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

[BitUsher]

More than that, the fee market can't work.

It can't work because the absolute number of transactions that have to be done is still the same! All those transactions stuck aren't just transactions of a few cents, they can't just be grouped together.

No, payment channels can group these txs together. No, some of these tx never need to occur in the first place or can be handled off chain. It simply isn't right for the community to subsidize the cost of spam... and in some ways, forever shoulder the cost... nor does it makes sense.  

Is there something specifically that you object to with p2p decentralized payment channels that settle on bitcoin?

[AlexGR]

Because fees add capacity. Got it!

Fees don't add capacity. They introduce antispamming disincentives to make use of existing capacity in a rational way.

Bitcoin is a p2p protocol that can be subject to numerous p2p attacks, including blockchain bloat attacks, mempool bloat etc - provided the fees are low and that there are co-operating miners that accept near-zero-cost txs for inclusion.

Your argument is valid only if you consider that the size is big enough to let the non spamming transactions go through. It seems like it's not really the case from the stats I saw 5 pages ago :/

It will generally be the case that spam pays as little as possible and legit txs pay more - unless the wallet misinformed the user. So legit txs would have no problem going through.

[rebuilder]

AlexGR: Who should decide what the fair price of a tx is?

In the presence of a rational mining market, the miners.

Am I to take it you believe in some cases the mining market should be fixed by some third party? What would constitute an irrational mining market? Who should step in to fix it?

[AlexGR]

More than that, the fee market can't work.

It can't work because the absolute number of transactions that have to be done is still the same! All those transactions stuck aren't just transactions of a few cents, they can't just be grouped together.

How can it not work, when it is working right now?

You don't pay or you pay less => you wait more.
You pay more => you wait less.

In the meantime the "less" and "more" are in the 0-2 cents to 4-6 cents range - which is practically near-zero cost.

[becoin]

Who should decide what the fair price of a tx is?

Competition between miners.

Sounds good to me! The old supply/demand dynamic, right?

Now, who should decide how much demand there is for tx?
Who should decide what the supply of tx is?

Demand is demand. Supply is supply. Free market is balancing supply and demand.
Every miner decides which is the lowest tx fee (cut-off level) for every particular block.
If tx fee for extended period is too low miners will go out of this business.
If tx fee for extended period is too high new miners will enter this business.
What don't you understand?

[BitUsher]

RIght now?

Just about anything, because the blocks are full.

Well that is dishonest.... for 6-7 pennies I can get a tx confirmed within the next block=

https://bitcoinfees.21.co/#delay

How do I spend eth without taking an exchange loss by converting to btc and than waiting even longer?

[AlexGR]

AlexGR: Who should decide what the fair price of a tx is?

In the presence of a rational mining market, the miners.

Am I to take it you believe in some cases the mining market should be fixed by some third party? What would constitute an irrational mining market? Who should step in to fix it?

I don't know if there is a third party that can override the miners.

Even, if, say, devs thought that the miners are acting irresponsibly with the issue of spam, they would have to make a minimum-fee hard fork to counter tx spam. But in order for that to be enforced, the hard fork should be adopted by nearly everyone (consensus) - with the miners being the most critical adopters.

So if the miners feel they are doing ok, why would they adopt the hf code?

[Adrian-x]

that same spam attack today with limited block space will crash nodes and block the mem pool for hours if not days, and cost the spammer nothing as his fees are returned to him.  

0.12 (to be released tomorrow I think - still one can build from source right now) can be tuned in terms of mempool size to avoid problems.

Memory pool limiting

Previous versions of Bitcoin Core had their mempool limited by checking a transaction's fees against the node's minimum relay fee. There was no upper bound on the size of the mempool and attackers could send a large number of transactions paying just slighly more than the default minimum relay fee to crash nodes with relatively low RAM. A temporary workaround for previous versions of Bitcoin Core was to raise the default minimum relay fee.

Bitcoin Core 0.12 will have a strict maximum size on the mempool. The default value is 300 MB and can be configured with the -maxmempool parameter. Whenever a transaction would cause the mempool to exceed its maximum size, the transaction that (along with in-mempool descendants) has the lowest total feerate (as a package) will be evicted and the node's effective minimum relay feerate will be increased to match this feerate plus the initial minimum relay feerate. The initial minimum relay feerate is set to 1000 satoshis per kB.

Bitcoin Core 0.12 also introduces new default policy limits on the length and size of unconfirmed transaction chains that are allowed in the mempool (generally limiting the length of unconfirmed chains to 25 transactions, with a total size of 101 KB). These limits can be overriden using command line arguments; see the extended help (--help -help-debug) for more information.
....
https://github.com/bitcoin/bitcoin/blob/0.12/doc/release-notes.md

For non-technical guys, this means Bitcoin becomes much more hardened against possible issues that arise from spam/stress situations, despite "blocks are full".

