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Author Topic: transaction processing policies  (Read 2422 times)
doldgigger
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July 12, 2011, 08:36:11 PM
 #1

It gets more and more hard to mine without a pool, at least if you're unwilling to put long-term dedication into bitcoin. However, by joining a pool, miners risk to give up their responsibility for participating in the transaction fee market.

I wonder if there is an overview about the different transaction processing policies the different pools use, so miners could decide which pool most closely matches what they agree with.

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July 12, 2011, 11:46:14 PM
 #2

This wiki page lists most pools and indicates which keep the fees for themselves (hint: almost all of them)

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

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Sukrim
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July 12, 2011, 11:54:48 PM
 #3

No, the OP means something like Eligius' policy of: "We include only transactions that have at least x BTC/kB fees"

Since there is no really easy way currently to set this, besides Eligius (where the operator seems to have hacked already a bit into bitcoind) I don't know of any pool that has such policies. These would be needed imho though, but since only miners are the ones that want to see transaction fees, I guess until at least a few bigger pools switch to something like this you can safely assume that the rules of vanilla bitcoind are also the rules of the mining pools.

As ewal pointed out, most pools keep transaction fees to themselves anyways.

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cuqa
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July 13, 2011, 12:37:47 AM
 #4

so you agree with real 0% fee bitcoin pools and obviously demand high hash speed, 24/7 service and professional websites.

sorry, but how unsocial is that kind of thinking please. transaction fees are tiny as fuck anyways and once the time will come and transaction fees become a major part pools will adjust.
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July 13, 2011, 12:50:07 AM
 #5

so you agree with real 0% fee bitcoin pools and obviously demand high hash speed, 24/7 service and professional websites.

I'm not 100% sure if you read/understood my post and the post of the OP...

Currently pools decide which transactions their miners are signing. Nearly no pool tells however what cireteria they set to include transactions!

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1bitc0inplz
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July 13, 2011, 12:56:50 AM
 #6

If you're looking for the input from a pool on what their transaction fee rules are, perhaps I can offer some assistance.

My pool's logic on which transactions to include in a block is that of the vanilla bitcoind. So, this means that free transactions do have a fighting chance of being included in any blocks we solve.

Here is an example of a block we solved: http://blockexplorer.com/b/133476

On that subject; Even if a pool operator is silent about what their rules are, one could make some guesses by simply going to that pool's round history page and viewing a solved block in block explorer.

I don't know if that helps the OP in any way, but I thought I'd offer my insight.

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July 13, 2011, 01:05:45 AM
 #7

As you only keep transaction fees - why the hell do you include free transactions, thus rewarding them?

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July 13, 2011, 01:17:48 AM
 #8

As you only keep transaction fees - why the hell do you include free transactions, thus rewarding them?

My opinion on the matter is that there are better things to worry about than hacking up bitcoind to earn a few extra bitcents. I also believe that the way that bitcoind is written is kinda smart, it allows the market itself to dictate the transaction fee price.

Any small to medium sized pool that actually thinks that they can make a net profit off of transaction fees is probably misleading themselves. Because of this, I'd rather spend my efforts improving my pool in-general and trying to create worthwhile "value-add" features that my members would be willing to pay for, than to hack-up bitcoind to exclude free transaction.

Again, just my opinion on the matter.

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July 13, 2011, 02:19:14 AM
 #9

My pool is including many free transactions, usually limited to 50-100 Kb of them per block. I would like to keep TXes free as long as possible :)
Transactons with fee 0.01 or more are considered "non-free" and have higher priority.

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doldgigger
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July 13, 2011, 09:16:21 AM
 #10

so you agree with real 0% fee bitcoin pools and obviously demand high hash speed, 24/7 service and professional websites.

sorry, but how unsocial is that kind of thinking please. transaction fees are tiny as fuck anyways and once the time will come and transaction fees become a major part pools will adjust.
Well, my apologies if my posting was unclear. I'm just seeing that there is no complete consensus about how high transaction fees should be, how to handle dust spam etc. So I think this is something that should just evolve, by network participants trying out different settings, or recompiling their clients with different minimum limits. But this won't work if they just donate their computing power to pools without knowing what the pool owner does about transaction fees. Maybe we can get to a point where pool owners regularly advertise their transaction fee policies, and some diversity is created. Evolution of transaction fee policies is something that has to come, at least when the mining rewards are lowered, but I think it is already advantageous if we try out these mechanisms today.

