Topic: Why was this transaction not included in a block? (Read 3070 times)

I'm glad my point initiated this important discussion

No need to come up with my own words when someone else has done it for me.

Please note that cunicula trolls every thread in this way.  His is a minority opinion and his ignore button is colored for a very good reason.

Sorry. I'm a little abrasive.

Yeah, something along the lines of what you are saying would work [provided the people who actually own coins get to vote]. I don't know why they aren't pursuing this. I'm just trying to promulgate sensible ideas here. My feeling is that voting will be rejected based on the claim that Satoshi's rules are inviolable. This kind of faith-based stuff makes me sick. Thus the abrasiveness.

We wait around untill the maximum size becomes a problem, then the devs let people vote on whether or not to double the maximum size and if they get idk 80% yes than they implement it in the next release. Why would this not work? (sorry i dont claim to be an expert)

Sigh. We have reviewed why the devs ideas are lacking. Your conclusion is that the problem is best left up to the devs to solve. Sigh.

yea i failed to take into account the fact that the same person who was writing bogus transactions could also attempt to mine the blocks to write them into. The least bad option definitely seems to be leaving it up to the devs and community to work to gather to adjust it manually from time to time.

No, if there was no limit, the market would arrive at a txn fee of approximately zero (just enough to verify the ECSDA signature and transmit the block to peers). (To see this, set the limit to an arbitrarily large number in the previous example. The txn fee will be negative, but that is not feasible so it will stop decreasing when it hits 0.)

This could actually manages to do worse then the current plan and much worse than monopoly. The outcome assures that the blockchain open for rape by any common vandal. At least the other plan has a chance of succeeding due to dumb luck.

Surprisingly, this is actually another one of the developers' plans. Support the blockchain using 'donations'. LOL! You can start by donating to miners today! I'm sure this will top everyone's list of charitable causes.

The only realistic way to get an acceptable solution to a problem like this is through voting. Probably coin-owners should suggest a fee. And the fee proposed by the median coin should be selected. They could also vote on a block size limit. As far as economics is concerned the two are equivalent. In the blockchain, you could probably instrument this by including votes in each txn and weighting them by output. Probably a vote to move the current fee up by 0.1% or down by 0.1% is sufficient. i.e. this is just one byte of extra info per txn. You could even encode it in a pre-existing piece of information, like include 5 satoshis in the fee to vote up, 6 satoshis in the fee to vote down, and anything else to abstain.  

Algorithmic solutions are hopelessly complicated and error prone. I'm an economist and do this kind of stuff for a living. I wouldn't trust an economist to design an algorithm to do this and not fuck up; let alone a computer scientist. The only reasonable thing an algorithm could target without a reasonable chance of seriously fucking up is the monopoly solution (total fee revenue maximization). I would say this is a second best option to actual voting.

Finally, recall that proof-of-stake solves this problem entirely without meaningful fees. There would still be a fee to vote on, but you could vote for an extremely small fee just sufficient to deter spam.

So if there was no limit and the blocks were no longer rewarding miners, the market should arrive at a natural equilibrium that is a tranaction fee which is just enough to incentivize miners to include your transaction in the block. this same minimum transaction fee should prevent the government or large corporations from using micro transactions to bloat the blockchain. It seems like satoshi should have coded maximum block size to double at the same time as block reward halving.

Listen, this is not rocket science. Sure, there could be a positive equilibrium fee. But the equilibrium is chosen based on throwing darts and it is quite likely to produce a shit turd equilibrium. Worse yet, because of the rigidity involved in making any change to the rules, we could end up mired in shit turds for the indefinite future. The moniker Buttcoin could prove quite apt.

Q_D(p)=a-bp               Txn demanded per block (Q_D) is a function of p, the price per txn. I'm assuming it is linear here just for simplicity.
Q_S=min{a,4000)}

4000 is just the number of txns that can fit with the current  block size limit. If a<4000, then the fee is approximately 0. This is the current equilibrium with 0 or minimal fees.

If a>4000, then there will be equilibrium fees. You can just set Q_D=Q_S and solve the equation to get equilibrium fees.

4000=a-bp
p*=(a-4000)/b

That is the fee with a block size limit. It goes up as demand increases (a). It will go down if substitutes for bitcoin are developed (this would increase b).

Consider the monopoly situation, where the monopoly picks block size. In this case, the monopoly maximizes total feel revenue (ignoring costs because those are hard to predict right now). That is p*q, or ap-bp^2. The solution is just given by a=2bp, or p=a/2b

If a/2b<(a-4000)/b, then the monopoly (like Paypal), leads to lower fees than the current plan. Rearranging. This is
a>8000

Essentially this says that if people demand more than 2 MB blocks at a txn fee of 0, then monopoly leads to lower fees than a block size cap of 1 MB.

