Bitcoin Forum
December 10, 2016, 01:27:48 AM *
News: Latest stable version of Bitcoin Core: 0.13.1  [Torrent].
 
   Home   Help Search Donate Login Register  
Pages: « 1 [2]  All
  Print  
Author Topic: Will transaction fees alone be enough incentive to keep miners mining?  (Read 2118 times)
db
Sr. Member
****
Offline Offline

Activity: 279



View Profile
April 19, 2012, 11:55:05 AM
 #21

You are assuming that all miners are motivated solely by profit and would not turn down a fee of any amount, not even a single satoshi. Maybe I'm being hopelessly optimistic, but I think there will always be at least some miners willing to sacrifice a portion of their profit "for the good of the network", as it were. I also think that if the difficulty drops dangerously low, a large number of these self-sacrificial miners will emerge to try to save the network. It's even possible (or even probable) that if Bitcoin becomes a major global economy, major governments will get behind it, spending taxpayers' dollars (bitcoins?) on unprofitable mining operations to ensure the security of the network.
You don't have to mine to donate hashing power. The easiest way is to just make transactions with high fees.
1481333268
Hero Member
*
Offline Offline

Posts: 1481333268

View Profile Personal Message (Offline)

Ignore
1481333268
Reply with quote  #2

1481333268
Report to moderator
1481333268
Hero Member
*
Offline Offline

Posts: 1481333268

View Profile Personal Message (Offline)

Ignore
1481333268
Reply with quote  #2

1481333268
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1481333268
Hero Member
*
Offline Offline

Posts: 1481333268

View Profile Personal Message (Offline)

Ignore
1481333268
Reply with quote  #2

1481333268
Report to moderator
realnowhereman
Hero Member
*****
Offline Offline

Activity: 504



View Profile
April 19, 2012, 11:56:29 AM
 #22

In 30 years the block reward will be near zero.  The reward will instead come from fees, and the protocol has no control over how often and how large a fee-paying transaction will be offered to the network.  Therefore the actual block period won't matter in the slightest.

I suppose it should be long enough to allow previous blocks to propagate through the network; but that's probably significantly less than 10 minutes.

The market will sort the problem out, as always.  If it becomes unprofitable (by whatever measure, monetary or security) miners will reduce until it does become profitable.  Miners will independently decide on their own "profit-requirements" and might, say, not include any transaction that doesn't offer a greater-than-zero fee; or a 0.01% fee, or whatever.  That requirement will multiply by the size of the pool implementing that requirement and will be competed against between the big pools.

Some small miner with his CPU might say "I'll mine for free"; but then your transaction won't get included for a long time.  Perhaps you're okay with that.

The only thing missing, I think, is the ability to broadcast a new transaction that supersedes one that has been stuck in limbo with a larger fee-paying one.  I think thoughts from developers are already moving in those directions.  In which case, this problem will be a non-problem well before 30 years.  I would expect, by the end of this year in fact.

1AAZ4xBHbiCr96nsZJ8jtPkSzsg1CqhwDa
Technomage
Legendary
*
Offline Offline

Activity: 1624


Affordable Physical Bitcoins - Denarium.com


View Profile WWW
April 19, 2012, 12:12:37 PM
 #23

This is one of those issues that has been discussed at length in other sections of the forum. The conclusion is that this is a non-issue for at least this decade. During the decade we either come up with a functioning tx fee market (which is the most likely scenario) or we don't which means that we either incorporate some type of proof of stake into Bitcoin or a Bitcoin competitor kills Bitcoin.

Either way, realnowhereman is on point saying that this will most likely be solved way before it is actually an issue. The fact that there has been so much talk about this is a very good sign in itself. In fact it's very likely that a new system will begin forming during the 25 BTC reward block era, which is when tx fees quit being negligible amounts of the total reward. They will still be a small percentage (even after the 25 -> 12,5 drop, which is why I said this is really only a problem next decade).

This is speculation based on current tx amounts though, if Bitcoin usage significantly increases tx fees will be a bigger part of the picture sooner than we think. It won't accelerate the problem though because that is solely related to the amount of fixed reward. The reason for this is that increasing usage will also raise the price of BTC thus leading to more mining investments and thus a stronger network.

Denarium - Leading Physical Bitcoin Manufacturer - Special Xmas deals now live!
Foxpup
Legendary
*
Offline Offline

Activity: 1708



View Profile
April 19, 2012, 12:55:38 PM
 #24

You are assuming that all miners are motivated solely by profit and would not turn down a fee of any amount, not even a single satoshi. Maybe I'm being hopelessly optimistic, but I think there will always be at least some miners willing to sacrifice a portion of their profit "for the good of the network", as it were. I also think that if the difficulty drops dangerously low, a large number of these self-sacrificial miners will emerge to try to save the network. It's even possible (or even probable) that if Bitcoin becomes a major global economy, major governments will get behind it, spending taxpayers' dollars (bitcoins?) on unprofitable mining operations to ensure the security of the network.
You don't have to mine to donate hashing power. The easiest way is to just make transactions with high fees.

Yes, and the easiest way to convince people to pay higher fees is for a group of miners to only process high-fee transactions.

Hmmm... It would be better if "pay a fee for faster processing" was implemented at the protocol level rather than being left up to miners (though such a protocol change would easily be accepted if enough miners felt they couldn't work out any other solution). Perhaps something like a minimum transaction fee equal to the block number's largest prime factor. That way, transactions with a fee of only 1 satoshi will have to wait for a prime numbered block, while higher-fee transactions are allowed more frequently. Clients can recommend a specific fee by working out the factors of upcoming blocks and asking the user how long they are willing to wait. Just a random idea, I don't know how well it would work in practice.

