Quote from: giszmo on October 19, 2012, 03:58:07 AM

Quote from: jl2012 on October 18, 2012, 03:32:03 PM

We need a feedback mechanism to minimize very long rounds (and less importantly, very short rounds). I have proposed this before.

Instead of collecting transaction fee, miners will use transaction fee to offset part of the mining difficulty. For example, today's difficulty is about 3,000,000 ("baseline difficulty") and block reward is 50BTC. If the total transaction fee is 0.1BTC, which is 0.2% of block reward, the miner will only need to mine the block with difficulty = 3,000,000*(1-0.002) = 2,994,000 (effective difficulty).

In the 90-minutes block, the transaction fee was 0.612BTC, which would reduce the effective difficulty and expected block discovery time by 1.22%.

This scheme will also minimize very short rounds: at the beginning of rounds which transaction fee is zero, the effective difficulty is equal to the baseline difficulty. The effective difficulty will decrease as transaction fee accumulates. Therefore, it is more difficult to mine at the beginning of rounds. This will also punish those miners who refuse to include transactions in their blocks.

The fee will contribute to the mining reward in the far future, which will slow down the depletion of the mining reward.

so the miners would include transactions (of course without broadcasting these) with many Ƀs in transaction fees, just to reduce their personal difficulty. As every miner will put all his coins into such fake transactions, we would thus end up in proof of stake disguised as proof of work mining Grin

The miners may do so but they won't get their coins back since the transaction fee will subsidize future block reward. Doing this is equivalent to reduce mining variance by receiving less reward. It is also very risky when the block becomes orphaned and the whole world will see those transactions. We may also have a limit for the amount of difficulty reduced.