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Author Topic: Proof blocks will always be full if Veriblock price is over 0.00000410 BTC.  (Read 488 times)
nibor
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April 07, 2019, 07:49:55 PM
Last edit: April 11, 2019, 08:56:01 PM by nibor
Merited by Welsh (4), bones261 (2), vapourminer (1), d5000 (1), ETFbitcoin (1), LoyceV (1), Lucius (1), BrewMaster (1), o_e_l_e_o (1)
 #1

EDIT - Correcting after comment on Reddit

With Veriblock currently creating 25% of the tx on the Bitcoin network I realised that now there is a direct relationship between the price of verblock and the expected minimum bitcoin transaction fee.

See this post I made on Reddit for background:
https://www.reddit.com/r/VeriBlock/comments/b847ke/what_determines_how_many_transactions_veriblock/ek9uk91/

The expected tx rate that Veriblock will publish (indirectly via its PoP miners) is:

Tx/Sec= (100000000 x 82.5 x bv ) / ( F x 285 x 30 )

where bv is the price of 1 veriblock coin in bitcoins

and F is the feerate in satoshi per byte.

So rearranging this and assuming maximum tx-rate is 4 tx per sec it means that:

FeeRate = (100000000 x 82.5 x bv) / (4 x 285 x 30) = bv x 240,000

FeeRate is in Satoshi per Byte
bv is price of one VeriBlock coin in Bitcoins.

So if we take the current bv of 0.00001785 we get 4 Sat/Byte.

This is assumes that 100% of the bitcoin network transactions are from Veriblock. It you assume as is currently the case only 20% are then the minimum fee would be 20 Sat/Byte.

This is a floor - as if the fee rate went below that the PoP miners could make money by sending more tx. Also currently they seem to be over excited and are currently publishing a lot more than make economical sense!

Other conclusion is that whilst Veriblock price is above about 1/240,000 there will always be mostly full blocks on bitcoin blockchain. As if the blocks are not full the fee will drop - until the point where Veriblock miners start make money by publishing more transactions. But they can not send tx with a fee less than 1 Sat/Byte as will not get forwarded.

Anyone else agree with my logic?

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April 07, 2019, 08:11:15 PM
 #2

What is Veriblock?
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April 07, 2019, 08:43:22 PM
 #3

They are the reason the number of transactions on the Bitcoin Network went up from 3 -> 4 per second over the last few weeks.

I could try to explain - but think they do it better than I do:
https://www.veriblock.org/

Currently they are just wasting Bitcoin Block space.
Their aim is to help many small altcoins be secure (e.g. help exchanges not get double spent against) - which they can and will do at some point..
Also there is an argument that over the very long term once the bitcoin mining reward becomes very small they could actually help keep the difficulty high - so help secure bitcoin transactions.

But seem to be a few design choices that make it look very inefficient.
1) They have a block every 30 seconds (rather than Bitcoins 10 mins). And there is a reward for publishing a transaction to bitcoin for every one of their blocks. Even though this does not really increase the security of their offering. And means that they transmit 20 times more tx than makes sense (to me at least!).
2) Currently every block creates 30 tx -due to there being many more miners than is strictly required.

Between these 2 issues means they are transmitting 600 times more tx than make sense (one per bitcoin block is all that is needed?). So are causing a big spike in tx fees - about a factor of 10 I think. As they are using up 20-30% of the block space available so everyone is having to up their fees to get tx's confirmed.
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April 07, 2019, 09:18:32 PM
 #4

Feel free to create more block space, it isn't that hard. As a side effect this will end Veriblock's raison d'être.
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April 07, 2019, 09:26:58 PM
Merited by Quickseller (1)
 #5

Feel free to create more block space, it isn't that hard. As a side effect this will end Veriblock's raison d'être.

LOL - I think a few people - e.g. Mike Hearn - would disagree! Increasing the block size is a Brexit like problem - theoretically and practically trivial - but politically seems to be impossible....
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April 07, 2019, 09:39:14 PM
Last edit: April 07, 2019, 09:57:29 PM by tomahawk9
Merited by PrimeNumber7 (1)
 #6

What is Veriblock?
I'm no expert but long story short: Veriblock is a project that, by using their own protocol (Proof-of-Proof), offers a service that allows other blockchains (altcoins) to use Bitcoin's Proof-of-Work (PoW) blockchain and its security to protect them against 51% attacks. Technical stuff aside: they put transactions from other blockchains on the Bitcoin network, that take space in a Bitcoin block, and since Veriblock generates so many tx (as @nibor said in the OP, 25% of btc tx come from Veriblock), it means less space for transactions = fees go up, and this is the main "controversy" surrounding Veriblock.

