Topic: What happens if pools try to maximize fees by congesting the network? - page 3. (Read 511 times)

Blurry eyes.

I still do not get it; you are saying one can invalidate the parent transaction by mining the smaller (in size) child transaction? But to mine the child transaction you do have to confirm the parent transaction as well, that is not invalidating.
Double spending and CPFP are different things.

- Jay -

What's this? Closed For New Participants? 

Both parent and child transactions are unconfirmed, and the high-paying one is the child, so to invalidate the big one, you only need to double-spend the parent. So, you could pretend the mempool is clogged up, but you'd only need to mine one small transaction for invalidating every big child transaction.

Correct me if I'm wrong, but CPFP does not invalidate the parent transaction, it bumps up the fee for confirmation by a miner who wants the cumulative fees of both transactions.
How can one then use the child transaction to invalidate the parent?

- Jay -

in the short term, anything is possible. In the long term, only what is profitable is possible. if a pool starts to mess with transactions and its return on the provided computing power from miners starts to decrease, individual miners will start to move to the competition. the same will be done by miners who will not want to take part in the attack.

if tx cost pumps, the network will start to produce fewer transactions (because users will start delaying transfers or using altcoins to transfer value) and thus sooner or later most of the transactions mined by the network will be transactions generated and paid for by the attacker. and it doesn't matter if the miner will mine up his spam transactions and the fee will come back to him (cost 0) or someone else's on which he earns (profit) and his spam transactions will be mined by another miner (loss) it's  net zero.

net zero when it comes to revenue and a great loss, when you add the costs of running the ming rig to the calculations  (electricity and equipment depreciation)

That' s a huge resources needed to that, i mean money, yes <10 sat/vb is too low but the sum of it sending in every block sounds a suicide to me. Besides the remaining pools will also gain to that move. Business wise, that is a waste of money without having assurance that their pool will get the mining reward.

firstly..
pools dont need to broadcast unconfirmed tx to a network but then not include them in their own block template.. you have it the wrong way around

a productive method of fee mania is the opposite.. its to not broadcast unconfirmed transactions to the network. so that other pools dont add an attacker pools tx to their block.. but only include high fee tx in their own blocktemplate.. that way the transactions dont end up in a competitors block and only be in the creators block thus whatever fee the pool puts into its own transaction it gets back . thus no loss no cost.

if you did do things your way to broadcast unconfirmed to network but refuse to put your own transactions into your own block template.. then you wont get your fees back and you instead would pay some other pool when they include your transactions in their block. thus cost you alot to do it for "thousands of transactions"

secondly pools dont need to use ordinals to set high fee rates. pools can just put their own transactions into their own blocks (not relayed before block solve.
there is no need for ordinals at all to be used for fee mania..

the only purpose of ordinals is data bloat by putting in stupid 3.96mb meme images to stop normal users transactions from fitting into blockspace because its used up

lastly.. many fee estimators base it on a recent set of confirmed blocks fee amounts. so its more about the fee of the last few blocks. rather than whatever transactions are being relayed around which you hope will never get into a block.
so again if you want to cause a fee mania you have to put transactions with high fees into a block

I guess big pools could team up to do that, but the question is for how long. This is not something that would go unnoticed. Many people (well, people smarter than me) would see that there are thousands of bogus transactions coming from that pool, and they would ask difficult questions to pool owners... Many people would react, and i can't imagine this lasting long...

Besides, there's been congestions before, and within 24 hours, everything was back to normal.

It's not about if it's unlikely, because it is definitely unlikely but we all know fully well that pools and miners could do this coordinated attack if they so please. It's all about what would happen, as OP asks in his main post.

Now to answer OP's question. With Network Congestion comes people who would wait for the network to be less congested so they could carry out their transaction, sure they don't count for the mass majority but in a large-scale maneuver like this one, they'd be a great clincher. I'd say that when they do decide to congest the network so much that you'd have to pay 10x the usual price you pay for transactions, millions of cryptocurrency users in the world will mutiny, will not create any transaction for let's say, the next two weeks or so, or would boycott the usage of what they assume were the reasons for this fee increase and transaction delay. Utter chaos will commence within the industry, which will only lead to the general public getting whatever they want.

They'd have less chance than the 69%. Also, the 69% could invalidate them at any time, and at a very low cost, just by making sure they use CPFP. For instance, a 10kb transaction paying 100 sat/vb, requires only a small transaction spending the parent, and invaliding the 10kb one.

That's open for debate, but I don't expect a decentralized network to rely on mutual decisions made by three for-profit organizations. Eventually, there may be benefits outweighing the principles.

Wouldn't the remaining 31% of the hash rate include those 10 sat/vb transactions in their blocks?  Wouldn't that mean that these pools would be sending their revenue to their competitors?  That doesn't sone like a good way to stay in business.

Furthermore, can Foundry, Antpool, and F2Pool really trust each other?  Isn't there a pretty strong chance that one of the pools will agree to participate with the others in broadcasting these high-value transactions, and then not actually send the transactions, but instead mine a bunch of the transactions that the other 2 send, allowing them to take a whole bunch of revenue from them?

It's very unlikely, and against the game theory. But you don't need everyone. You just need a couple of pools, and an organized approach.

Sounds to me only sustainable to a coordinated majority. Minorities can't survive this, because big pools will quickly earn their good-paying transactions.

Maybe it's just not worth the risk of discrediting the top pools' integrity.

It's unlikely that all pools and solo miners can form a cartel to launch such attack, and if there's a minority who isn't a part of it, they will mine those fake high fee transactions, causing a loss. If there's a conspiracy to actually include them in block and return the fee to themselves, they still will lose those fees to miners who are not part of the attack, plus they will miss out on the fees from real transactions.

I'm not going to completely dismiss the idea of fee manipulation, but if it's possible, it's likely very hard on practice and there's a lot of factors involved.

Honestly, I had never thought about this before, or at least I don't remember thinking about it.

Say that Foundry USA, AntPool and F2Pool (which in total hold about 69% of the hash rate according to btc.com) cooperated to pretend there's network congestion, when there isn't. For example, say the median fee is 1 sat/vb. But, they don't like that, so they broadcast a thousand transactions paying 5-10 sat/vb, to encourage some of the users with 1 sat/vb to raise their fee rate. Pools' transactions don't cost them anything, because they don't include them into their candidate blocks. They just take advantage of the wallet software there exists which tells the user to pay more to have priority.

This isn't limited to when there isn't congestion. Pools could do this right now with Ordinals, and broadcast transactions with 100 sat/vb; that would encourage those paying 50 sat/vb to raise fees. To avoid other pools from including their transactions (and pay 100 sat/vb which is pretty high), they could sometime include a transaction that invalidates their attractive transactions (e.g., spends an UTXO from those).

A problem, from the pool owners' side, is that they can get caught easily for doing it. Every person running a full node will notice unreasonable activity (the miner not including tx that pay much), and blocks mined by pools are known.