Peeps by @jordanmmck
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Replying to @abcoathup (0x13ebd3443fa5575f0eb173e323d8419f7452cfb1)
#peepstorm. It could be the first over 2.
I think I should have replied all parts to the first peep instead of reply-chain like on Twitter... My mistake is immortalized in the blockchain now. :/
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
12/ Proof of stake? This is the only solution that makes any sense to me. But as far as I can tell the Bitcoin community is 100% committed to PoW for the foreseeable future.
13/ Conclusion...
I'm not anti-Bitcoin, I'm just trying to understand what the plan is...
None of these solutions seem even passable (see full post for detail), except maybe PoS, and I don't see how this isn't a MAJOR problem.
What am I missing?
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
11/ Dominant Assurance Contracts "I benefit from high hash rate so I pledge 0.1 BTC to miner of next block so long as total pledged is 10 BTC." This is a *perfect* example of tragedy of the commons.
12/ Proof of stake?
This is the only solution that makes any sense to me.
But as far as I can tell the Bitcoin community is 100% committed to PoW for the foreseeable future.
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
10/ "This won't be an issue until 2140." "The problem is far off" is not reassuring esp. for a LONG-TERM SoV! But it's not far away. Block rewards hit ZERO in 2140. They halve in 2 yrs. In 10 yrs they're down 88%. In 14 yrs they're down 97%. After that, *pretty much zero*.
11/ Dominant Assurance Contracts
"I benefit from high hash rate so I pledge 0.1 BTC to miner of next block so long as total pledged is 10 BTC."
This is a *perfect* example of tragedy of the commons.
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
9/ "Miners will demand higher fees." This isn't how mining works! Total fees paid is a f'n of user demand for block space. Miners don't control this. If miners collude to set min. fee, selfish miners swoop in accept ALL tx's, and make more money than colluders.
10/ "This won't be an issue until 2140."
"The problem is far off" is not reassuring esp. for a LONG-TERM SoV!
But it's not far away.
Block rewards hit ZERO in 2140.
They halve in 2 yrs.
In 10 yrs they're down 88%.
In 14 yrs they're down 97%.
After that, *pretty much zero*.
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
8/ Miners and users alike may benefit from high SB funded by high fees, but no one wants to pay this cost. All tx fee solutions suffer from *tragedy of the commons*. https://en.bitcoin.it/wiki/Tragedy_of_the_Commons
9/ "Miners will demand higher fees."
This isn't how mining works!
Total fees paid is a f'n of user demand for block space.
Miners don't control this.
If miners collude to set min. fee, selfish miners swoop in accept ALL tx's, and make more money than colluders.
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
7/ "Tx fees will make up the difference." Why would tx fees suddenly increase to compensate for block rewards? Users *always* pay the lowest fee they can. Fees would need to 37x by 2020 to maintain current absolute SB...
8/
Miners and users alike may benefit from high SB funded by high fees, but no one wants to pay this cost.
All tx fee solutions suffer from *tragedy of the commons*.
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
6/ SF = attack-cost/network-value $10M to kill $100M network: SF = 10%. OK. $10M to kill $1B network: SF = 1%. NOT OK! As network SF falls, at some point it's worth attack cost for gov't/bank/BCH/hedge-fund to kill network. Even if price doubles every 4 yrs SF still ~halves.
7/ "Tx fees will make up the difference."
Why would tx fees suddenly increase to compensate for block rewards?
Users *always* pay the lowest fee they can.
Fees would need to 37x by 2020 to maintain current absolute SB...
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
5/ "Price will increase as block rewards decrease, so SB will be ~constant." Relying on perpetual price increase so security doesn't *decline* is terrifying. Even so, *relative cost* not *absolute cost* of attack matters. Networks must maintain high "security factor" (SF)...
6/
SF = attack-cost/network-value
$10M to kill $100M network: SF = 10%. OK.
$10M to kill $1B network: SF = 1%. NOT OK!
As network SF falls, at some point it's worth attack cost for gov't/bank/BCH/hedge-fund to kill network.
Even if price doubles every 4 yrs SF still ~halves.
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
4/ Solutions So, if the cost to 51% Bitcoin gets low enough why wouldn't it get spawn-camped to death? Hopefully there is some rock-solid, game-theoretically bullet-proof solution... Here are some solutions/responses I've come across so far:
5/ "Price will increase as block rewards decrease, so SB will be ~constant."
Relying on perpetual price increase so security doesn't *decline* is terrifying.
Even so, *relative cost* not *absolute cost* of attack matters.
Networks must maintain high "security factor" (SF)...
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
3/ The Problem Currently ~98% of SB comes from block rewards. Block rewards halve every 4 yrs (next one 2020). So, SB ~halves every 4 yrs. *Security depends on SB*. Therefore network security ~halves every 4 yrs!?
4/ Solutions
So, if the cost to 51% Bitcoin gets low enough why wouldn't it get spawn-camped to death?
Hopefully there is some rock-solid, game-theoretically bullet-proof solution...
Here are some solutions/responses I've come across so far:
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
2/ Security Budget ALL miner revenue comes from "security budget" (SB). SB = tx fees + block rewards. Miners must profit, so miner-spend is CAPPED by SB. Network security = miner-spend <= SB. High SB = high security. Low SB = low sec.
3/ The Problem
Currently ~98% of SB comes from block rewards.
Block rewards halve every 4 yrs (next one 2020).
So, SB ~halves every 4 yrs.
*Security depends on SB*.
Therefore network security ~halves every 4 yrs!?
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
1/ Basics of PoW PoW mining protects Bitcoin from 51% attacks. It does this by making such attacks *expensive*. Miners spend lots of money mining -> attackers must spend lots of money attacking. Total miner-spend is determined by total miner revenue.
2/ Security Budget
ALL miner revenue comes from "security budget" (SB).
SB = tx fees + block rewards.
Miners must profit, so miner-spend is CAPPED by SB.
Network security = miner-spend <= SB.
High SB = high security.
Low SB = low sec.
Replying to @jordanmmck (0x6edbe3ca1a0096e87cf421360e78e5e9cfbd8f11)
0/ Bitcoin Security: a Negative Exponential (Thread + Post) In light of BTC mindshare uptick I've been trying to steelman against my BTC skepticism. I ran into the "security & declining block reward" question, and all soln's seem bad. -> Post: https://goo.gl/tVHnJW -> Thread:
1/ Basics of PoW
PoW mining protects Bitcoin from 51% attacks.
It does this by making such attacks *expensive*.
Miners spend lots of money mining -> attackers must spend lots of money attacking.
Total miner-spend is determined by total miner revenue.
0/ Bitcoin Security: a Negative Exponential (Thread + Post)
In light of BTC mindshare uptick I've been trying to steelman against my BTC skepticism.
I ran into the "security & declining block reward" question, and all soln's seem bad.
-> Post: https://goo.gl/tVHnJW
-> Thread:
*simul-Tweeting on #Peepeth and Twitter*