[Bitcoin-development] A way to create a fee market even without a block size limit (2013)

Peter Todd pete at petertodd.org
Sun May 10 20:51:41 UTC 2015

On Sun, May 10, 2015 at 05:45:32PM -0300, Sergio Lerner wrote:
> Two years ago I presented a new way to create a fee market that does not
> depend on the block chain limit.


> Solution: Require that the set of fees collected in a block has a
> dispersion below a threshold. Use, for example, the Coefficient of
> Variation (http://en.wikipedia.org/wiki/Coefficient_of_variation). If
> the CoVar is higher than a fixed threshold, the block is considered invalid.

It's not possible to create consensus rules enforcing anything about
fees because it's trivial to pay miners out of band.

For instance, you can pay transaction fees by including anyone-can-spend
outputs in your transactions. The miner creating the block then simply
adds a transaction at the end of their block collecting all the
anyone-can-spend outputs. Equally, if you try to prohibit that - e.g. by
preventing respending of funds in the same block - they can simply
publish fee addresses and have people put individual outputs for those
addresses in their transactions. (IIRC Eligius gave people the option to
pay fees that way for awhile)

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