Miners that refuse to include transactions are becoming a problem

[Mike Hearn]

It might be worth somebody contacting the ISP providing bandwidth to the errant node and asking them to investigate.

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[Sukrim]

I don't really see the problem - as mining is planned to be a free market, it took actually longer than I expected until someone found out that the added complexity and electricity used pool-server wise with getworks and whatnot is probably not even matched by the income from these laughable transaction fees.

If you want to battle this, set the default transaction fee to 1 BTC for example - then it would be VERY worthwile to include transactions as well to collect the fees, even for Botnets and not including transactions would hurt a lot.

The only hurtful thing that empty blocks do, is increasing the difficulty by their hashrate used. On the other hand probably one day these coins will be spent and given back to the network - especially the "proof of stake" fans should be happy about someone getting 15% of all new coins.

tl,dr: higher transaction fees = more incentive to include transactions in blocks, as always.

[Revalin]

The only hurtful thing that empty blocks do, is increasing the difficulty by their hashrate used.

It increases the time-to-first-confirm - if the "null blocks" rate grows to 90%, the average time to first confirmation will be nearly two hours!

It may also make double spends easier.

[nedbert9]

I'm quite surprised that all invested, relatively honest miners are not taking issue with botnets.  I've read a number of miner's opinions and many seem to be dangerously cavalier on the subject of botnet participation in Bitcoin's core infrastructure.

IMO.  A few bullets to address some posted opinions.

- "Cheap" botnet operators do not equate to legitimate participants in a free market. 
- Free loading botnets do not equal "Cheap," business operators.
- A botnet is not a business doing "good business."
- An absense of botnets does not equate to block chain insecurity.

Botnets are an unhealthy rationalization of Bitcoin security.  IMO, the discussion on the matter of botnets should not be limited to technical impact on Bitcoin.  Trading for security of one aspect (IMO, an unnecessary contribution to security) while trading away reputation of Bitcoin's core infrastructure as substantially supported by criminal entities.  Consumers, by and large, are particularly sensitive to the perceived honesty of an organization they do business with.  For the fledgling Bitcoin botnets are not something we want newcomers to worry about.  Whether or not the consumer's/user's perception of botnet risk is accurate, they will judge Bitcoin based on the knowledge that Bitcoin's existence partially relies on criminal activities.
Do you think the average consumer, let alone the coffee house, will like using Bitcoin to pay for a latte if they are aware of the above?

Botnets do not equate to business conducting good business as some have mentioned. 
Profit being the single interest of business necessitates law and regulation.  The no TX botnet is a prime example of a business where it's only consideration is profit that, currently, is not required to operate as a legitimate business thus giving advantage above all other parties who have decided to operate within legitimate parameters.  At worst botnet inclusion could recruit further exploitation.
On the flip side if botnets are not considered a threat in any respect, e.g. total network hashing, reputation, and instead are considered a positive contribution to block chain security they are indeed an insult to those who support Bitcoin through legitimate means, have expenses and follow the Bitcoin protocol in an honest manner.

Any entity that profits with all expenses being externalized, i.e. not obligated to pay for expenses, while typically great for the business is systemically unhealthy to the populous and the economy.  This is well understood economic principle.  A monopoly of a market in specific terms of having almost all expenses externalized is not a good example of a good free market.

Botnets, as the 15% total hashrate no TX botnet, is an exploitation of the temporary hashing subsidies of Bitcoin.  It's the truth even though there are multiple ways to rationalize botnet participation in Bitcoin.

[DeathAndTaxes]

A rebutal on "botnets"
1) We don't know it IS a botnet.
2) If it is there is absolutely nothing you can do to prevent them.  If botnets could be stopped they would.
3) If this is a botnet and they included tx you wouldn't even know.  The entire rationale can be boiled down to lots of hashpower with no txs = botnet which is dubious at best.
4) There is no need to "rationalize" anything.  Botnets exist and they will be attracted to potential profit.  Mining is profitable and thus botnets will participate. 

Some of us just don't feel like joining in the gnashing of teeth and assorted other nonsense.

Lets say you have 100% support of the Bitcoin community.  All miners, all pools, all users.  How do you stop botnets?
If you can't then I think you can see your entire post was pointless.

[Revalin]

My concern with botnets isn't that they're botnets.

I'm concerned about two things:  they are both a) making money without doing the job they were paid to do (improve the network), and b) actually degrading the network while they do it.

