[Bitcoin-development] Economics of information propagation

Daniel Lidstrom lidstrom83 at gmail.com
Mon Apr 21 04:44:24 UTC 2014


> Of course, in reality smaller miners can just mine on top of block headers
> and include no transactions and do no validation, but that is extremely
> harmful to the security of Bitcoin.


If it's only during the few seconds that it takes to to verify the block,
then would this really be that big of a deal?  E.g. even if all miners did
this, a 10 second delay would only yield an average of a couple blind/empty
blocks per day.


On Sun, Apr 20, 2014 at 10:06 PM, Peter Todd <pete at petertodd.org> wrote:

> -----BEGIN PGP SIGNED MESSAGE-----
> Hash: SHA256
>
> That is mistaken: you can't mine on top of just a block header, leaving
> small miners disadvantaged as they are earning no profit while they wait
> for the information to validate the block and update their UTXO sets. This
> results in the same problem as before, as the large pools who mine most
> blocks can validate either instantly - the self-mine case - or more quickly
> than the smaller miners.
>
> Of course, in reality smaller miners can just mine on top of block headers
> and include no transactions and do no validation, but that is extremely
> harmful to the security of Bitcoin.
>
>
> On 20 April 2014 23:58:58 GMT-04:00, Mark Friedenbach <mark at monetize.io>
> wrote:
> >As soon as we switch to headers
> >first - which will be soon - there will be no difference in propagation
> >time no matter how large the block is. Only 80 bites will be required
> >to
> >propagate the block header which establishes priority for when the
> >block is
> >fully validated.
> >On Apr 20, 2014 6:56 PM, "Jonathan Levin"
> ><jonathan.levin at sant.ox.ac.uk>
> >wrote:
> >
> >> Hi all,
> >>
> >> I am a post-graduate economist writing a paper on the incentives of
> >> mining. Even though this issue has been debated in the forums, I
> >think it
> >> is important to get a sense of the magnitude of the incentives at
> >play and
> >> determine what implications this has for the transaction fee market.
> >>
> >> As it has been pointed out before the marginal cost for miners does
> >not
> >> stem from the private cost of the miner validating the signature and
> >> including it in the list of transactions in the block but rather the
> >> increased probability that the block will be orphaned as a result of
> >slower
> >> propagation. Gavin did some back of the envelope worst case
> >calculations
> >> but these overstated the effect of propagation delay. The reason
> >being the
> >> 80ms additional time to reach 50% of the network is spread throughout
> >the
> >> time that it takes to reach 50% of the network. During this time
> >miners are
> >> notified about the block and treat it as the longest chain and hence
> >are no
> >> longer mining with the aim to produce a competing block.
> >>
> >> I am looking to calculate the change in the curvature of the
> >probability
> >> mass function that a block hears about my block in any given second
> >as a
> >> function of the block size. Although there is likely to be
> >significant
> >> noise here, there seems to be some stable linear relationships with
> >the
> >> time that it takes to reach different quartiles. Has anyone done
> >this? I
> >> have used some empirical data that I am happy to share but ideally I
> >would
> >> like analytical solutions.
> >>
> >> Following Peter Todd, I also find the concerning result that
> >propagation
> >> delays results in increasing returns to higher shares of the hashing
> >power.
> >> Indeed it may well be in the interest of large pools to publish large
> >> blocks to increase propagation delays on the network which would
> >increase
> >> orphan rates particularly for small miners and miners that have not
> >> invested in sufficient bandwidth / connectivity. If a small miner
> >hears
> >> about a block after 4.5 seconds on average there is a 0.7% chance
> >that
> >> there is already a block in circulation.  Large miners can increase
> >the
> >> time that it takes for small miners to hear about blocks by
> >increasing the
> >> size of their blocks. For example if the time that it takes for a
> >small
> >> miner to hear about the block goes to 12 seconds there is a 2 percent
> >> chance there is already a block in circulation for the small miner.
> >There
> >> is also a 1.2% chance that there will be a competing block published
> >after
> >> a small miner propagates in the time that it gets to full
> >propagation. Am I
> >> getting this right that the probability of a miner’s block being
> >orphaned
> >> is comprised of the probability that the miner was not the first to
> >find a
> >> valid block and the probability that given they are first, someone
> >else in
> >> the absence of hearing about it finds a competing valid block.
> >>
> >> One question is: Are orphans probabilistic and only resolved after
> >hearing
> >> about a new block that lengthens the chain or is there a way to know
> >in
> >> advance? Is it frowned upon to mine on top of a block that you have
> >just
> >> found even though it is very likely going to end up an orphan?
> >>
> >> Would be happy to share the draft form of the paper and receive any
> >> feedback.