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
Transisto
Donator
Legendary
*
Offline Offline

Activity: 1624



View Profile WWW
April 19, 2012, 01:22:22 PM
 #25

Why is this in speculation ?
Foxpup
Legendary
*
Offline Offline

Activity: 1708



View Profile
April 19, 2012, 01:46:18 PM
 #26

Why is this in speculation ?

Probably because the question is about something that's not going to happen for about a hundred years or so? I think that's about as speculative as you can get! Grin

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
Technomage
Legendary
*
Offline Offline

Activity: 1624


Affordable Physical Bitcoins - Denarium.com


View Profile WWW
April 19, 2012, 01:48:20 PM
 #27

Why is this in speculation ?
I was wondering about this also. The only way this makes sense as speculation is if one takes a super long term view. Longer than what I usually refer to as long. It's a good point if this is at all relevant here.

Denarium - Leading Physical Bitcoin Manufacturer - Special Xmas deals now live!
cunicula
Hero Member
*****
Offline Offline

Activity: 756


Stack-overflow Guru


View Profile WWW
April 19, 2012, 01:51:31 PM
 #28

Come up with a functioning tx fee market (which is impossible) or we don't which means that we either incorporate some type of proof of stake into Bitcoin or a Bitcoin competitor kills Bitcoin.



A functioning competitive market for a public good will never work, so I fixed that for you.

You missed one possibility, however. You could end up with the emergence of BitPal™. I'm sure BitPal™ would be super-vigilant to prevent fees from ever getting low. You could trust BitPal™ with your network security 100%!

▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁▁
        AltCoinInternalExperts                Get Your Altcoin Promoted On Social Media       
▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔▔
Foxpup
Legendary
*
Offline Offline

Activity: 1708



View Profile
April 19, 2012, 02:09:12 PM
 #29

The only way this makes sense as speculation is if one takes a super long term view. Longer than what I usually refer to as long.

Well, I plan to be reincarnated as an indestructible cyborg when the singularity hits, and I need to plan my trading strategy accordingly. Specifically, I need to know whether bitcoins will go up or down in value over the next several centuries. Cheesy

Will pretend to do unverifiable things (while actually eating an enchilada-style burrito) for bitcoins: 1K6d1EviQKX3SVKjPYmJGyWBb1avbmCFM4
deus-ex-machina
Full Member
***
Offline Offline

Activity: 166



View Profile
April 19, 2012, 03:12:24 PM
 #30

Yes. Here's why.

Mining will first go down. That means the reward goes up from having more time for transaction fees to go up. Mining goes up to get it. Reward goes down. Mining goes down. Lather. Rinse. Repeat.
realnowhereman
Hero Member
*****
Offline Offline

Activity: 504



View Profile
April 19, 2012, 03:21:13 PM
 #31

It's also likely that the following will become a more frequent occurrence (but for different reasons). i.e. separate agreements between merchants/service providers and miners.

Blockchain.info now has an agreement with Eligius to process low fee transactions - which hopefully means no more "stuck" transactions. I will be monitoring for any possible transaction spam.

That will allow, say, a big merchant to provide a separate payment path than fees to the miner when it is for payments from their customers.  It's a bit like the idea of free postage.  We all know that postage isn't free...

1AAZ4xBHbiCr96nsZJ8jtPkSzsg1CqhwDa
cbeast
Donator
Legendary
*
Offline Offline

Activity: 1722

Let's talk governance, lipstick, and pigs.


View Profile
April 20, 2012, 01:23:44 AM
 #32

This is one of those issues that has been discussed at length in other sections of the forum. The conclusion is that this is a non-issue for at least this decade. During the decade we either come up with a functioning tx fee market (which is the most likely scenario) or we don't which means that we either incorporate some type of proof of stake into Bitcoin or a Bitcoin competitor kills Bitcoin.

Either way, realnowhereman is on point saying that this will most likely be solved way before it is actually an issue. The fact that there has been so much talk about this is a very good sign in itself. In fact it's very likely that a new system will begin forming during the 25 BTC reward block era, which is when tx fees quit being negligible amounts of the total reward. They will still be a small percentage (even after the 25 -> 12,5 drop, which is why I said this is really only a problem next decade).

This is speculation based on current tx amounts though, if Bitcoin usage significantly increases tx fees will be a bigger part of the picture sooner than we think. It won't accelerate the problem though because that is solely related to the amount of fixed reward. The reason for this is that increasing usage will also raise the price of BTC thus leading to more mining investments and thus a stronger network.
Couldn't there be a way to measure the contribution quantitatively of miners (and pools) by their block signatures, and by the height of the blocks created? There would have to be a scheme that checked that only transactions with fees are counted. I would also like to see (as suggested by someone I cannot recall) to have an additional (or percentage of a) fee destroyed to go back to the unmined bitcoin count.

These and probably a few other schemes might give us a proof-of-merit model that rewards honest mining pools. Possibly with extra Bitcoin from the destroyed fees or maybe decreased difficulty. I'm trying to salvage any ideas from the prook-of-stake model that might serve to add a level of trust to a pool that it will include transactions and be amply rewarded for doing so. It would be a nice bonus if it could mitigate the risk of an unknown 51% attack.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
Pages: « 1 [2]  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!