Heavy transaction fee for old account: solution of deflationary spiral

[peak]

The idea is inspired by revcoin's topic http://forum.bitcoin.org/index.php?topic=19278.0

To prevent deflationary spiral that may come some day, I have a very simple suggestion: all the miners and mining pools make an agreement that transaction fee should be a function of activity(or "age") of payer's address/account, which can easily checked by tracing back it's information in old blocks. Old account will spend more transaction fee to make the transaction confirmed, unless the payer build a powerful mining rig and successfully create a block to include that transaction.

For those account with huge amount of bitcoins, if the owner want to spend them in some day that each bitcoin can exchange for 10000$, he/she may only be able to trans 1% of them, and the rest 99% will be charged as transaction fee. He or She will still be a rich person, but bitcoin will not make any one a billionaire by simply hold a large amount of bitcoin for several years.

I think the idea is feasible： miners can earn more by this 'rule', and daily users of bitcoin will not worry about the bitcoin they spent will have severalfold purchasing power after one year and grudge to use them.

With this "rule", bitcoin will become a "currency" rather than "digital gold".

[1714780836]

1714780836

[vrotaru]

First the proper place to discuss such topics is Economics subforum.

Second there are already 20+ such threads. I for one enjoy some deflation of deflation critics.

[xenon481]

[...]I have a very simple suggestion: all the miners and mining pools make an agreement that transaction fee should be a function of activity(or "age") of payer's address/account, which can easily checked by tracing back it's information in old blocks. Old account will spend more transaction fee to make the transaction confirmed, unless the payer build a powerful mining rig and successfully create a block to include that transaction.[...]

This measure is easily defeated.

1. Create two receiving addresses within the same wallet
2. Daily, transfer all funds from one receiving address to the other

Now I am maintaining activity and so do not need to pay these extra transaction fees.

[peak]

First the proper place to discuss such topics is Economics subforum.

Second there are already 20+ such threads. I for one enjoy some deflation of deflation critics.

Just ignore this post if the idea have been suggested before.  

[...]I have a very simple suggestion: all the miners and mining pools make an agreement that transaction fee should be a function of activity(or "age") of payer's address/account, which can easily checked by tracing back it's information in old blocks. Old account will spend more transaction fee to make the transaction confirmed, unless the payer build a powerful mining rig and successfully create a block to include that transaction.[...]

This measure is easily defeated.

1. Create two receiving addresses within the same wallet
2. Daily, transfer all funds from one receiving address to the other

Now I am maintaining activity and so do not need to pay these extra transaction fees.

That won't work. As I have mentioned--transaction fee is a function of the age of account(address), which do not means that you wont be charged if your account is a one day fresh account. If you have 100BTC, and you transfer it from one address to another daily, you might be charged 0.1BTC every day--63.5BTC left after one year, or you let your money sleep for one year, and get a 20BTC charged for spending the rest 80, you may definitely prefer the second choice.

[niooron]

If this is implemented now, cant I just move my btc between two wallets like once a week or once a month?

[Vladimir]

Great idea. Go make your own block chain now.

[GideonGono]

The idea is inspired by revcoin's topic http://forum.bitcoin.org/index.php?topic=19278.0

To prevent deflationary spiral that may come some day, I have a very simple suggestion: all the miners and mining pools make an agreement that transaction fee should be a function of activity(or "age") of payer's address/account, which can easily checked by tracing back it's information in old blocks. Old account will spend more transaction fee to make the transaction confirmed, unless the payer build a powerful mining rig and successfully create a block to include that transaction.

For those account with huge amount of bitcoins, if the owner want to spend them in some day that each bitcoin can exchange for 10000$, he/she may only be able to trans 1% of them, and the rest 99% will be charged as transaction fee. He or She will still be a rich person, but bitcoin will not make any one a billionaire by simply hold a large amount of bitcoin for several years.

I think the idea is feasible： miners can earn more by this 'rule', and daily users of bitcoin will not worry about the bitcoin they spent will have severalfold purchasing power after one year and grudge to use them.

With this "rule", bitcoin will become a "currency" rather than "digital gold".

What is so wrong with early adopters becoming rich. What incentive is there for people to participate during the early hard time like the Mt Gox hack, DEA crackdown on SIlk Road and theft of $500,000 worth of BTC? What is the incentive if people come along and decide that it wrong to make profit for taking risk?