> >>
> >> Finally, at coinometrics we are working on a modified client to
> >capture
> >> information on network propagation and would invite any suggestions
> >of any
> >> other useful statistics that would be useful in the development of
> >software.
> >>
> >> Best,
> >>
> >> Jonathan
> >>
> >>
> >>
> >>
> >>
> >>
> >>
> >>
> >>
> >>
> >> On 21 Apr 2014, at 01:16, <
> >> bitcoin-development-request at lists.sourceforge.net> <
> >> bitcoin-development-request at lists.sourceforge.net> wrote:
> >>
> >> > Send Bitcoin-development mailing list submissions to
> >> >       bitcoin-development at lists.sourceforge.net
> >> >
> >> > To subscribe or unsubscribe via the World Wide Web, visit
> >> >
> >https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >> > or, via email, send a message with subject or body 'help' to
> >> >       bitcoin-development-request at lists.sourceforge.net
> >> >
> >> > You can reach the person managing the list at
> >> >       bitcoin-development-owner at lists.sourceforge.net
> >> >
> >> > When replying, please edit your Subject line so it is more specific
> >> > than "Re: Contents of Bitcoin-development digest..."
> >> >
> >> >
> >> > Today's Topics:
> >> >
> >> >   1. Re: "bits": Unit of account (Oliver Egginger)
> >> >   2. Re: "bits": Unit of account (Christophe Biocca)
> >> >   3. Re: "bits": Unit of account (Gmail)
> >> >   4. Re: "bits": Unit of account (Mike Caldwell)
> >> >   5. Re: "bits": Unit of account (Justin A)
> >> >
> >> >
> >> >
> >----------------------------------------------------------------------
> >> >
> >> > Message: 1
> >> > Date: Sun, 20 Apr 2014 20:43:24 +0200
> >> > From: Oliver Egginger <bitcoin at olivere.de>
> >> > Subject: Re: [Bitcoin-development] "bits": Unit of account
> >> > To: Bitcoin Development <bitcoin-development at lists.sourceforge.net>
> >> > Message-ID: <5354154C.1080908 at olivere.de>
> >> > Content-Type: text/plain; charset=ISO-8859-1
> >> >
> >> > Hello,
> >> >
> >> > just my two 'cents':
> >> >
> >> > Terms arises by itself. Just as most people speak of coins when
> >they
> >> > mean bitcoins. I do not see that bitcoin is currently in common use
> >> > except for speculation. Therefore no term for smaller units has
> >> > established yet. No problem in my eyes. Time will tell.
> >> >
> >> > - oliver
> >> >
> >> >
> >> >
> >> >
> >> > ------------------------------
> >> >
> >> > Message: 2
> >> > Date: Sun, 20 Apr 2014 15:19:38 -0400
> >> > From: Christophe Biocca <christophe.biocca at gmail.com>
> >> > Subject: Re: [Bitcoin-development] "bits": Unit of account
> >> > To: Bitcoin Development <bitcoin-development at lists.sourceforge.net>
> >> > Message-ID:
> >> >       <CANOOu=9=
> >> TAnaCuyh_P2GqHaguyY39xjhj84HSA_x+6F4MOqM_A at mail.gmail.com>
> >> > Content-Type: text/plain; charset=UTF-8
> >> >
> >> > Culturally neutral? "bit" in French phonetically collides with
> >slang
> >> > for phallus ("bitte", with a silent "e"). Apparently it means
> >"louse"
> >> > in Turkish as well.
> >> >
> >> > Not that this really would be avoidable with any short word (all
> >the
> >> > short possible words are usually taken), but it's not neutral.
> >> >
> >> > On Sun, Apr 20, 2014 at 2:43 PM, Oliver Egginger
> ><bitcoin at olivere.de>
> >> wrote:
> >> >> Hello,
> >> >>
> >> >> just my two 'cents':
> >> >>
> >> >> Terms arises by itself. Just as most people speak of coins when
> >they
> >> >> mean bitcoins. I do not see that bitcoin is currently in common
> >use
> >> >> except for speculation. Therefore no term for smaller units has
> >> >> established yet. No problem in my eyes. Time will tell.
> >> >>
> >> >> - oliver
> >> >>
> >> >>
> >> >>
> >>
>
> >------------------------------------------------------------------------------
> >> >> Learn Graph Databases - Download FREE O'Reilly Book
> >> >> "Graph Databases" is the definitive new guide to graph databases
> >and
> >> their
> >> >> applications. Written by three acclaimed leaders in the field,
> >> >> this first edition is now available. Download your free book
> >today!