Someone correct me if I'm wrong, though, don't want to spread misinformation  Cheesy

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April 08, 2019, 03:55:32 AM
 #7

Well https://coinmarketcap.com/currencies/veriblock/ reflects a price of

0.00001698 BTC (-10.74%) which is bigger than 0.0000078 BTC and bitcoins mempool has been cleared many times today

 http://core.jochen-hoenicke.de/queue/#0,24h

What gives?
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April 08, 2019, 04:16:03 AM
Merited by ETFbitcoin (1)
 #8

Well https://coinmarketcap.com/currencies/veriblock/ reflects a price of

0.00001698 BTC (-10.74%) which is bigger than 0.0000078 BTC and bitcoins mempool has been cleared many times today

 http://core.jochen-hoenicke.de/queue/#0,24h

What gives?

OP is not talking about transactions mempool, he is talking about transactions in blocks that belong to Veriblock. the mempool spike was mainly because of the price rise and now that it has once again become more stable mempool is also smaller. if price continues spiking then the mempool will also grow big again.

as for these "spams" they have been happening for a very long time, both with OP_Return outputs and with a lot of different similar methods (example) but people only find out about them on "social media" every time there is a fee spike. other times they don't know and they don't care!

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April 10, 2019, 10:04:14 PM
Merited by ETFbitcoin (1), o_e_l_e_o (1)
 #9

Interesting. I think your logic is mostly correct, OP. Don't really like that.

But I think in the medium to long term they will ruin their own business model, like SatoshiDice did, when fees become higher again (to what they're contributing). Also, I guess that Veriblock is currently seeing the typical "altcoin start bubble" and price is already falling (despite the general bullish crypto panorama), when the price continues to fall then Bitcoin spamming will becoming less attractive.

Pro tip for Veriblock devs Wink : What about spamming another strong blockchain, e.g. LTC or Ripple? They should be secure enough for their purposes (ETH is often even more expensive than BTC) and are much cheaper.

@pooya87 is partly right, there are several other projects inserting data into the blockchain. The problem with Veriblock is that there is a strong financial incentive to do that, while in other projects data insertion means mostly a cost. As I wrote however, I don't think it's sustainable, so I hope that the problem soon will become history again.

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April 11, 2019, 08:34:05 PM
Merited by LoyceV (2)
 #10

I also thought they should change their reward mechanism.

At the end of the day one transaction per bitcoin block is all they need to get all the benefit they are after.

I just think they should:
1) Only reward the 5 highest ranked tx in any one Bitcoin block. To rank them just:
 a) Sort by which of their blocks the PoP stamp (most recent is highest rank).
 b) Then by transaction fee.

2) If a Bitcoin block has no transactions in it then roll the reward into the next.

3) If there were more than 3 transactions rewarded in the last bitcoin block decrease the reward in the next block by 0.1%. If there were less than 3 transactions in the block increase reward by 0.1%.


This way they would maintain about 3 tx per block (rather than the current 600!) and have the same security benefits for their chain. Would also reduce the sell pressure on their coin so increase the value. And as the relative value of BTC vs Veriblock changed they would not end up with such huge numbers of transaction - nor if it crashes would they end up with none!

This reward profile would also encourage miners to Replace-by-fee each transaction as a new block appeared on their chain....

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April 12, 2019, 02:57:28 AM
 #11

Veriblock can make a big difference after the Bitcoin block doesn't mine rewards, and it will encourage miners to maintain Bitcoin's main network security.
 In addition, the lightning network will play a role in trading, and I think Bitcoin is only the settlement layer in the future.

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May 10, 2019, 08:23:24 PM
 #12

Price now down to 0.00000590 BTC so close to the lower limit whereby we have guaranteed full BTC blocks.
And they are now only using 2%.

So as long as the price stays low (vs BTC not USD) think their impact on blockchain usage will continue to decline.

Especially while fees well over 1 sat/byte minimum!