Furthermore, the whole deflationary spiral thing is a myth of Keynesian economics. More info:

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

[Sukrim]

Great idea. Go make your own block chain now.

Why should he? He's suggesting miner's fees...

He should rather build his own pool and enforce these rules there - additionally document this so well, that other pool operators that agree with him also can easily enforce this ruleset.

[Vladimir]

Great idea. Go make your own block chain now.

Why should he? He's suggesting miner's fees...

He should rather build his own pool and enforce these rules there - additionally document this so well, that other pool operators that agree with him also can easily enforce this ruleset.

It is much easier to get 50% miners to conform with this idea (and block other 50% of miners who do not conform) on a new block chain where you control 100% of mining than on a 10 Thps block chain where you control 0%.

Edit: made bold a part of my post for those with reading comprehension issues.

[Sukrim]

It is much easier to get 50% miners to conform with this idea (and block other 50% of miner who do not conform) on a new block chain where you control 100% of mining than on a 10 Ghps block chain where you control 0%.

Having 50% of miners following these rules would only mean that it takes 50% longer for someone putting up a transaction that does not conform with these rules until it gets coded into a block. It would hinder noone to mine them into blocks themselves, hiring miners to manually put this transaction into blocks (could be even something for your mining contractors? 0 fee, always guaranteed on your mining cluster like Luke-Jr does with his Eligius Pool + client patch) even if 99.9% of the network would follow these (artificial) rules.

To forge this into a block chain, some serious development effort would need to happen to ensure only such transactions are allowed.

The point of the OP is, that such transactions are allowed in Bitcoin, but in his/her opinion not desired, so miners should not include them.

To enforce such a rule, a LOT of miners would need to be convinced (as only 50% would just mean that it would take just twice as long until it gets into a block - so it takes 7 instead of 6 blocks to confirm...).

[cunicula]

What is so wrong with early adopters becoming rich. What incentive is there for people to participate during the early hard time like the Mt Gox hack, DEA crackdown on SIlk Road and theft of $500,000 worth of BTC? What is the incentive if people come along and decide that it wrong to make profit for taking risk?

Furthermore, the whole deflationary spiral thing is a myth of Keynesian economics. More info:

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

Great Depression made up too?

[relative]

you are basically proposing the "Freigeld" theory: http://en.wikipedia.org/wiki/Freigeld
in particular what gsell calls "cash flow safe".

whatever you think of it, the fact that there seems to no decision yet still about transaction fees shows you that bitcoin is in a very early stage.
when all is said and done, bitcoin could be Freigeld. or not.
no decision yet.

[peak]

The idea is inspired by revcoin's topic http://forum.bitcoin.org/index.php?topic=19278.0

To prevent deflationary spiral that may come some day, I have a very simple suggestion: all the miners and mining pools make an agreement that transaction fee should be a function of activity(or "age") of payer's address/account, which can easily checked by tracing back it's information in old blocks. Old account will spend more transaction fee to make the transaction confirmed, unless the payer build a powerful mining rig and successfully create a block to include that transaction.

For those account with huge amount of bitcoins, if the owner want to spend them in some day that each bitcoin can exchange for 10000$, he/she may only be able to trans 1% of them, and the rest 99% will be charged as transaction fee. He or She will still be a rich person, but bitcoin will not make any one a billionaire by simply hold a large amount of bitcoin for several years.

I think the idea is feasible： miners can earn more by this 'rule', and daily users of bitcoin will not worry about the bitcoin they spent will have severalfold purchasing power after one year and grudge to use them.

With this "rule", bitcoin will become a "currency" rather than "digital gold".

What is so wrong with early adopters becoming rich. What incentive is there for people to participate during the early hard time like the Mt Gox hack, DEA crackdown on SIlk Road and theft of $500,000 worth of BTC? What is the incentive if people come along and decide that it wrong to make profit for taking risk?

Furthermore, the whole deflationary spiral thing is a myth of Keynesian economics. More info:

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

I'm not against early adopters. Satoshi Nakamoto should be as rich as Mark Zuckerberg does if bitcoin survived. but bitcoin will not make any one a billionaire by simply hold a large amount of bitcoin for several years.--I don't think early adopters will do so, they will spend their money to open business to make bitcoin success and earn more.

I write is just for those who worry about deflationary spiral--if this happen some day and it really turns out to be terrible, the bitcoin community have ways to solve it.