The whole example is ad hoc because I assumed a linear demand curve. Nevertheless, the example illustrates what utter and complete garbage a block size cap is. Usually we try to do better than monopoly. Here it seems quite plausible, even likely, that we will do worse on all counts.

There are many other solutions which make more sense. Many of these alternatives are also bad and arbitrary. However, the solution at hand is really fucking extraordinarily bad and really fucking extraordinarily arbitrary. It can simultaneously fail on both security grounds and txns cost grounds. If the cap results in a functional outcome, you can thank dumb luck because I'm sure as hell that no thought process went into this.

In short, the current plan is utter and complete fail. Anyone who says otherwise is completely full of shit and cannot be competent to make this type of decision (i.e. if they were competent, they never would have suggested anything remotely as stupid as this.). The developers know this is utter and complete shit. They suggest otherwise when speaking in public to avoid damage to confidence.

Of course, if they wanted to solve the problem, they would say: "Hey we have a problem, does anyone have any ideas?"

I believe that when jgarzik said:


He was saying the same thing that I was.  "Economically" self adjusting in that there would eventually be an equilibrium between the fees that people would be willing to pay and the number of transactions in a block.

i dont think its correct to say "everyone would need to change at once". As soon as someone created an alternate client where this problem (assuming it is a problem) had been solved or mitigated the blockchain would split. Anyone who did nothing and maintained their coins in both blockchains would be unaffected no matter which of the two won the battle that was about to ensue. Some people would sit idally by and do nothing, however some people would exchange the coins from one blockchain into the other in the hopes of profiting. These people would be the ones who decided which of the two forks would "be bitcoin". Which ever side attracted more capital in the end would "become bitcoin". Those who bet correctly would win at the expense of those who bet incorrectly. It is also possible that people would really be divided on whether the change was a good idea, if this was the case than the two blockchains would co-exist the way bitcoin and litecoin do now.

(this all assumes that the guy who said this problem wasnt self adjusting was correct i did get two different contradicting responses)

You are correct. This is a ridiculously bad solution. It could lead to ass-raping fees that dwarf paypal. However, that's the plan. Proof of stake solves the problem completely, but that's off the table for BitPal.

yea i already figured that one out myself from what i understand about economics but this is not a very good solution once it moves beyond cleaning up the dust problem.

Well, the new code could be written such that it requires 1 MB blocks until a particular block is found in the future (the 262,500the block for example) and from then on requires some larger fixed size.  This would give people time to upgrade without having to worry about trying to get everyone to upgrade at the same moment.  As long as you got a significant majority of the users upgraded before the target block was found, you wouldn't have much of a fork in the blockchain.  The few stragglers would have a large incentive to upgrade quickly once the switchover occurred since they would be unable to receive bitcoins from the majority of users.

Note that in this scenario even without upgrading the stragglers should still theoretically be able to send their bitcoins to people running the upgraded system, they just couldn't receive any bitcoins that were newer than the target switchover block, and would stop seeing confirmations.

I'm curious though who will get to decide that the fees are getting too large, and how will they convince the miners who are making a lot of money off those fees to upgrade to a new system that may reduce their income?

I have a design for a proof-of-stake algorithm that generates consensus without proof-of-work and without time stamping. I need to find developers who are interested in implementing such a project.
I don't think you can build anything on top of bitcoin.

Okay now we're messed.

Would a more logical answer be that if major crisis like that happens (transactions not included in blocks without large exorbitant fees) there would be developed a new digital currency based off original Bitcoin but with this problem inherently solved already?

That could be the case if everyone using Bitcoin could not cooperate in changing the code at once...oh boy

EDIT:
or maybe just as easily that software could be built ON TOP of bitcoin...

$1 million is a more realistic estimate of gov't costs than $1 billion.

As usual, jgarzik claims that disruptive attacks which cause the attacker to lose money are more realistic than regulatory attacks that cause the attacker to gain money.
Of course, this makes no sense, but apparently the dev community wants to reinforce this misunderstanding.

Yes, the block size could be increased, but if I understand it correctly it would require everyone using bitcoin to agree and upgrade their miners/clients otherwise the blockchain would fork and we'd have 2 competing incompatible versions of bitcoin.  The blocksize is not self adjusting, but as the number of transactions increases we'll find that larger fees are required to get a transaction into a block.  As larger fees are needed, people will become less willing to use bitcoin, reducing the number of transactions until an equilibrium is reached.

It is economically self-adjusting.