> >> >> http://p.sf.net/sfu/NeoTech
> >> >> _______________________________________________
> >> >> Bitcoin-development mailing list
> >> >> Bitcoin-development at lists.sourceforge.net
> >> >> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >> >
> >> >
> >> >
> >> > ------------------------------
> >> >
> >> > Message: 3
> >> > Date: Sun, 20 Apr 2014 14:32:26 -0500
> >> > From: Gmail <will.yager at gmail.com>
> >> > Subject: Re: [Bitcoin-development] "bits": Unit of account
> >> > Cc: Bitcoin Development <bitcoin-development at lists.sourceforge.net>
> >> > Message-ID: <B687D4AD-263F-4594-BE7A-FF238B8DF7AF at gmail.com>
> >> > Content-Type: text/plain; charset="us-ascii"
> >> >
> >> > People in the Bitcoin community are sometimes resistant to the idea
> >of
> >> using the word "credit" as a unit of Bitcoin, because Bitcoin is not
> >a
> >> credit-based system.
> >> >
> >> > However, given that the average person has close to no
> >understanding of
> >> what "credit" means, and probably no concern for the distinction even
> >if
> >> they do know, it may be wise to use the futuristic and easily
> >> understandable "credit" as our human-friendly unit.
> >> >
> >> > Do others agree that "credits" as a unit of account has a desirable
> >> futuristic connotation?
> >> >
> >> > Will
> >> >
> >> > -------------- next part --------------
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> >> > Size: 1593 bytes
> >> > Desc: not available
> >> >
> >> > ------------------------------
> >> >
> >> > Message: 4
> >> > Date: Sun, 20 Apr 2014 16:28:34 -0400
> >> > From: Mike Caldwell <mcaldwell at swipeclock.com>
> >> > Subject: Re: [Bitcoin-development] "bits": Unit of account
> >> > To: Christophe Biocca <christophe.biocca at gmail.com>
> >> > Cc: Bitcoin Development <bitcoin-development at lists.sourceforge.net>
> >> > Message-ID: <4098C706-D67F-474E-9C13-E4C8F56B41ED at swipeclock.com>
> >> > Content-Type: text/plain; charset="us-ascii"
> >> >
> >> > By culturally neutral I mean we avoid deliberately invoking a
> >cultural
> >> reference in the name.  For example "satoshi" would be a reference to
> >> Japanese culture just for being a common Japanese name regardless of
> >who
> >> Satoshi turns out to be.
> >> >
> >> > Mike
> >> >
> >> > Sent from my iPhone
> >> >
> >> >> On Apr 20, 2014, at 1:20 PM, "Christophe Biocca" <
> >> christophe.biocca at gmail.com> wrote:
> >> >>
> >> >> Culturally neutral? "bit" in French phonetically collides with
> >slang
> >> >> for phallus ("bitte", with a silent "e"). Apparently it means
> >"louse"
> >> >> in Turkish as well.
> >> >>
> >> >> Not that this really would be avoidable with any short word (all
> >the
> >> >> short possible words are usually taken), but it's not neutral.
> >> >>
> >> >>> On Sun, Apr 20, 2014 at 2:43 PM, Oliver Egginger
> ><bitcoin at olivere.de>
> >> wrote:
> >> >>> Hello,
> >> >>>
> >> >>> just my two 'cents':
> >> >>>
> >> >>> Terms arises by itself. Just as most people speak of coins when
> >they
> >> >>> mean bitcoins. I do not see that bitcoin is currently in common
> >use
> >> >>> except for speculation. Therefore no term for smaller units has
> >> >>> established yet. No problem in my eyes. Time will tell.
> >> >>>
> >> >>> - oliver
> >> >>>
> >> >>>
> >> >>>
> >>
>
> >------------------------------------------------------------------------------
> >> >>> Learn Graph Databases - Download FREE O'Reilly Book
> >> >>> "Graph Databases" is the definitive new guide to graph databases
> >and
> >> their
> >> >>> applications. Written by three acclaimed leaders in the field,
> >> >>> this first edition is now available. Download your free book
> >today!
> >> >>> http://p.sf.net/sfu/NeoTech
> >> >>> _______________________________________________
> >> >>> Bitcoin-development mailing list
> >> >>> Bitcoin-development at lists.sourceforge.net
> >> >>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >> >>
> >> >>
> >>
>
> >------------------------------------------------------------------------------
> >> >> Learn Graph Databases - Download FREE O'Reilly Book
> >> >> "Graph Databases" is the definitive new guide to graph databases
> >and
> >> their
> >> >> applications. Written by three acclaimed leaders in the field,
> >> >> this first edition is now available. Download your free book
> >today!