It looks like the Core Developers did not understand the full impact of their policy change.



It seems the cause of the problem is Core 0.12 nodes and miners not relaying valid transactions, causing the mempool to expand. The net result is less nodes and nodes that don't switch to the centralized control of Core 0.12 will become overloaded contributing to the problem.  

[AlexGR]

>There is nothing "very good" about it. It's way too low. Near zero cost fees attract near zero cost abuse.
If miner include those [near zero] tx now, what will make them reject them later?

Propagation delay maybe of very large blocks (?). Preferring to not include a lot of txs to reduce their orphan statistics - something like that. But that is contingent on not finding better ways to broadcast solved blocks.

>Plus it is not futureproof
Subsidizing miners with block rewards isn't future-proof. It's done to let Bitcoin grow up without having to earn its keep, like sending your kid to school [instead of putting her to work as soon as she can walk].

BTC emission serves a dual role though: You can also see it as an expansion and distribution of the monetary base.

[rebuilder]

Demand is demand. Supply is supply. Free market is balancing supply and demand.
Every miner decides which is the lowest tx fee (cut-off level) for every particular block.
If tx fee for extended period is too low miners will go out of this business.
If tx fee for extended period is too high new miners will enter this business.
What don't you understand?

The part where optimal supply isn't left for the market to figure out.

[becoin]

It seems the cause of the problem is Core 0.12 nodes and miners not relaying valid transactions, causing the mempool to expand.

I'm banning all 'classic' and XT nodes as transactions sent by those spammers are not valid transactions. They are altcoin promoters.

[rebuilder]

I'm banning all 'classic' and XT nodes as transactions sent by those spammers are not valid transactions. They are altcoin promoters.

What is it in the tx data that makes them invalid?

[BitUsher]

There is a big problem with this Fee market that should be resolved asap. While many wallets allow one to adjust the tx fees or even selected between different fee priorities , only 1 thus far that I know of automatically calculate realtime (bitgo) tx fee priorities so the user doesn't need to look them up with a service like https://bitcoinfees.21.co/#delay

This could easily be implemented , but is one of the temporary negative side effects created by a tx fee market.

It seems the cause of the problem is Core 0.12 nodes and miners not relaying valid transactions, causing the mempool to expand.

I'm banning all 'classic' and XT nodes as transactions sent by those spammers are not valid transactions. They are altcoin promoters.

Reminds me of luke-jr filtering out gambling tx's . I suppose every node has a right to restrict relaying certain tx's amd every miner has a choice to include a tx or not.

[AlexGR]

It seems the cause of the problem is Core 0.12 nodes and miners not relaying valid transactions, causing the mempool to expand. The net result is less nodes and nodes that don't switch to the centralized control of Core 0.12 will become overloaded contributing to the problem.  

It is highly unlikely 0.12 has anything to do with it, as it represents just 15% of the network. If a tx is not relayed it will be rebroadcast until relayed. However it will stay in the mempool as unprocessed if it doesn't have the right fees.

[Adrian-x]

More than that, the fee market can't work.

It can't work because the absolute number of transactions that have to be done is still the same! All those transactions stuck aren't just transactions of a few cents, they can't just be grouped together.

How can it not work, when it is working right now?

You don't pay or you pay less => you wait more.
You pay more => you wait less.

In the meantime the "less" and "more" are in the 0-2 cents to 4-6 cents range - which is practically near-zero cost.

you have to understand processing transaction fees are being subsidized by us users.

We all pay the subsidy cost by using Bitcoin and accepting the monetary inflation which is given to miners as a block reward in exchange for writing blocks to the blockchain. At the moment that is between $5.00 AND $10.00 for a simple transaction, and now miners arnt doing it, Because Core added new features so help them stop this behavior.  

Limiting block size is to protect against unsolicited use of Bitcoin. and it should not be to increase fees either.

Not processing transactions will push up fees (yes), but it will also drive out typical user cases by make other competitors which have the same or better technology more cost effective.

The question is now:
Why limiting space when it is forcing the mempool of unprocessed transactions up to record levels in normal operation.

Why fores users onto other competitive systems already this year Alts have grown 6% at the expense of Bitcoin.

Your arguing it's a non issue because users need to pay a little extra so miners can earn a additional $0.06 at most and it's important while we users are subsidizing a transaction to teh tune of $5-10 with block reward monetary inflation.  