I do not care about the transaction fees being shared with the pool participants or not. This will only become interesting when it is about more than 1% of the total block reward.

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doldgigger
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July 13, 2011, 10:51:07 AM
 #11

As you only keep transaction fees - why the hell do you include free transactions, thus rewarding them?
I think the possibility of doing free transactions adds to the value of the bitcoin economy. Ultimately, it might lead to better exchange rates when trading bitcoins, or have other favourable long-term effects for people using bitcoin. So I don't think it is all clear that having a transaction-fee-only policy is economic to do when creating blocks.

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July 13, 2011, 09:04:34 PM
 #12

I send out feeless transactions a lot, especially when sending out payments from my pool to the miners.  Why would I want to not include free transactions when i'm taking advantage of them myself?  It's a) irresponsible, b) anti-social and c) just plain rude to skip free transactions as a pool operator, especially when the transactions you send out to pay your miners are sent out as free.  You're leeching off everyone else who is processing free transactions by doing that.

I would boycott a pool that did that, as a matter of fact.  If and when the time comes that there's a problem with free transactions causing a disruption, then you can revisit that, but until such time, doing that is just obnoxious and contrary to the whole community.


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July 14, 2011, 11:37:15 AM
 #13

I send out feeless transactions a lot, especially when sending out payments from my pool to the miners.  Why would I want to not include free transactions when i'm taking advantage of them myself?  It's a) irresponsible, b) anti-social and c) just plain rude to skip free transactions as a pool operator, especially when the transactions you send out to pay your miners are sent out as free.  You're leeching off everyone else who is processing free transactions by doing that.

I would boycott a pool that did that, as a matter of fact.  If and when the time comes that there's a problem with free transactions causing a disruption, then you can revisit that, but until such time, doing that is just obnoxious and contrary to the whole community.

Any pool can include it's own transactions in it's own blocks for free as it pleases. I bet other pool operators would do the same for their colleagues, so this point is really not valid. Why include transactions of non-miners for free, who do cost you storage space + processing time but just leech on your (and - since nearly everyone has the full uncompressed blockchain currently - actually EVERYONES) ressources doing so?!

In fact the reason that they require transaction fees for all their transactions (even though they are MUCH smaller than the official client charges!) is the main reason I mine on Eligius.

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July 14, 2011, 11:47:40 AM
 #14

Why?  Because it's the courteous thing to do, which I've already stated. 

You are just being an asshole by not processing feeless transactions, especially small transactions where .01 BTC is a significant portion of the transaction.  I have no doubt that's why you mine on Eligius, because it increases your profit.  So your greed is the motivating factor, not the advancement and acceptance of Bitcoin. 

Your claim that pool operators could include their own transactions for free is somewhat ridiculous in the face of 1.5 million difficulty, since it can take a long time to solve your own block, especially for the smaller pools.  And you betting that other operators would do the same for their colleagues is also somewhat ridiculous - each pool operator should somehow make custom additions to their block acceptance for every other pool out there?  Seriously?    You really think that's going to happen?

Again, not processing legitimate feeless is just rude and anti-social at this point in time.  When spamming becomes a serious problem you might have a case, but not right now.

If you're searching these lines for a point, you've probably missed it.  There was never anything there in the first place.
btcboston
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July 14, 2011, 11:54:00 AM
 #15

Minimum transaction fee on Eligius is only 0.00004096 BTC per 512 bytes, which is really not so bad.  I agree with you that pools should be accepting free transactions right now, but, to say that it is based on greed is a bit of an exaggeration when they are willing to process transactions with very tiny fees.

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July 14, 2011, 11:58:43 AM
 #16

I have no doubt that's why you mine on Eligius, because it increases your profit.

Eligius only pays out the 50 BTC generated, not transaction fees.

Compared to a lot of other pools, I do earn more though, since they are hopping proof and have one of the lowest variances possible.

Transaction fees are NOT designed to hinder spamming but to compensate miners (currently rather pools... as they usually don't pay them out). Every time you add a 1 kB feeless transaction, with ~20 000 nodes in the system this creates a need to transfer and store ~20 MB of data forever(!) + some CPU cycles to verify this transaction 20 000 times.