[DamienBlack]

Deflationary spiral? I don't believe there is such a thing. Inflation? Yes. Deflation? Shady.

From Wikipedia:

"Whether deflationary spirals can actually occur is controversial, with its possibility being disputed by Austrian school libertarian economist Robert Higgs."


And it would require wages to be paid in bitcoin being a driving factor of the economy. Just not seeing it happen. Even.

[peak]

It is much easier to get 50% miners to conform with this idea (and block other 50% of miner who do not conform) on a new block chain where you control 100% of mining than on a 10 Ghps block chain where you control 0%.

Having 50% of miners following these rules would only mean that it takes 50% longer for someone putting up a transaction that does not conform with these rules until it gets coded into a block. It would hinder noone to mine them into blocks themselves, hiring miners to manually put this transaction into blocks (could be even something for your mining contractors? 0 fee, always guaranteed on your mining cluster like Luke-Jr does with his Eligius Pool + client patch) even if 99.9% of the network would follow these (artificial) rules.

To forge this into a block chain, some serious development effort would need to happen to ensure only such transactions are allowed.

The point of the OP is, that such transactions are allowed in Bitcoin, but in his/her opinion not desired, so miners should not include them.

To enforce such a rule, a LOT of miners would need to be convinced (as only 50% would just mean that it would take just twice as long until it gets into a block - so it takes 7 instead of 6 blocks to confirm...).

Exactly. Miners can earn more because the new rule will force users to spend there money and there will be more transaction fee generated. I don't think convincing miners will be a issue.

[Vladimir]

I'll quote myself

(and block other 50% of miners who do not conform)

[xenon481]

First the proper place to discuss such topics is Economics subforum.

Second there are already 20+ such threads. I for one enjoy some deflation of deflation critics.

Just ignore this post if the idea have been suggested before.  

[...]I have a very simple suggestion: all the miners and mining pools make an agreement that transaction fee should be a function of activity(or "age") of payer's address/account, which can easily checked by tracing back it's information in old blocks. Old account will spend more transaction fee to make the transaction confirmed, unless the payer build a powerful mining rig and successfully create a block to include that transaction.[...]

This measure is easily defeated.

1. Create two receiving addresses within the same wallet
2. Daily, transfer all funds from one receiving address to the other

Now I am maintaining activity and so do not need to pay these extra transaction fees.

That won't work. As I have mentioned--transaction fee is a function of the age of account(address), which do not means that you wont be charged if your account is a one day fresh account. If you have 100BTC, and you transfer it from one address to another daily, you might be charged 0.1BTC every day--63.5BTC left after one year, or you let your money sleep for one year, and get a 20BTC charged for spending the rest 80, you may definitely prefer the second choice.

OK, so I'll generate a new receiving address every day. You don't know the age of my wallet, all you can know is the age of the receiving addresses. You don't even have any idea what receiving addresses belong to my wallet. And even if you did know the age of my wallet and all of the receiving addresses inside of it, I can always just generate a brand new wallet whenever I wanted.

[Sukrim]

Feel free to do so then, not just outlining some ideas here: convince the pool operators of deepbit, BTCguild and slush as a starter - just head over to the Mining --> Pool section and off you go!

I highly doubt though that they would do this, partially because at least Tycho and slush are early adopters as well...

@Vladimir:
To override someone's blocks, you need to find 2 blocks faster than they find 2 blocks.
This would also mean that the total hash rate of the network is no longer Miners_with_fee + Miners_without_fee but only the portion that is larger. Should this average around the 50% mark, this would be even more disastrous, as blocks would regularly become invalidated by the other fraction. All in all the total hash rate would be cut in half - something that not even miners who want more TX-fees (the current ones are a JOKE, seriously!) would risk. Also it would cut the income of these miners in half, block generations are worth far too much currently (and as it seems also for the upcoming decades!) to make this risk desirable of forcing your ideas by using 51% attacks.

[relative]

OK, so I'll generate a new receiving address every day. You don't know the age of my wallet, all you can know is the age of the receiving addresses. You don't even have any idea what receiving addresses belong to my wallet. And even if you did know the age of my wallet and all of the receiving addresses inside of it, I can always just generate a brand new wallet whenever I wanted.

doesnt matter. when transaction fee is a steady function of time transferring your coins to a new address every day will cost you as much or more than just keeping it where it is.

[Vladimir]

@Sukrim And how this contradicts anything I said? Or are you picking on 50% I mentioned and not 51%?