Yes. I follow your logic.  Lets screw up bitcoin for an extra $0.02 wile we pay miners over $10,000 every 10 minus to write transactions to the block chain.

something they clearly have stooped doing effectively ever since a mempool limiting feature was added to Core 0.12.

[bargainbin]

More than that, the fee market can't work.

It can't work because the absolute number of transactions that have to be done is still the same! All those transactions stuck aren't just transactions of a few cents, they can't just be grouped together.

No, payment channels can group these txs together. No, some of these tx never need to occur in the first place or can be handled off chain. <snip>

This pleases Visa and PayPal!

... Limiting block size is to protect against unsolicited use of Bitcoin. ...

Err... Unsolicited by whom?
You realize that miners can reject tx they don't feel like handling, right?
Still haven't answered me re. why miners would start rejecting "unsolicited" tx they accept now.

[Adrian-x]

It seems the cause of the problem is Core 0.12 nodes and miners not relaying valid transactions, causing the mempool to expand.

I'm banning all 'classic' and XT nodes as transactions sent by those spammers are not valid transactions. They are altcoin promoters.

as of Core 0.12 you don't need to bann them, Core has already set the defaults for you.

turns out it's not only effective for all 'classic' and XT nodes but all core nodes running 0.11 and below. Yes obviously its just Core0.12 that's correct every other node is spamming the network.

[billyjoeallen]

Regarding fees and blocksize:
People use the best option they have until a better option materializes. This should be obvious. What is going to prevent people from using an altcoin when one becomes a better option, other than censorship and DDoS attacks?  

I watch Shark Tank and it has given me a good idea how successful investors think. Is the idea proprietary? What is the barrier to entry for competition? Is management skilled and motivated?

If you are not investing in a proprietary idea, You have to be investing in the skills/motivation/track record of management. If you aren't investing in at least one of those two things, you are throwing money away.

So knowing that, is Bitcoin a good investment?

All other altcoins are primarily used for speculation alone and have little if not any utility. One has to take a "shapeshift" exchange cut to even spend them. This could change in 5-10 years, no doubt, but it is unwise for people to recommend others to gamble into a testnet scam rather than simply offloading to fiat if they are unhappy with bitcoin. If someone wants to invest in an altcoin because they really believe in it and understand it than so be it... but those threatening to divest into ETH* are mainly doing so as a scare tactic.

No matter how big the blocksize is won't solve our problems. We can still easily doublespend 0 conf txs (without RBF), and waiting 2-3 conf (min recommended) isn't fast enough and will never allow bitcoin to go mainstream. We need Segwit ASAP and multiple payment channel solutions to allow for secure instant tx's and scalability. Allowing spam to drop off and go offchain temporarily is a good thing and will motivate our community to use payment channels instead of simply stuffing everything in a block in a sloppy manner.  

* I would love to hear of a hypothetical use case of Ethereum that wouldn't be better done through Bitcoin or Oracles.

That doesn't really answer my question. I wasn't just asking if Bitcoin is a good investment relative to Etherium. In some cases, it may be, depending on a person's risk tolerance, how long they want to hold it, etc,  but whether or not Bitcoin was something you could sell to the sharks on Shark Tank.  I don't think I could because I would have to sell a management team that frankly embarrasses me.

Utility is an argument for using Bitcoin, not for investing in it.  For that we would have to know what Bitcoin's future utility would likely be relative to alternatives.  That's unknown and honestly unknowable with current leadership. 

So you're right. This isn't just about blocksize. It's about leadership. We all agree that Bitcoin shouldn't be ruled by anyone, but without rulers, leaders become MORE important, not less.  Someone has to sell their vision well enough that consensus can form around it. That isn't accomplished by DDoS attacks and censorship. It's not achieved with flame wars, character assassinations, market manipulations or stalling tactics. It's achieved by good old-fashioned leadership. Until competent leadership emerges, Bitcoin will probably not be a good investment.

[AlexGR]

Why fores users onto other competitive systems already this year Alts have grown 6% at the expense of Bitcoin.

Can you show me the transactions these other competitive systems are doing?

I actually tried a block explorer with major altcoins, and their blocks are ghost-towns.

Last 5 blocks (tx count):

litecoin
3-1-1-7-9

dash
3-11-7-9-1

monero
2-1-1-1-1

eth
0-2-0-7-0

btc:
702-1420-2196-2384-2764

[becoin]

I'm banning all 'classic' and XT nodes as transactions sent by those spammers are not valid transactions. They are altcoin promoters.

What is it in the tx data that makes them invalid?

I'm not obliged to explain again and again why free block space to every bitcoin spammer will ruin bitcoin. I've made enough efforts. I'm the owner of the node I run. I decide which tx are valid and which are not! Time to end futile discussions with big blocktards. It is time to act.