I object to (a) not because it's a botnet (as you mention we don't even know if that's the case), but because they're not doing their job.  I object to (b) for obvious reasons.

We should fix the economic incentives so that miners have to do the job we're paying them to do instead of just collecting money for wasted work.

[DeathAndTaxes]

So what was all this nonsense ...

nsumers, by and large, are particularly sensitive to the perceived honesty of an organization they do business with.  For the fledgling Bitcoin botnets are not something we want newcomers to worry about.  Whether or not the consumer's/user's perception of botnet risk is accurate, they will judge Bitcoin based on the knowledge that Bitcoin's existence partially relies on criminal activities.
Do you think the average consumer, let alone the coffee house, will like using Bitcoin to pay for a latte if they are aware of the above?

So botnets which play by your "rules" are good?
Also what if this isn't a botnet?  What if it is just a large hashing entity?  So botnets playing by your rules > someone operating under the protocol but not following yoru rules?

The entity (botnet or not) IS improving security of the network.  Network isn't degraded and economic incentive will increase as transaction fees become more important.  To call 1 tx blocks "wasted work" should a deep misunderstanding of how Bitcoin works.

[Technomage]

My concern with botnets isn't that they're botnets.

I'm concerned about two things:  they are both a) making money without doing the job they were paid to do (improve the network), and b) actually degrading the network while they do it.

I object to (a) not because it's a botnet (as you mention we don't even know if that's the case), but because they're not doing their job.  I object to (b) for obvious reasons.

We should fix the economic incentives so that miners have to do the job we're paying them to do instead of just collecting money for wasted work.

+100

I don't always agree with you but on this particular issue I agree one hundred percent. This is not a "critical problem" but it is still an outrage. The current 15% of "freeleech" is still not that much but I'm confident that people will start voicing their opinions on this a lot more loudly if this percentage increases.

DeathAndTaxes is partially right, it's not complete freeleech. But other than that I don't agree with him.

[MysteryMiner]

I'm interested in finding a solution

Pay high transaction fees, such as 25% of transaction. If fees are higher than block rewards, the transactions will be excluded only by fool. Problem solved!

[randomproof]

Why not put in a requirement of at least 1 valid transaction for a block to be valid?  If there are no pending transactions then there is a bigger problem happening.  You would just have to be very clear on what is a valid transaction to prevent penny spamming and such.

[hashman]

I'm interested in finding a solution

Pay high transaction fees, such as 25% of transaction. If fees are higher than block rewards, the transactions will be excluded only by fool. Problem solved!

Thanks MM

It's not an issue now, but better to think ahead.
Miners and pools need to start publishing a schedule of minimum fees for transactions they will accept, and I guess their relay IPs.

Similar to the problems discussed in
https://bitcointalk.org/index.php?topic=51712.0;all

[payb.tc]

We should fix the economic incentives

i don't think anything needs to be done or changed... we're already heading towards a partial fix in december, then continual adjustments to 'economic incentives' after that.

[westkybitcoins]

I think whoever is doing this is brilliant.

There's been concern for a long time that the bitcoin network will eventually weaken due to pitiful transaction fees providing no incentive for new/continued mining.

Not only has this zero-tx miner forced this issue to the fore, he has also provided an incentive for all of us to do, over time, what needs to be done to alleviate that concern.

Begin bumping up our transaction fees.

It's doubtful that small bumps in our fees will quickly end zero-tx mining. But it's also doubtful zero-tx mining is going to cause serious problems in the near future. But over time, it begins to matter.

As our transaction fees go up, not only will we be incentivizing new miners (strengthening the network and lowering the % of hashing power belonging to the zero-tx miners) but, eventually, the zero-tx miners (surely a handful of miners already did this) will begin to start processing transaction fees just because the lost profit would make it stupid not too.

And yes, with a big enough transaction fee reward per block, even a zero-tx mining botnet (which we don't know it is) will switch. And the halving of the block generation reward will only hasten that.

Looks like the simplest, easiest, and ideal solution is for us to do what needed to be done anyway.

Well played.

[guruvan]

It's not an issue now, but better to think ahead.
Miners and pools need to start publishing a schedule of minimum fees for transactions they will accept, and I guess their relay IPs.

This is an interesting proposal. This is how a merchant would decide where to send transactions in other current clearing systems. If it can be done, it'd lead to competition and diversity among pools, and wouldn't that add to the overall network security?