As long as deepbit for example anyways wants to keep free transactions, you can set YOUR accepted transactions to anything you like - they own ~50% of the network (give or take a bit) so the maximum delay of a free transaction would be anyways just 1 more block at most.

I think you just didn't read sufficiently through the Bitcoin ressources: transaction fees are designed(!) to be an open market and have competitive prices. The only problem right now is, that it's not really easy to include custom/complex rules on which transactions to accept and which not, as the current client is a mixture of a client for end users with a nice GUI and pool operators (with that ugly "getwork" system) at the same time. As soon as dedicated pool operator clients show up, I expect this to change. A lot!

Edit:
@btcboston:
Why exactly should any pool accept free transactions from non-miners?

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July 14, 2011, 01:24:45 PM
 #17

Eligius only pays out the 50 BTC generated, not transaction fees.

Compared to a lot of other pools, I do earn more though, since they are hopping proof and have one of the lowest variances possible.

How do they have a low variance beyond hashrate? 

Quote
Transaction fees are NOT designed to hinder spamming but to compensate miners (currently rather pools... as they usually don't pay them out). Every time you add a 1 kB feeless transaction, with ~20 000 nodes in the system this creates a need to transfer and store ~20 MB of data forever(!) + some CPU cycles to verify this transaction 20 000 times.

Yes, I agree that is what it's designed for and it's also stated in the documentation (or FAQ or wherever) that at the current stage, the fees are not really relevant.  My contention is they are, beyond not being relevant, a hindrance to the acceptance of Bitcoin.  If I, as a user, have to pay a fee to send a .05 BTC transaction, it hardly becomes better than Paypal.  As someone more involved in the Bitcoin community, I know it's better than Paypal, but Joe Average user is going to be pissed.

Quote
As long as deepbit for example anyways wants to keep free transactions, you can set YOUR accepted transactions to anything you like - they own ~50% of the network (give or take a bit) so the maximum delay of a free transaction would be anyways just 1 more block at most.

This is a cogent argument and I appreciate it.  However, what if Deepbit decides to change that policy?  Just because someone is willing to do the right thing at this time and process free transactions, it's ok for others to be leeches and build their policies and greed off of that largess?  Again, we get back to being just plain rude and greedy.  "Someone else is cleaning up the park, so we don't have to."

It's everyones job to keep the place clean;  Just because their are people walking through the park picking up trash doesn't mean it's ok to throw your trash on the ground.

Quote
I think you just didn't read sufficiently through the Bitcoin ressources: transaction fees are designed(!) to be an open market and have competitive prices. The only problem right now is, that it's not really easy to include custom/complex rules on which transactions to accept and which not, as the current client is a mixture of a client for end users with a nice GUI and pool operators (with that ugly "getwork" system) at the same time. As soon as dedicated pool operator clients show up, I expect this to change. A lot!

We are not at the point where we should be letting the free market decide things, nor are we at the technological level where we can let the free market reign.  As you said, the getwork system is ugly and clients should be in control as to what they process and what they don't.  Pools should be a dumb conduit for that.  A pool operator deciding unilaterally whether or not to only accept non-free transactions is motivated by greed/profit.  I'm not sure how you can possibly spin that any other way - the only reason not to process free transactions (barring a spam attack) is because you want money for it and do not want to philanthropically support the infant BTC. 

That in and of itself is fine for end users, but I don't think pools should do that.  The thing is, most users don't understand the philosophical and technical underpinnings of a pool deciding whether or not to accept fees, so letting the free market decide is not really a viable option at this point.  Once there's a client (and pools) to support client decision on whether or not to process the transaction, then I think we will be ready to move on to choosing to support feeless transactions or not.  But until then or until Bitcoin gains much, much wider acceptance, not processing feeless transactions is anti-social and detrimental to the Bitcoin movement.

If you're searching these lines for a point, you've probably missed it.  There was never anything there in the first place.
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July 14, 2011, 02:37:06 PM
 #18

How do they have a low variance beyond hashrate? 
They use SMPPS as payout system.