> >> >> http://p.sf.net/sfu/NeoTech
> >> >> _______________________________________________
> >> >> Bitcoin-development mailing list
> >> >> Bitcoin-development at lists.sourceforge.net
> >> >> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >> >
> >> >
> >> >
> >> > ------------------------------
> >> >
> >> > Message: 5
> >> > Date: Sun, 20 Apr 2014 20:16:35 -0400
> >> > From: Justin A <allport at gmail.com>
> >> > Subject: Re: [Bitcoin-development] "bits": Unit of account
> >> > To: Mike Caldwell <mcaldwell at swipeclock.com>
> >> > Cc: Bitcoin Development <bitcoin-development at lists.sourceforge.net>
> >> > Message-ID:
> >> >       <
> >> CAK2MuX3GufxU_AH0Kaw3pUkzgX_agok86ahCh+7r96UkxZwneQ at mail.gmail.com>
> >> > Content-Type: text/plain; charset="utf-8"
> >> >
> >> > <delurk>
> >> >
> >> > What about "ubit", pronounced "YOU-bit", representing 1e-6 bitcoin?
> >Easy
> >> to
> >> > say, tied in a visual way to the metric micro, leaves the required
> >2
> >> > decimal places for the marginally numerate.. What more could one
> >want?
> >> >
> >> > </delurk>
> >> >
> >> > Also, hi. My first post; plan to get involved over the southern
> >> hemisphere
> >> > winter if I can learn enough.
> >> > On Apr 20, 2014 4:32 PM, "Mike Caldwell" <mcaldwell at swipeclock.com>
> >> wrote:
> >> >
> >> >> By culturally neutral I mean we avoid deliberately invoking a
> >cultural
> >> >> reference in the name.  For example "satoshi" would be a reference
> >to
> >> >> Japanese culture just for being a common Japanese name regardless
> >of who
> >> >> Satoshi turns out to be.
> >> >>
> >> >> Mike
> >> >>
> >> >> Sent from my iPhone
> >> >>
> >> >>> On Apr 20, 2014, at 1:20 PM, "Christophe Biocca" <
> >> >> christophe.biocca at gmail.com> wrote:
> >> >>>
> >> >>> Culturally neutral? "bit" in French phonetically collides with
> >slang
> >> >>> for phallus ("bitte", with a silent "e"). Apparently it means
> >"louse"
> >> >>> in Turkish as well.
> >> >>>
> >> >>> Not that this really would be avoidable with any short word (all
> >the
> >> >>> short possible words are usually taken), but it's not neutral.
> >> >>>
> >> >>>> On Sun, Apr 20, 2014 at 2:43 PM, Oliver Egginger
> ><bitcoin at olivere.de>
> >> >> wrote:
> >> >>>> Hello,
> >> >>>>
> >> >>>> just my two 'cents':
> >> >>>>
> >> >>>> Terms arises by itself. Just as most people speak of coins when
> >they
> >> >>>> mean bitcoins. I do not see that bitcoin is currently in common
> >use
> >> >>>> except for speculation. Therefore no term for smaller units has
> >> >>>> established yet. No problem in my eyes. Time will tell.
> >> >>>>
> >> >>>> - oliver
> >> >>>>
> >> >>>>
> >> >>>>
> >> >>
> >>
>
> >------------------------------------------------------------------------------
> >> >>>> Learn Graph Databases - Download FREE O'Reilly Book
> >> >>>> "Graph Databases" is the definitive new guide to graph databases
> >and
> >> >> their
> >> >>>> applications. Written by three acclaimed leaders in the field,
> >> >>>> this first edition is now available. Download your free book
> >today!
> >> >>>> http://p.sf.net/sfu/NeoTech
> >> >>>> _______________________________________________
> >> >>>> Bitcoin-development mailing list
> >> >>>> Bitcoin-development at lists.sourceforge.net
> >> >>>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >> >>>
> >> >>>
> >> >>
> >>
>
> >------------------------------------------------------------------------------
> >> >>> Learn Graph Databases - Download FREE O'Reilly Book
> >> >>> "Graph Databases" is the definitive new guide to graph databases
> >and
> >> >> their
> >> >>> applications. Written by three acclaimed leaders in the field,
> >> >>> this first edition is now available. Download your free book
> >today!
> >> >>> http://p.sf.net/sfu/NeoTech
> >> >>> _______________________________________________
> >> >>> Bitcoin-development mailing list
> >> >>> Bitcoin-development at lists.sourceforge.net
> >> >>> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >> >>
> >> >>
> >> >>
> >>
>
> >------------------------------------------------------------------------------
> >> >> Learn Graph Databases - Download FREE O'Reilly Book
> >> >> "Graph Databases" is the definitive new guide to graph databases
> >and
> >> their
> >> >> applications. Written by three acclaimed leaders in the field,
> >> >> this first edition is now available. Download your free book
> >today!
> >> >> http://p.sf.net/sfu/NeoTech
> >> >> _______________________________________________
> >> >> Bitcoin-development mailing list
> >> >> Bitcoin-development at lists.sourceforge.net
> >> >> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
> >> >>
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