it would have some drawbacks.  It would harm things like tumbling and gambling, which many people consider important.  It would also probably cut the number of transactions by 50% or more, that would look bad on charts.

Also, do you know why Satoshi decided to limit the block size in the first place? I mean, I've heard it was to prevent some kind of spam attack, but now people are saying that increasing block size will prevent spam attack... I've never seen a good description of the attack they were trying to mitigate by limiting block size in the first place. Best guess is simply to prevent bloat?

There are posts by Satoshi on this forum discussing that; check his posts through his user profile.  The original limit was 32 MB.  Then people thought that a malicious miner might create 32 MB blocks full of garbage transactions, that would take a long time to send across the network, validate, download when syncing, etc.; that could break some nodes or clients.  So Satoshi and/or Gavin changed the limit to 1 MB, and commented that it should be raised later if necessary.

in the future when the average person is starting to get around to using bitcoin a set fee rather than a percentage fee would have some adoption advantages. Most people are bad at maths (or rather never got taught properly) so even relating percentages to a base is scary for them even if the resulting cost (fee) is small - they just are in the dark. But they know what 10 cents is or $2 or whatever. It may also help get more remittances via bitcoin as they can compare bitcoin fees to western union (although at present the service provision of the two is not currently like for like). If we want more "demand' them some bitcoin development decisions may have to be increasingly market (ie user) focused should there be a choice of options to solve a given issue

[ChartBuddy]

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[Elwar]

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The 240 $ range seems like the new 220.

If it holds in the 240 range for another 2 weeks or so we can officially declare the bear market dead.

[ChartBuddy]

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[klee]

[Erdogan]

I'm pretty sure I read somewhere that there was no block size limit in Satoshi's software. They added it later. He believed in game theory where things sort themselves out through risk and reward.

Not sure,  but I found this?

"Andresen never mentions the actual reason that Satoshi imposed a block limit. Oleg Andreev, however, does:
Huge blocks could lead to excessive use of bandwidth which could lead to higher percentage of orphaned blocks due to higher synchronization delays."
From: http://cascadianhacker.com/blog/2014/10/25_notes-on-increasing-the-maximum-bitcoin-block-size-or-why-it-aint-happenin.html

If bandwidth is really the only issue then you would think the 8mb compromise will likely gain enough traction to get implemented. After all, even with a 8mb limit, most miners will still be sticking to 750 k - until you provide sufficient incentive to change.

Yeah, exactly. You can have a higher limit or no limit at all and it's still a risk for a miner to build a block that big. It's going to take a longer time to propagate over the internet which means more time for another miner to find another (smaller/faster) block and possibly orphan yours. I'm sure the limit was created to prevent some kind of "large block attack" (to disrupt miners with slow internet?) but in reality, risk and reward will prevent most miners from increasing their block size very much even when the limit is officially increased.

Exactly, a big part of the cost of mining large blocks is the risk.

[oda.krell]

I'm pretty sure I read somewhere that there was no block size limit in Satoshi's software. They added it later. He believed in game theory where things sort themselves out through risk and reward.

Not sure,  but I found this?

"Andresen never mentions the actual reason that Satoshi imposed a block limit. Oleg Andreev, however, does:
Huge blocks could lead to excessive use of bandwidth which could lead to higher percentage of orphaned blocks due to higher synchronization delays."
From: http://cascadianhacker.com/blog/2014/10/25_notes-on-increasing-the-maximum-bitcoin-block-size-or-why-it-aint-happenin.html

If bandwidth is really the only issue then you would think the 8mb compromise will likely gain enough traction to get implemented. After all, even with a 8mb limit, most miners will still be sticking to 750 k - until you provide sufficient incentive to change.

Yeah, exactly. You can have a higher limit or no limit at all and it's still a risk for a miner to build a block that big. It's going to take a longer time to propagate over the internet which means more time for another miner to find another (smaller/faster) block and possibly orphan yours. I'm sure the limit was created to prevent some kind of "large block attack" (to disrupt miners with slow internet?) but in reality, risk and reward will prevent most miners from increasing their block size very much even when the limit is officially increased.

Exactly, a big part of the cost of mining large blocks is the risk.

I'm pretty sure that argument only holds in case of "excess capacity" though.