It might create some competition in wallet/PoS systems as well - pools or their resellers might put out transaction software to directly push TXs through their pool (or a network of syndicated pools, etc) - having wallets that only relay to specific clearinghouses (pools) could open up additional fraud detection/protection services, etc.

[Killdozer]

If the confirmation times ever become a problem, people will just start paying more in transaction fees, and the whole thing will balance itself out.
It's in the design.

[Mike Hearn]

It depends how much profit there is to be had vs the effort needed for this guy to upgrade his architecture and do things properly. It may be that now he has whatever-it-is set up and running, he doesn't care any more and it'd take a lot of missed profit for him to start caring about it. If Bitcoin reaches a point where it's incredibly expensive to use because of misaligned mining incentives it'll just end up useless as a currency.

I really only see three possibilities here:

1) Botnet and for scalability/whatever reasons they are not including transactions. Solution: investigate and get the owner arrested, if possible.

2) Custom hardware buildout. Friendly miner. Might not realize or care that he's harming the network by producing empty blocks, or not understand how to integrate transactions properly. Talking to them might help.

3) Custom hardware buildout. Knows what he is doing, does not care about overall network harm, does not care about incremental profit unless it's really large. Purely mercenary/profit motivated. Might be encouraged to upgrade his software if MtGox refused to do business with them until fixed. Otherwise just has to be tolerated, modulo something like Gregs protocol-level change proposal.

At any rate, there's little point discussing it further until somebody has contacted the ISP of the IPs in question and asked them to look into it.

[Brunic]

Transactions fees are completely ridiculous right now. I mean, the objective of fees is to cover the cost of a service. I can't talk for other people, but right now, fees are surely not covering my electricity bills.

Currently, a ton of people are shooting transactions left and right for free. I paid from my pocket those computers with this electricity, I took the time and the risk to provide this service, and I should give you a free ride on my service? Bitcoin generation is a temporary measure for the birth of the network, and we should not depend on it. I find it insulting when people act like transactions should be free, and that we, miners, should do the good(aka get screwed) thing and paying from our pocket so you can move your Bitcoins without any fees.

Those who are not including fees are the ones harming the network right now. I hope more miners does the same thing and force people to add more fees to their transactions.

[benjamindees]

Some short-sighted miners here it seems...

The real Bitcoin economy would likely not handle a huge increase in transaction fees very well.  Enforcing the minimum would probably be fine.  But doubling or tripling it would likely cause pain.  And even that would get nowhere near the current block reward.

It's not even clear that this miner would include transactions if the fees were higher.  Right now he isn't including the transactions with fees.  He's including zero transactions.  No one knows the reason for this.

Your electric bill is being covered by the block reward.  If you want fees to go up in order to cover this cost, the reward would likely have to come down significantly in order to meet halfway.  Otherwise, the (miniscule) real economy would be hugely affected, and price could plummet.

Be careful what you ask for.

[DeathAndTaxes]

It's not even clear that this miner would include transactions if the fees were higher.  Right now he isn't including the transactions with fees.  He's including zero transactions.  No one knows the reason for this.

There is a fixed cost (in terms of software, complexity, bugs, troubleshooting, etc), for including ANY transaction.  The aggregate transaction fees are so beyond worthless (a few pennies per block) that it doesn't make any economical sense to include any transactions.  Including only paying transactions doesn't improve that dynamic.  Including only paying transactions may lead to more paying transactions but that is an unknown and indirect benefit.

If transaction fees were higher then there may be interest.  At a minimum the miner may need to consider it either now or in the future.  Today he is pulling down ~$250 per block.  However say difficulty rises, the reward falls, and there is a crash on the market.  That might make a block only worth $100.   Now $100 is great unless you have gotten use to months and months of $250 per block.  While realistic transaction fees wouldn't bring him back to $250 maybe they boost it to $100 vs $105.  If $5 enough?  I am not sure but it might be.

This miner has some cost.  Even as a botnet (if he is a botnet) he has opportunity cost.  Fees create an economic incentive to include transactions.  No economic incentive exists now.  Having a few fees with a token amount doesn't change that.

The avg block has about 80 tx.  Even at 0.02 BTC each that is 1.6 BTC.  When block reward falls to 25 and extra 1.6 BTC is significant.  If transaction volume increases 50% over the next year if avg fee was 0.02 BTC that would be ~ 10% less income by excluding fees.

Is 10% enough to change his method of mining?  Who knows but 0.3% certainly isn't.

[muyuu]

I'd also say that more fees also would encourage more honest miners to ramp up their hashing power, diminishing this guy's %.