Transaction Accelerator Services, Is it fair for the miners?

[mikeywith]

Today, most large pools offer transaction accelerator service for a large fee, I know Viabtc does not give the miners any portion of that revenue and it's safe to assume that most other pools don't.

Isn't that like stealing miners' profit given that including transactions with low fees lowers the miners' income?

If it's hard to understand think about it this way, let's say there are a million transactions waiting for confirmation, all of them are paying 100 sats per Vbyte, and someone pays to the accelerator their transactions which they paid only 50 sats/vbyte, but because he pays a ton for fees the pool will include their transactions instead, and if we hypothetically assume the size of those paid transitions take half the block, the total rewards for the transactions fees will be cut by 25%, in other words, the pool "steals" 25% from the miner's profit in respect to the transaction fees, which could be 1% or 20% or any other number depending on how many transactions are pending and how much are they willing to pay, we have seen 3BTC block fees in the recent past, 25% of those 3 BTC is a lot of profit lost.

The effect could be less on FPPS but most PPS pools are rather PPS+ and the transaction fees are paid in PPLNS rather than PPS, I do not have a clue on how large this business is, but I believe it's only fair for the pool to keep a certain percentage and pay the rest of the transaction accelerator revenue to the miners.

What do you think?

[xhomerx10]

None of those pool miners are forced to use the pool and it is relatively cheap not to mention direct advertising for the accelerator which produces a revenue stream.

[philipma1957]

Today, most large pools offer transaction accelerator service for a large fee, I know Viabtc does not give the miners any portion of that revenue and it's safe to assume that most other pools don't.

Isn't that like stealing miners' profit given that including transactions with low fees lowers the miners' income?

If it's hard to understand think about it this way, let's say there are a million transactions waiting for confirmation, all of them are paying 100 sats per Vbyte, and someone pays to the accelerator their transactions which they paid only 50 sats/vbyte, but because he pays a ton for fees the pool will include their transactions instead, and if we hypothetically assume the size of those paid transitions take half the block, the total rewards for the transactions fees will be cut by 25%, in other words, the pool "steals" 25% from the miner's profit in respect to the transaction fees, which could be 1% or 20% or any other number depending on how many transactions are pending and how much are they willing to pay, we have seen 3BTC block fees in the recent past, 25% of those 3 BTC is a lot of profit lost.

The effect could be less on FPPS but most PPS pools are rather PPS+ and the transaction fees are paid in PPLNS rather than PPS, I do not have a clue on how large this business is, but I believe it's only fair for the pool to keep a certain percentage and pay the rest of the transaction accelerator revenue to the miners.

What do you think?

As a miner I can tell you you are correct.

But and this is a huge but. It cost a lot of money to muscle in a paid transaction.

My guess is a sender will only do it one time and never make the mistake again.

So my guess is the paid one is not used much.

Now the free one can be used 2400 times a day.
100 at each hour.

So they require 14 sats a byte minimum to have your free posted.

if the fee is currently 100 they are absolutely taking

2400 x 86 sats per byte each day.

I think the math is

2400 x 227 x 86 = 46852800 sats or

.46852800 a day

now the larger fees are on that day the higher that number is.

the lower fees are on that day the lower that number is.

it absolutely lowers fees for miners.

[mikeywith]

None of those pool miners are forced to use the pool.

The thing is most miners do NOT know about this, or they have no idea that this actually affects their profit, and since nobody has complained about it, the pools think it's okay to do it.

My guess is a sender will only do it one time and never make the mistake again.

Transactions get stuck for so many reasons, some wallets miscalculate ( or rather misestimate) the best fees to be paid, transactions with higher fees could show up in a few seconds right after your transaction is broadcasted, in many cases, you pay enough fee to be included in say 1-6 blocks, suddenly BTC price fells, people rush to send their coins to DEXes and wala, your transaction gets pushed down to the bottom of the list.

However, I do agree that it isn't something that happens in every block, maybe no even every day, but it does happen, profit loss is profit loss, whether it is 1$ or $1000.

So my guess is the paid one is not used much.

I think we can get a rough estimate by extracting transactions with very low fees that get accepted in blocks full of other transactions with a lot higher fees or when there have been higher fees transactions pending.

Example:

Block 111111 contains 20 transactions paying 5< sats, all other transactions paid 50 sats, and the mempool at that time had 100,000 pending transactions with 50> sats, those 20 transactions can be "assumed" accelerated, and the minimum loss of miners would be :

(The total size of those 20 transactions * 50 sats) - (the transaction fees for those 20 transactions)

To get the maximum loss we can do

(The total size of those 20 transactions * maximum fees pending at the time of the block) - (the transaction fees for those 20 transactions)

But that will be a lot of work, the easier approach would be getting the average fee and any transaction that has a much lower fee is to be assumed accelerated, this will have a lot less accuracy but we can at least can an estimation of how much miners are losing, because as it stands right now, we don't know, it could be 0.5BTC a week, or 10 BTC a day.

Moreover, it's more than just the "lost" profit that comes as a result of including the transactions of low fees, it actually the profit that these pools generate, they charge A LOT more than what you could have paid to be included in the next block, so the profit is big and miners should be the once earning it not the pool.