Once sufficient network usage exists, a miner willing to create a block closer to max size will be rewarded higher as well (more tx, more fees), at the risk  mentioned above.

My impression is that miners are a risk averse bunch on average, so perhaps they'll always (on average) stay below the maximum, but I'd expect some form of equilibrium to emerge, a value that most miners see as a good tradeoff between minimizing risk and maximizing fees, and I'm certain that value will eventually be higher than what it is now the max block size, assuming the network continues to grow.


tl;dr "minizing orphan risk" is certainly a consideration of miners, but it is also not the only consideration, otherwise this wouldn't be what we see in reality:

[ChartBuddy]

Coin
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[Fatman3001]

I'm pretty sure I read somewhere that there was no block size limit in Satoshi's software. They added it later. He believed in game theory where things sort themselves out through risk and reward.

Not sure,  but I found this?

"Andresen never mentions the actual reason that Satoshi imposed a block limit. Oleg Andreev, however, does:
Huge blocks could lead to excessive use of bandwidth which could lead to higher percentage of orphaned blocks due to higher synchronization delays."
From: http://cascadianhacker.com/blog/2014/10/25_notes-on-increasing-the-maximum-bitcoin-block-size-or-why-it-aint-happenin.html

If bandwidth is really the only issue then you would think the 8mb compromise will likely gain enough traction to get implemented. After all, even with a 8mb limit, most miners will still be sticking to 750 k - until you provide sufficient incentive to change.

Yeah, exactly. You can have a higher limit or no limit at all and it's still a risk for a miner to build a block that big. It's going to take a longer time to propagate over the internet which means more time for another miner to find another (smaller/faster) block and possibly orphan yours. I'm sure the limit was created to prevent some kind of "large block attack" (to disrupt miners with slow internet?) but in reality, risk and reward will prevent most miners from increasing their block size very much even when the limit is officially increased.

Exactly, a big part of the cost of mining large blocks is the risk.

I'm pretty sure that argument only holds in case of "excess capacity" though.

Once sufficient network usage exists, a miner willing to create a block closer to max size will be rewarded higher as well (more tx, more fees), at the risk  mentioned above.

My impression is that miners are a risk averse bunch on average, so perhaps they'll always (on average) stay below the maximum, but I'd expect some form of equilibrium to emerge, a value that most miners see as a good tradeoff between minimizing risk and maximizing fees, and I'm certain that value will eventually be higher than what it is now the max block size, assuming the network continues to grow.


tl;dr "minizing orphan risk" is certainly a consideration of miners, but it is also not the only consideration, otherwise this wouldn't be what we see in reality:

If miners were risk averse they wouldn't be miners. But when you're in the game it makes sense to minimize risk.

[oda.krell]

If miners were risk averse they wouldn't be miners. But when you're in the game it makes sense to minimize risk.

Agreed. Didn't feel like elaborating, but I think miners are a weird bunch that seem to be extremely favorable towards risk on the higher level decisions (like: should I buy mining gear that will barely break even, instead of buying on the market), but then being rather risk averse on the smaller level decisions.

[ChartBuddy]

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[mymenace]

If miners were risk averse they wouldn't be miners. But when you're in the game it makes sense to minimize risk.

Agreed. Didn't feel like elaborating, but I think miners are a weird bunch that seem to be extremely favorable towards risk on the higher level decisions (like: should I buy mining gear that will barely break even, instead of buying on the market), but then being rather risk averse on the smaller level decisions.

alot of miners start of with no reward its how bitcoin started its how altcoins continue.

[Calabi–Yau Manifold]

https://www.reddit.com/r/Bitcoin/comments/3agk61/ultimate_bitcoin_stress_test_monday_june_22nd/

Why F2Pool blocked transactions? To get only blocks with reward 

[ChartBuddy]

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[ChartBuddy]

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[Fatman3001]

If miners were risk averse they wouldn't be miners. But when you're in the game it makes sense to minimize risk.

Agreed. Didn't feel like elaborating, but I think miners are a weird bunch that seem to be extremely favorable towards risk on the higher level decisions (like: should I buy mining gear that will barely break even, instead of buying on the market), but then being rather risk averse on the smaller level decisions.

Yup, that pretty much sums us up.