[jcfrei]

> There is no mechanism to link cost of proof of work generated to the value being transacted. With a blockchain, scarcity of space per block leads to a fee market forming, and fees paid increasing as the value contained per transaction increases. This leads to security (proof of work) increasing in proportion to value that needs to be protected.

My understanding of proof of work is that it's used to limit the number of new blocks which will get propagated through the network. Bitcoin automatically adjusts difficulty such that it approximately takes 10 minutes for a new block. If block creation intervals were lower it would compromise the security of the system and enable attacks with much less than 50% of the hash power.

[flashdance]

> If block creation intervals were lower it would compromise the security of the system and enable attacks with much less than 50% of the hash power.

Not really. The odds of an attacker successfully generating a double-spending block remain the same with a lower block interval. Many alternative cryptocurrencies have far shorter blocktimes: Litecoin has 2.5min blocktimes, and ethereum is less than 30 seconds IIRC, and they don't have problems with rampant double spends.

The problem with shorter blocktimes is that latency has a greater impact on mining profitability. A miner with a 600ms ping will lose ~0.1% of their revenue with a 10 minute blocktime, but will lose 2% of their revenue with a 30s blocktime.

This gives miners an incentive to centralize geographically to reduce their latency. No bueno!

[jcfrei]

> Not really. The odds of an attacker successfully generating a double-spending block remain the same with a lower block interval. Many alternative cryptocurrencies have far shorter blocktimes: Litecoin has 2.5min blocktimes, and ethereum is less than 30 seconds IIRC, and they don't have problems with rampant double spends.

I based my statement on the following paper: Serialization of Proof-of-work Events: Confirming Transactions via Recursive Elections: https://eprint.iacr.org/2016/1159.pdf

Unfortunately, recent research has shown that the Nakamoto consensus has severe scalability limitations [6], [25], [11], [18]. Increasing the system’s throughput (either via an increase in block size or block creation rate) comes at the expense of security: Under high throughput, Nakamoto’s original guarantee no longer holds, and attackers with less than 50% of the computational power are able to disrupt the system. To avoid this, Bitcoin was set to operate at extremely low rates. The protocol enforces a slow block creation rate, and small block sizes, extending the blockchain only once every 10 minutes (in expectation) with a block containing up to 1 MB (roughly 2,000 transactions). Users must thus wait a long while to receive approval for their transfers.

Regarding litecoin: litecoin does have a lower block creation time of 2.5 minutes - however if you look at the average block size of litecoin it averages around 15kB, compared to ~950 kB of bitcoin (basically exhausting its 1MB limit): https://bitinfocharts.com/comparison/size-btc-ltc.html Considering the litecoin network operates way below its maximum capacity a double spending attack is indeed unlikely. However whether that security would hold up under full load remains to be seen.

[flashdance]

Oh, I see what you mean now! The block propagation delay that larger/faster blocks would cause could allow attackers to double spend with less than 50% of the network because the blocks of honest miners will be occasionally orphaned while your secret chain won't. The longer the delay... the more orphans, and the bigger advantage you have. Is that the effect that you are describing?

If you're interested in how big the delay is you can check this out, it's cited to the paper you linked me and I found it helpful.

http://ieeexplore.ieee.org/xpls/icp.jsp?arnumber=6688704