đź“… Original date posted:2015-08-05
đź“ť Original message:Very interesting paper. When you talk about a market, what are you
referring to exactly? A market means that demand and supply are matched
continuously, and Bitcoin has no such mechanism. A lot of discussion has
been around fixing the "supply" of blocksize. A floating number would mean
that a hardcoded number or function would be replaced by a decision process
involving users (demand). I don't think a fee market exists and that demand
or supply are not easily definable. Ideally supply of transaction
capability would completely depend on demand, and a price would exist such
that demand can react to longterm or shorterm supply constraints. In such a
scenario there would be no scalability concerns, as scale would be almost
perfectly elastic.
On Tue, Aug 4, 2015 at 8:40 AM, Peter R via bitcoin-dev <
bitcoin-dev at lists.linuxfoundation.org> wrote:
> Dear Bitcoin-Dev Mailing list,
>
> I’d like to share a research paper I’ve recently completed titled “A
> Transaction Fee Market Exists Without a Block Size Limit.” In addition to
> presenting some useful charts such as the cost to produce large spam
> blocks, I think the paper convincingly demonstrates that, due to the
> orphaning cost, a block size limit is not necessary to ensure a functioning
> fee market.
>
> The paper does not argue that a block size limit is unnecessary in
> general, and in fact brings up questions related to mining cartels and the
> size of the UTXO set.
>
> It can be downloaded in PDF format here:
>
> https://dl.dropboxusercontent.com/u/43331625/feemarket.pdf
>
> Or viewed with a web-browser here:
>
>
> https://www.scribd.com/doc/273443462/A-Transaction-Fee-Market-Exists-Without-a-Block-Size-Limit
>
> *Abstract. *This paper shows how a rational Bitcoin miner should select
> transactions from his node’s mempool, when creating a new block, in order
> to maximize his profit in the absence of a block size limit. To show this,
> the paper introduces the block space supply curve and the mempool demand
> curve. The former describes the cost for a miner to supply block space by
> accounting for orphaning risk. The latter represents the fees offered by
> the transactions in mempool, and is expressed versus the minimum block size
> required to claim a given portion of the fees. The paper explains how the
> supply and demand curves from classical economics are related to the
> derivatives of these two curves, and proves that producing the quantity of
> block space indicated by their intersection point maximizes the miner’s
> profit. The paper then shows that an unhealthy fee market—where miners are
> incentivized to produce arbitrarily large blocks—cannot exist since it
> requires communicating information at an arbitrarily fast rate. The paper
> concludes by considering the conditions under which a rational miner would
> produce big, small or empty blocks, and by estimating the cost of a spam
> attack.
>
> Best regards,
> Peter
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev at lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>
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Benjamin [ARCHIVE] /
npub17k…sr5tq
2023-06-07 17:32:51
in reply to nevent1q…ayrq
Author Public Key
npub17kz55p7ysz4ftvq2xyr2zamc776cygwcm5fdz8ndj3jm5umm65xq4sr5tqPublished at
2023-06-07 17:32:51Event JSON
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"content": "📅 Original date posted:2015-08-05\n📝 Original message:Very interesting paper. When you talk about a market, what are you\nreferring to exactly? A market means that demand and supply are matched\ncontinuously, and Bitcoin has no such mechanism. A lot of discussion has\nbeen around fixing the \"supply\" of blocksize. A floating number would mean\nthat a hardcoded number or function would be replaced by a decision process\ninvolving users (demand). I don't think a fee market exists and that demand\nor supply are not easily definable. Ideally supply of transaction\ncapability would completely depend on demand, and a price would exist such\nthat demand can react to longterm or shorterm supply constraints. In such a\nscenario there would be no scalability concerns, as scale would be almost\nperfectly elastic.\n\nOn Tue, Aug 4, 2015 at 8:40 AM, Peter R via bitcoin-dev \u003c\nbitcoin-dev at lists.linuxfoundation.org\u003e wrote:\n\n\u003e Dear Bitcoin-Dev Mailing list,\n\u003e\n\u003e I’d like to share a research paper I’ve recently completed titled “A\n\u003e Transaction Fee Market Exists Without a Block Size Limit.” In addition to\n\u003e presenting some useful charts such as the cost to produce large spam\n\u003e blocks, I think the paper convincingly demonstrates that, due to the\n\u003e orphaning cost, a block size limit is not necessary to ensure a functioning\n\u003e fee market.\n\u003e\n\u003e The paper does not argue that a block size limit is unnecessary in\n\u003e general, and in fact brings up questions related to mining cartels and the\n\u003e size of the UTXO set.\n\u003e\n\u003e It can be downloaded in PDF format here:\n\u003e\n\u003e https://dl.dropboxusercontent.com/u/43331625/feemarket.pdf\n\u003e\n\u003e Or viewed with a web-browser here:\n\u003e\n\u003e\n\u003e https://www.scribd.com/doc/273443462/A-Transaction-Fee-Market-Exists-Without-a-Block-Size-Limit\n\u003e\n\u003e *Abstract. *This paper shows how a rational Bitcoin miner should select\n\u003e transactions from his node’s mempool, when creating a new block, in order\n\u003e to maximize his profit in the absence of a block size limit. To show this,\n\u003e the paper introduces the block space supply curve and the mempool demand\n\u003e curve. The former describes the cost for a miner to supply block space by\n\u003e accounting for orphaning risk. The latter represents the fees offered by\n\u003e the transactions in mempool, and is expressed versus the minimum block size\n\u003e required to claim a given portion of the fees. The paper explains how the\n\u003e supply and demand curves from classical economics are related to the\n\u003e derivatives of these two curves, and proves that producing the quantity of\n\u003e block space indicated by their intersection point maximizes the miner’s\n\u003e profit. The paper then shows that an unhealthy fee market—where miners are\n\u003e incentivized to produce arbitrarily large blocks—cannot exist since it\n\u003e requires communicating information at an arbitrarily fast rate. The paper\n\u003e concludes by considering the conditions under which a rational miner would\n\u003e produce big, small or empty blocks, and by estimating the cost of a spam\n\u003e attack.\n\u003e\n\u003e Best regards,\n\u003e Peter\n\u003e\n\u003e _______________________________________________\n\u003e bitcoin-dev mailing list\n\u003e bitcoin-dev at lists.linuxfoundation.org\n\u003e https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev\n\u003e\n\u003e\n-------------- next part --------------\nAn HTML attachment was scrubbed...\nURL: \u003chttp://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20150805/113f3d52/attachment.html\u003e",
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