transaction processing policies

[doldgigger]

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.

Thanks for your support. However, I do wonder if there is any systematic way for finding out the block history of a pool. Maybe mining for them and tracing back the blocks of the payment they send out would work...?

[doldgigger]

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?

I think a somewhat "local" policy of processing feeless transactions is not so bad. Trying to create a global anti-spam policy has already led to the bitcoind defaults crippling micropayments. But a pool operator who processes feeless transactions from his miners has a bit more control - he could kick out those who actually spam, while letting senders of feeless transactions do their work.

On an ideal bitcoin network, I should be able to send a zero-fee one-satoshi transaction and have it processed some day, as long as I don't do so in order to flood the network.

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.

Well, apparently we are already at this point, even though I'm also not convinced that fixing this somehow would increase spamminess. I made a tiny feeless test transaction, and it has been lying around unconfirmed for almost 3 days now.

[doldgigger]

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.

They may not be designed to hinder spamming, but they are used for that at the moment, and this use is also reflected in the vanilla client source. This situation won't change until enough people patch their clients in order to remove that limitation.

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!

I'd say the bitcoin sources are rather straight-forward to understand, so if there is an interest in sophisticated transaction choosing rules, they will get implemented. Myself, I would enjoy experimenting with these things and thereby evolving the fee market, but I'm not currently in the position of running my own pool. After all, this would eat up much of the time I could put into development by forcing me to build it up and advertise it.

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

I think there is a very good reason to include foreign feeless transactions: doing so improves the value of the bitcoin network to users, which will ultimately facilitate a higher exchange rate when trading bitcoins. As mining rewards are high these days, a pool operator who plans long-term will probably be interested in increasing his net gain this way.

[doldgigger]

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. 

So what is the right time to let the free market loose (assuming we are really in the position to decide)??

A pool operator who drives transaction fees up cripples bitcoin, so he also cripples his own profit.

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.

Rather than trying to stop the free market evolve, I think we should focus on exactly the points you are mentioning that are needed: clients should have maximum ability to decide freely. This is also a reason why I put up this thread in the first place. I would hope to improve the transparency of the current pool policies, so everyone can decide which approach he supports. I have enough trust in the bitcoin community's smartness to not abuse this freedom for wrecking the bitcoin network.

[Inaba]

So what is the right time to let the free market loose (assuming we are really in the position to decide)??

When Bitcoin is a self sustaining currency that isn't a few bad press releases from being destroyed.

A pool operator who drives transaction fees up cripples bitcoin, so he also cripples his own profit.

Not in the short term, and that's the problem.  There is a benefit to gathering your profits in the short term to the detriment of the long term.  That's why it's rude and antisocial.  You're putting your own profit motive/greed ahead of what's best for the network as a whole.

Rather than trying to stop the free market evolve, I think we should focus on exactly the points you are mentioning that are needed: clients should have maximum ability to decide freely. This is also a reason why I put up this thread in the first place. I would hope to improve the transparency of the current pool policies, so everyone can decide which approach he supports. I have enough trust in the bitcoin community's smartness to not abuse this freedom for wrecking the bitcoin network.

I agree, it's coming, but it's not here yet... so my argument against it stands.

[doldgigger]

So what is the right time to let the free market loose (assuming we are really in the position to decide)??

When Bitcoin is a self sustaining currency that isn't a few bad press releases from being destroyed.

When looking more closely at the press releases so far, you will notice that the issues reported there are not related to bitcoin-specific things. They stem from long known issues (web security, desktop security etc.) impacting infrastructure used for bitcoin. As bitcoin is decentralized, they can only have limited effect, as they will only create FUD among a subset of (potential) bitcoin users.

People spreading FUD here on the forum are far more dangerous than yet another few bad press releases. So please consider this before continuing to do so.

A pool operator who drives transaction fees up cripples bitcoin, so he also cripples his own profit.

Not in the short term, and that's the problem.  There is a benefit to gathering your profits in the short term to the detriment of the long term.  That's why it's rude and antisocial.  You're putting your own profit motive/greed ahead of what's best for the network as a whole.

Every community has to cope with freeloaders when exceeding a certain size. If bitcoin can really be damaged in a considerable way by the strain of freeloaders you describe, it will be better if it is found out now rather than later when the damage will be greater. This way, we can identify solutions for minimizing the impact on the community as a whole.

Moralizing won't help us here. Instead, it will help if we can actually see the effects you describe, rather than theorizing about them. This way, users will call for solutions, for example through peer pressure: When people are aware of the bad impact certain transaction fee policies have, they will ask for more transparency from pool operators. At some point, a pool operator won't be able to afford not to publish the blocks he creates because users want to protect their investment into bitcoin.

Rather than trying to stop the free market evolve, I think we should focus on exactly the points you are mentioning that are needed: clients should have maximum ability to decide freely. This is also a reason why I put up this thread in the first place. I would hope to improve the transparency of the current pool policies, so everyone can decide which approach he supports. I have enough trust in the bitcoin community's smartness to not abuse this freedom for wrecking the bitcoin network.

I agree, it's coming, but it's not here yet... so my argument against it stands.

Then please elaborate on your argument. So far, I only found a rather negative hypothesis by you, together with an attempt to moralize thnigs in order to avoid facts to be created.

I actually think we do share the same fears when it comes to possible dangers for the bitcoin network, but I would rather see the community find out how far these are based on facts, and find solutions. This will enable the bitcoin network to become even more robust.

[Graet]

 However, I do wonder if there is any systematic way for finding out the block history of a pool. Maybe mining for them and tracing back the blocks of the payment they send out would work...?

The information is all out there blockexplorer but also
http://pident.artefact2.com/block/00000000000009216ef6f30b0028ce4ca7ed65c33bcd833b7b6f41a9bb29d74c
is just that
Click on the block number and it shows you all sorts of good stuff. eg:
Generated BTC: 50.00852746 (includes transaction fees) for each block.

http://ozco.in will be shortly including these transaction fees in payments to miners and these amounts will be displayed on our "More Blocks" page for everyone to see.


The pool I run accepts fee free transactions - I would be a hypocrite using free transactions myself but excluding them from my pools blocks.

[doldgigger]

 However, I do wonder if there is any systematic way for finding out the block history of a pool. Maybe mining for them and tracing back the blocks of the payment they send out would work...?

The information is all out there blockexplorer but also
http://pident.artefact2.com/block/00000000000009216ef6f30b0028ce4ca7ed65c33bcd833b7b6f41a9bb29d74c
is just that
Click on the block number and it shows you all sorts of good stuff. eg:
Generated BTC: 50.00852746 (includes transaction fees) for each block.

I see pident.artefact2.com also shows who found the block. However, I do wonder how this is solved technically. Is it secure to trust this information?

Also, this information is not available for all blocks.

So I think more effort in this direction would be valuable for the community (although this service already looks pretty useful, thanks!)

http://ozco.in will be shortly including these transaction fees in payments to miners and these amounts will be displayed on our "More Blocks" page for everyone to see.


The pool I run accepts fee free transactions - I would be a hypocrite using free transactions myself but excluding them from my pools blocks.

Well, I don't think it is morally bad to exclude free transactions (whoever runs a service like a mining pool should be free to invent whatever resource management policy they find appropriate), but including them is probably a good investment into a prosperous bitcoin economy.

But miners should be able to verify that the pool they are mining for has a policy which they can agree to.