If you pay 0.00005 BTC for a 0.5 BTC transaction, that's a 10000th (or 0.01%) of the amount as fee. Compare this to the usual "xx cents + yy% per transaction" structure of Paypal.
Also people are used to payying small fees - if you advertise Bitcoin as being more secure than Paypal (no chargebacks) but with only half the fess I doubt they will be pissed.
If you market it currently as "nearly every transaction is FREE!" and then (I predict latest when the reward gets cut in half) pools will start to require fees people will be either pissed because now they have to pay or that it takes forever for their free transactions to be confirmed.

I'd even say having free transactions now for the masses is even WORSE for bitcoin than requiring by default a 0.0001 BTC fee for each transaction by default in the mainline client. Free transactions now are going to be a thing of the past/an impossibility in the future and will lead to even more hate against early adopters (which we all currently still are) who didn't just get half of all Bitcoins available distributed amongst themselves but also could transfer them for free!

Again: People accept fees in nearly every monetary transaction. Lowering them as an incentive to use BTC is ok, eliminating them temporarily jsut for the beginning is plainly stupid.

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July 14, 2011, 04:00:33 PM
 #19

How does SMPPS change your variance? 

Does the mainline client allow sub tenths fees?  I haven't looked in awhile.  Regardless, though, just because people are used to paying small fees does not mean it's right or good.  I'd argue, in fact, that we should be working towards NOT charging fees, or at least not REQUIRING fees as the default mode.  In fact, the current direction of Bitcoin is, in my opinion, the right way to go - fees are not required, but if you want them processed faster then pay a fee, the higher the fee the faster it gets processed.  Getting people used to paying for speed/enhanced features is what we should be working on, not getting them used to being gouged and nickle and dimed to death at every single turn.

I don't see any hate being generated for feeless transactions.  If we impress upon them that this is FREE, but may take awhile, if you want it faster pay a fee, then they will be fine with that.  On a personal level, I have some transactions that I don't care how long it takes to really get incorporated into the block chain and thus I resent having to pay a fee... however, if I need the funds confirmed RIGHT NOW,  I would be willing to pay a small fee for that privilege.  But I (would) highly resent being charged that fee even if I don't care if it takes several hours to show up in the chain.

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July 14, 2011, 05:50:32 PM
 #20

How does SMPPS change your variance? 
It basically eliminates it as every share is worth the same amount (while proportional/scored shares are dependent on pool luck + size) of BTC.

Does the mainline client allow sub tenths fees?  I haven't looked in awhile.  Regardless, though, just because people are used to paying small fees does not mean it's right or good.  I'd argue, in fact, that we should be working towards NOT charging fees, or at least not REQUIRING fees as the default mode.  In fact, the current direction of Bitcoin is, in my opinion, the right way to go - fees are not required, but if you want them processed faster then pay a fee, the higher the fee the faster it gets processed.  Getting people used to paying for speed/enhanced features is what we should be working on, not getting them used to being gouged and nickle and dimed to death at every single turn.

I don't see any hate being generated for feeless transactions.  If we impress upon them that this is FREE, but may take awhile, if you want it faster pay a fee, then they will be fine with that.  On a personal level, I have some transactions that I don't care how long it takes to really get incorporated into the block chain and thus I resent having to pay a fee... however, if I need the funds confirmed RIGHT NOW,  I would be willing to pay a small fee for that privilege.  But I (would) highly resent being charged that fee even if I don't care if it takes several hours to show up in the chain.

In fact the current standard fee is "sub tenth"...

In the not too distant future it might not just take "awhile" but these transactions could hang in limbo forever. There are for example still some outstanding transactions from the beginning of may in the network, that noone touched yet. That is the real issue and concern of mine. It won't take long until EVERY transaction has to have at least a tiny fee associated with it to ever be integrated in the blockchain. This is also planned behaviour for the future, so there is NO way around having fees in the long run if you still want to have miners.

The current situation is a nice and shiny early-adopters world we're living in. However if the users now get used to 0 fees, they will (rightfully) demand this in the future too. This has to stop as fast as possible if you want to keep Bitcoin around in the future, or users will just flee to an "inflationcoin" alternative, that just pays miners constantly, but this way can keep transaction fees at 0 (since the inflation rate in this system then would be the "hidden" transaction fee). from a user's perspective that alternative system would still be 100% comparable to Bitcoin (as ~2% inflation per year is anyways standard in current economy) but "cheaper", since transactions will never need to require transaction fees.

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