[LoyceV]

I know Viabtc does not give the miners any portion of that revenue

I didn't expect that, especially since miners lose revenue because of ViaBTC's free transaction accelerator too.

Isn't that like stealing miners' profit given that including transactions with low fees lowers the miners' income?

If they know up front, it's not stealing

What do you think?

If transaction acceleration would be a big business (which I don't expect it to be), this would be an even bigger reason as a miner to join another pool: Every low-fee transaction included by ViaBTC means a transaction with a higher fee is left for other mining pools.

I got here because of your PM, asking if I can estimate how many transactions in a block are getting accelerated. That's going to be tough, since miners are basically free to include any transaction they want, which could include their own transactions too.
I don't have this data, Blockchair's Database Dumps only include fee data per block, not per transaction.

[ranochigo]

It probably isn't that the miners don't know, just that they couldn't be bothered about it. If all of the pools don't bother to compensate the miners for this, then they would have no choice either.

In actual fact, the acceleration service is ridiculously expensive. In certain cases, people can just buy more Bitcoins and send them for the price of the acceleration. If you have a very big transaction, then there isn't a point trying to accelerate it. Else, RBF or even CPFP would be way more convenient and this should be considered as a fallback in case both of them is not possible. The market for transaction acceleration isn't particularly big in the first place. It isn't ethical for the miners to not be compensated, but at the same time there isn't any way to prove that the miners are receiving their fair share. Including a lower fee transaction may or may not mean that the transaction is accelerated.

Perhaps you can setup a tool to monitor this but unless it gains any traction among the miners, nothing will be enforced.

ViaBTC accelerates quite a few transactions for free as a political statement; Bitcoin needs a block size increase. You can see it on their page so doing something like this at the expense of their miners isn't very ethical in the first place.

[mikeywith]

If they know up front, it's not stealing

I can't speak for all miners but I am certain that most don't know about the service in the first place or fail to understand that it actually reduces their revenue, maybe stealing isn't the best word to describe this behavior, and those pools probably have something buried in their ToS to keep them safe, but you get the point.

[LoyceV]

I can't speak for all miners but I am certain that most don't know about the service in the first place or fail to understand that it actually reduces their revenue, maybe stealing isn't the best word to describe this behavior, and those pools probably have something buried in their ToS to keep them safe, but you get the point.

If it's in the ToS, it's the miners' own responsibility if they don't know about it. And they are of course free to join another pool if that one pays significantly more (which I doubt).

[mikeywith]

If it's in the ToS

I have checked Viabtc and Poolin, both don't mention anything about transactions accelerator in any shape or form in their ToS, it looks like they think it isn't a big deal and they can get away with it and nobody would complain about it.

Anyway, it's not like I am NOT expecting a 50% more profit if these pools stop including low fee transactions, I just think that it's very unethical to affect the miners' revenue by profiting from a service which you don't share any of its profit with the miners who are once providing them with the tools needed to conduct such business.

[philipma1957]

It probably isn't that the miners don't know, just that they couldn't be bothered about it. If all of the pools don't bother to compensate the miners for this, then they would have no choice either.

In actual fact, the acceleration service is ridiculously expensive. In certain cases, people can just buy more Bitcoins and send them for the price of the acceleration. If you have a very big transaction, then there isn't a point trying to accelerate it. Else, RBF or even CPFP would be way more convenient and this should be considered as a fallback in case both of them is not possible. The market for transaction acceleration isn't particularly big in the first place. It isn't ethical for the miners to not be compensated, but at the same time there isn't any way to prove that the miners are receiving their fair share. Including a lower fee transaction may or may not mean that the transaction is accelerated.

Perhaps you can setup a tool to monitor this but unless it gains any traction among the miners, nothing will be enforced.

ViaBTC accelerates quite a few transactions for free as a political statement; Bitcoin needs a block size increase. You can see it on their page so doing something like this at the expense of their miners isn't very ethical in the first place.

Yeah but I use their free service quite often.

especially when fees are stupid high so for the loss in mining earning I make back a lot in the fees I save.

Ie I get a 14 sat on 2000 byte send vs 100 sat on a 2000 byte send

I save 86 x 2000 = 0.00172000 btc in savings and if fees are running  at 100 sats 100 x 2000000 = 2.00000000 btc a block

so they do pay a lot of the block fees sometimes we get 130% payout days.

If you really analyze it if a miner never shifts his Btc mined  at viabtc.com ie say 1 payout a month he won't save a lot on using the free acceleration.

Have I used it enough well maybe maybe not but I have used it over 50 times since 2016

[OgNasty]

None of those pool miners are forced to use the pool.

The thing is most miners do NOT know about this, or they have no idea that this actually affects their profit, and since nobody has complained about it, the pools think it's okay to do it.

Ignorance isn’t really an excuse. The pool got themselves into a position to be able to offer this service and they’re taking advantage of it. The miners are free to solo mine or use a different pool.

I agree it would be great for miners to get a piece of this action, but I think we’ll see Facebook start paying users a share of advertising revenue before mining pools start sharing revenue from their earned market position with miners.

[btc2marspro]

if you pursuit honest and fair mining, why not use https://kano.is? No funny business behind as it is as open and transparent as it can be and even able to know how much the pool earn from you.