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by nullc 2356 days ago
The article you're linking is an extremely dishonest anonymous hit piece that distorts history to manipulate the audience.

The design of Bitcoin where security is supported by fees to get into blocks is established in the Bitcoin whitepaper and has been in the software since day one.

Contrary to the claims of the article the term "fee market" was introduced and promoted by Jeff Garzik-- rather than people opposing him as the article claims. (Fee market is kind of a bad term, the correct term would be blockspace market, but it actually made sense in the original usage which was about wallets paying 'fees at market rates').

> The answer is lies in the free market. Move transaction fees away from hardcoded limits, and towards something more dynamic, with economic feedback between merchants, users and miners. ... Also introduced is an anti-spam rule that avoids relaying transactions whose value is below that of the transaction fee required to send it. This rule self-adjusts over time, as the "tx fee required to send" changes over time. In a dynamic fee market, it might change a lot.

( https://bitcointalk.org/index.php?topic=196138.msg2044717#ms... )

> 2010-11-19 20:55:42 <jgarzik> eventually we'll all be paying TX fees, sooner or later. and competition to get -some- fee (at lower prices) versus no fee kicks in.

> 2011-02-28 04:13:57 <jgarzik> amiller: it's inevitable that fees will be required. nobody should be assuming bitcoin transactions are / will always be free.

> 2011-03-01 20:32:21 <jgarzik> fees are inevitable

> 2011-03-10 22:14:34 <jgarzik> I think TX fees are a great feedback system; a healthy attribute of bitcoin.

> 2011-11-07 22:43:12 <gavinandresen> Lolcust: yes, but I worry because transaction fees are broken right now-- clients and miners really need more flexibility to let fees go where the market decides, instead of us guessing what the right fees are.

> 2012-10-11 17:01:27 <jgarzik> gmaxwell: I think storage and network will be cheap enough that any non-zero fees will be interesting to miners

> 2013-03-16 00:47:40 <gavinandresen> So: I have no idea what the right answer for fees is. We need to create a market between miners and users, and let the fees go where they belong.

> 2013-03-17 21:12:04 <jgarzik> TD: Satoshi obviously wanted fees to support the system long term. If there is no scarcity, there are no fees.

And people being willing to pay substantive fees to use Bitcoin is absolutely something to celebrate, Bitcoin's long term security is completely dependent on fee income. Getting a non-trivial part of the rewards from fees is a basic validation of the concept.

> 2013-03-17 21:12:44 <jgarzik> TD: The current situation, where block subsidy dominates other incentives, clouds thinking on block size

> 2013-08-12 17:59:33 <jgarzik> auctions make me want replace-by-fee :)

> 2014-05-12 15:13:22 <gavinandresen> hearn: fee cap, meaning what? Fees need to be a market, and rise or fall based on supply and demand for block space

> 2014-08-15 12:37:53 <jgarzik> Merge this useful change, and next will come the call to remove block size limit altogether, which will throw a nuclear bomb onto any nascent fee market.

> 2014-08-15 12:38:37 <jgarzik> All the VCs and execs want an infinite block size limit. It's a sad fixation.

1 comments

> The article you're linking is an extremely dishonest anonymous hit piece that distorts history to manipulate the audience.

That's rich coming from you. It's easy for anyone reading this to search for what nullc has said and done.

> The design of Bitcoin where security is supported by fees to get into blocks is established in the Bitcoin whitepaper and has been in the software since day one.

Many transactions paying low fees can support security just as well as few transactions paying high fees. I'd say even better as people will stop using Bitcoin or move to other cryptocurrencies when fees grow.

Saying that the "fee market" (or "blockspace market" if you want) is supported by the white paper extremely dishonest. The blocksize limit was only meant as a temporary spam protection, not to enforce higher fees. Zero fee transactions were on the other hand accepted from day one.

> That's rich coming from you. It's easy for anyone reading this to search for what nullc has said and done.

How so? I'm fairly proud of my actions, and I'd be happy to discuss any of them with you.

> The blocksize limit was only meant as a temporary spam protection, not to enforce higher fees.

There is nothing that actually supports that the claim that it was spam protection, thats just blind unsubstantiated assertions.

The system has anti-spam mechanisms in it all along that worked independently of the blocksize.

I think it's fairly likely that Satoshi didn't give these details a lot of thought... It's a champagne problem, and for as many things as he clearly thought through there were many others that were a little rough (e.g. like the broken original longest chain rule).

> Many transactions paying low fees can support security just as well as few transactions paying high fees.

This is being slowly disproved in practice. Bitcoin currently pulls in $3m per month in fees. The most popular fork with no blocksize limit pools in a couple thousand dollar at most, with a substantially lower amount of fees per transaction. Even if their block was 95% full at their current rate, it wouldn't be more than a few percent of its funding from inflation (while bitcoin fees currently are as much as 25% of that altcoin's inflation).

Assuming it isn't inhibited by node resource usage, propagation centralization pressures, or other considerations it could always be increased in the future... going the other day with an ecosystem that depens on effectively zero fees would be much harder. I don't think it's an accident that analysis supporting unlimited block sizes assumes perpetual inflation instead of limited supply.

> I don't think it's an accident that analysis supporting unlimited block sizes assumes perpetual inflation instead of limited supply.

Agree, although this assumes that the free market cannot be trusted to regulate the size of the blockchain which seems possible with automatic transaction rebroadcasting. Are you familiar with the technique? Thoughts on it?

https://youtu.be/agppUdX9YvI?t=105

I'd be curious what you think about the approach. The basic idea is that forcing new and old transactions to compete for space on-chain pushes the blockchain into an equilibrium where data-in equals data-out. On either side of the equilibrium point block producers can increase their profits (and reduce costs) by moving towards equilibrium. So no need for a hardcap and no need for perpetual inflation.

That approach allows temporary censorship by miners to be converted into permanent coin loss (thus increasing the value of the attacker's non-censored coins). It also (by itself) doesn't produce an ongoing rate which is necessarily compatible with decenteralized operation of the network.