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1230 sats \ 11 replies \ @03393ec3a3 22 Oct 2023 \ on: "If all the people around tells you that you’re drunk - maybe you're just drunk" bitcoin
After thousands of hours of study, I agree. I cannot imagine how Bitcoin can have both product market fit and orderly chain advancement without a significant block subsidy. At the end of the day, fiat price of BTC does not matter. As a miner, if you can net more sats by reorging the last block than you can get from advancing the chain, then the game theory starts breaking.
The knee jerk response that users will simply pay greater fees strikes me as naïve. Aside from destroying product market fit, more fees relative to an already too meager block subsidy only increases the incentive to competitively reorg blocks instead of advancing the chain in an orderly way.
As a miner, if you can net more sats by reorging the last block than you can get from advancing the chain, then the game theory starts breaking.
very true statement
the greed is a big force - big enough to establish something in a short period of time, and to kill something in a short period of time as well...
and we wouldn't be here if Satoshi would choose to build Bitcoin on something else than greed...
because there would be no Stacker.News - because there would be no Bitcoin at all
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So the arguement is that miners will have more incentive to manipulate transactions in their favor than to live off fees? Wouldn't this behavior destroy trust in bitcoin and therefore destroy their business?
Just a thought.
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Miners cannot afford the luxury of low time preference - their bills occur monthly. They will likely be unaware their hashrate is undermining the chain. Once the subsidy is low, a great deal of hashrate will find its way to hashrate markets so that they can have significantly higher payouts from MEV. These markets tend to be commanded by low time preference actors.
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I dunno. I just don't see it. Maybe I'm missing something.
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Mining is extremely competitive, and every possible incentive is continuously explored to gain an edge. Even publicly traded miners are engaging in MEV: https://www.coindesk.com/business/2023/09/27/bitcoin-miner-marathon-reportedly-mines-invalid-btc-block/
"We utilize a small portion of our hash rate to experiment with our development pool and research potential methods to optimize our operations."
This is a transparent admission of MEV in action.
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In 2140 why wouldn't the next miner fee payment be more valuable than a reorg of the last block?.. The miner (likely a pool) would need to reverse one of their own transactions (where they purchased something in the real world?). One transaction worth more than the current miner reward is right now : 6.272 BTC $188,025 this is going up exponentially. Seems to me like any attack would be risky as hell.. I don't get the issue?.
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This can manifest much sooner than 2140, probably in about three halvings from now. All we need is for the value of the highest fees in the last block, plus the highest fees in the mempool to exceed the block subsidy. At that point, you get more sats from reorging the last block than you do from simply advancing the chain. At this point, the game theory starts unravelling.
This is a "gradually then suddenly" thing. Depending on market conditions, there will be small instances at first. Before long it becomes problematic. Then, users will be forced to increase their fees to incentivize their transactions to reliably mine into competing forks. Unfortunately, this further increases the incentive to reorg, as miners get even more sats by successfully reorging each successive block.
In case it helps clear up understanding, the price of BTC is immaterial here. The point is, the miner gets more sats by reorging than from orderly chain advancement (because they capture larger fees that outweigh the decreasing block subsidy).
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All we need is for the value of the highest fees in the last block, plus the highest fees in the mempool to exceed the block subsidy. At that point, you get more sats from reorging the last block than you do from simply advancing the chain.
It's not that simple.
If you are reorging the chain AND rest/most/significant_part of the network mines on-top of the last block; then your threshold for profitability of such action is significantly increased.
Effectively it means that you need to mine >1 successive blocks if you want to do the reorg. That changes the profitability equation a lot because of geometric scaling of hitting successive-blocks mined.
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Still don't see it. Suppose there's a block X at height N and a rogue miner desides to aim at replacing X rather than building on top of it. He successfully mines a block Y also at height N. However, he must keep the fees of Y lower than the fees of X, otherwise miners would build on top of X instead and he gets nothing. So rogue miners would gradually lower the fees of the block at height N until someone builds a block at height N+1. That doesn't sound like Bitcoin is dying or anything like that. Also users can cut the crap by using locktime to aim for a particular block height.
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Unless I misunderstand locktime, I don't see how either of these points is going to deter greedy mining. There is no need to reorg to have less fees, as plenty of new transactions are always percolating in. Likewise, locktime doesn't materially affect miners - the coinbase transaction will still sum to the same value and the winner will eventually get the sats.
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Locktime: you can set the locktime on your transaction so that it can only be included starting from the block N + 1 where N is the current block height. This way your transaction can't be included in a block with the current block height.
Reorgs: now I don't get you at all. I conjecture there might be confusion of reorg as in 51% attack scenario with greedy miner reorg (no 51% power). In the latter case the miner gets the coinbase reward anyway, so why does the coinbase size even matter?
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