Re: Gold collapsing. Bitcoin UP.

Quote from: Zarathustra on August 11, 2015, 07:14:52 AM

The iCEman: "more debate prolongs the stalemate"

Blessed is the Eternal Stalemate, for it preserves and strengthens Satoshi's Holy Sanity Check from the aggression of Bitcoin's adversaries.

Shocked

TIL there is intelligent life on Reddit:

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I'm not sure if you are aware of the centralization pressure that occurs when miners are allowed to pick their own block sizes. Miners have incentives to encourage a very high orphan rate, if the orphan rate is properly targeted. Mining is a 0-sum game, which means that miners have incentive to hurt eachother. (less competition means lower difficulty and more blocks for you).

The ideal scenario for a miner is that the block they produce immediately hits a large portion of the hash power (at least 51%, but I'm not sure what the optimal percentage is), and then never hits the remaining hashpower at all. That remaining hashpower will have to find 2 blocks before the rest of the hashpower finds a single block - this will be detrimental to the profits of the minority hashpower, significantly so.

Large blocks provide a way to achieve this to some effect for bigger miners....

...This attack can be levied by a single large miner with no collusion. Simply by prioritizing the other large miners, and refusing to send the block to the low-bandwidth minority, a big miner can create blocks large enough to heavily impact the orphan rate of smaller miners without significantly affecting their own orphan rate.

This is very bad. The block size limit is important to stop this class of attack.

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The vast majority of research demonstrates that blocksize does matter, blocksize caps are required to secure the network, and large blocks are a centralizing pressure.

Heres a short list of what has been published so far:

1) No blocksize cap and no minimum fee leads to catastrophic breakage as miners chase marginal 0 fees:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2400519

Its important to note that mandatory minimum fees could simply be rebated out-of-band, which would lead to the same problems.

2) a) Large mining pools make strategies other than honest mining more profitable:

http://www.cs.cornell.edu/~ie53/publications/btcProcArXiv.pdf

2) b) In the presence of latency, some alternative selfish strategy exists that is more profitable at any mining pool size. The larger the latency, the greater the selfish mining benefit:

http://arxiv.org/pdf/1507.06183v1.pdf

3) Mining simulations run by Pieter Wuille shows that well-connected peers making a majority of the hashing power have an advantage over less-connected ones, earning more profits per hash. Larger blocks even further favor these well-connected peers. This gets even worse as we shift from block subsidy to fee based reward :

http://www.mail-archive.com/bitcoin-development@lists.sourceforge.net/msg08161.html

4) Other point(s):

If there is no blocksize cap, a miner should simply snipe the fees from the latest block and try to stale that block by mining their own replacement. You get all the fees plus any more from new transactions. Full blocks gives less reward for doing so, since you have to choose which transactions to include. https://www.reddit.com/r/Bitcoin/comments/3fpuld/a_transaction_fee_market_exists_without_a_block/ctqxkq6

tl;dr La Serenissima is long accustomed to laughable failed sieges by stymied enemies, Gavincoin merely being the most recent.