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Author Topic: What prevents a miner mafia preventing transactions without fees?  (Read 943 times)
Bill Bisco
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September 01, 2014, 09:53:46 PM
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Say a group miners (miner mafia), themselves send thousands of microtransactions without fees.  The miner mafia themselves if they win the btc, first accept only transactions with fees then only will accept their own internal microtransactions into the blockchain. 

If the miner mafia has a significant hashing %, do they not significantly discourage users from neglecting fees?  Is there  a reason that every miner group should not adopt this strategy to maximize their profits?


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TRYpolar
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September 01, 2014, 10:21:00 PM
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They would not need to send these transactions to achieve this. All they would have to do is to adopt a policy of not confirming any TXs without a fee.

As the block subsidy decreases, it will get harder and harder to get a no fee transaction to confirm.

Your issue with the "mafia" controlling a large portion of the network, this is one risk that a 51% attack would present.
Xiaoxiao
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September 02, 2014, 03:58:16 AM
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Does one have to manually confirm a transaction?  Or do you preset it somehow to confirm only x transactions with y fees, etc?
marryXmas
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September 02, 2014, 04:31:12 AM
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Does one have to manually confirm a transaction?  Or do you preset it somehow to confirm only x transactions with y fees, etc?
Each miner (or the pool if the miner is part of a pool) will set a policy on the conditions under which they will confirm a transaction. Generally speaking a miner will confirm a TX without a fee if it is under a certain size (in terms of blocksize), they may allow for a greater size if the inputs have not been spent in a long time and are sufficiently large (in terms of amount being transferred). Some miners will also give priority to a TX that has been unconfirmed for a long time.

The process is automatic and is setup via the software that "assembles" the block when it is sent to the rest of the network when it is found.
gadsdengraphics
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September 02, 2014, 02:25:54 PM
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Does one have to manually confirm a transaction?  Or do you preset it somehow to confirm only x transactions with y fees, etc?

No, it's not manual.

To be confirmed, the transaction must be included with the signed block when it's broadcast to the network. There is a limited amount of space in each block, so not all pending transactions can be included with each block broadcast. The Satoshi implementation includes an algorithm that determines transaction priority that takes into account transaction fees, the length of time the coins resided at the source address(es) before being spent, and the size of the transaction itself. Miners using custom software (these days, effectively all of them) can use whatever system they like to decide what transactions to include. Some miners will send blocks with no transactions at all - that's a bit rude, and they're leaving transactions fees on the table, but it happens. Most miners use the algorithm from the Satoshi implementation.

If the majority of miners were to decide not to include transactions without fees, then you'd need to fulfill their requirements to get included in the blocks they mine. If those fees become too high for the network to support, then Bitcoin would lose value, which in turn means miners lose profitability. Like most everything else in Bitcoin, this is a case of financial incentives of multiple parties being balanced against one another. If miners require high fees, fewer people will use their service and they'll lose money. Perhaps off-chain transactions would become the big thing, or perhaps sidechains. It's in the best interest of miners - individually and as a community - to continue to accept fee-less and low-fee transactions if there is room available in the block.
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