They are currently making about 16225 satoshi per tx from the Veriblock reward and costing them double that e.g. https://www.blockchain.com/btc/tx/17719F865DCF904EC63FC80A6665051E8569FEC34B19777412D697BF28894154
cost 32000 Sat in fees!

So I think the miners are losing about USD 10k a day!

Currently fees are about 100BTC per day - so 2% is 2 BTC per day.
82.5*2*60*24* 0.00000590 = 1.4BTC so are losing 0.6BTC per day = losing 4000USD per day.
But probably they are paying more than average fees - hence the extra loss...

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May 14, 2019, 06:10:52 AM
 #13

Down to 0.00000393 now so below the magic point where blocks will always be full due to Veriblock...
So nothing to worry about any more! Market sorted out the problem.
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July 08, 2019, 04:04:37 PM
Merited by DarkStar_ (4), malevolent (1), d5000 (1), PrimeNumber7 (1)
 #14

Now down to 0.00000271 so pop mining massively loss making.

Their web site is still claiming they are 20% of bitcoin Tx's which I now really cannot believe.
As that would be costing 200k per day in fees and they would only be getting at most 15k-20k of that back in Veriblock coins...

Beginning to think their block-explorer is lying...
https://explore.veriblock.org/network-stats

As that would imply 20ish endorsements per block. But when I scroll back over the last few 100 blocks looks more like 1 or 2.

I think that their front page is counting ALL OP_RETURN txs. But most are from Omni:
http://www.omnilayer.org/
https://omniexplorer.info/

And can verify this here:
http://coinsecrets.org/
(Ones starting with LP seem to be Veriblock).

So Omni is the problem not Veriblock.

Veriblock is only using 0.5%-1% of tx's - which is consistent with the price at the moment.
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July 11, 2019, 05:05:06 PM
Merited by DarkStar_ (4)
 #15

Very interesting analysis, thanks for sharing.

Beginning to think their block-explorer is lying...
https://explore.veriblock.org/network-stats

As that would imply 20ish endorsements per block. But when I scroll back over the last few 100 blocks looks more like 1 or 2.

Looks like the Endorsement Rate is now showing 2.23 / block on https://explore.veriblock.org/network-stats

It could have been a bug, or perhaps it was a result of a lagging moving average calculation. I wasn't able to find any source code for their explorer at https://github.com/VeriBlock so it's not clear how exactly they are calculating that endorsements figure they display.
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July 17, 2019, 04:08:12 PM
 #16

Looks like the Endorsement Rate is now showing 2.23 / block on https://explore.veriblock.org/network-stats

It could have been a bug, or perhaps it was a result of a lagging moving average calculation. I wasn't able to find any source code for their explorer at https://github.com/VeriBlock so it's not clear how exactly they are calculating that endorsements figure they display.
The endorsement rate has further gone up to 8.37 / block as of current time.

What is bugging me is that the Longest recent block time was 1.7 min a few minutes ago and now when I reloaded the page it became 4.0 min.
I think there is a bug on this site.
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July 18, 2019, 08:13:41 AM
 #17

Next February the next Halving is coming. The tx fee is going to soar. The business model of Veriblock is going to become obsolete with time.

To secure your altcoin blockchain, it is quite simple. You need to control the mining through the pools. If you let anyone mining your coin, then you open the door to all kind of attacks. Not all miners are wanted, specially the ones trying to hack and create a prejudice. Controlling the mining through the pools is both a way to give to the author a remuneration and also a way to avoid any kind of attack based on hashing power.

Also by controlling the mining you can limit the hashing power necessary to mine, which saves electric and share the benefit of mining with more people, specially newbies who are not equipped with ASICs. You can control the maximum difficulty via this hashing limits.

No need to pollute the Bitcoin Blockchain to secure the new blockchains.

Actually the Bitcoin core team should limit the transactions by blocking the tx value under a certain number of Satoshi, they could calculate this from the predicted transaction fee. If a transaction is too low, considering the current suggested transaction fee, then the consensus is not met. This would kick Veriblock out of their game.

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July 22, 2019, 05:48:15 AM
 #18

I believe Veriblock should data-spam BitcoinCash like what Vitalik Buterin is proposing to do in Ethereum, https://ethresear.ch/t/bitcoin-cash-a-short-term-data-availability-layer-for-ethereum/5735

It's time to put some usage in all that empty space, per block, in their blockchain. Cool


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