[bitcoin-dev] BIP - Block75 - Historical and future projections (t. khan)

[t. khan]

As Block75 maintains blocks at 75% full (average over time), it
automatically stabilizes transaction fees at about the level they were in
May/June 2016. It will even do so through changes in transaction size and
volume caused by SegWit and Lightning.

- t.k.

On Mon, Jan 9, 2017 at 11:14 PM, Ryan J Martin via bitcoin-dev <
bitcoin-dev at lists.linuxfoundation.org> wrote:

>      The adaptive/automatic block size notion has been around for a
> while--- others would be better able to speak to why it hasn't gotten
> traction. However my concern with something like that is that it doesn't
> regard the optimal economic equilibrium for tx fees/size---not that the
> current limit does either but the concern with an auto-adjusting size limit
> that ignores this  would be the potential to create unforeseen
> externalities for miners/users. Miners may decide it is more profitable to
> mine very small blocks to constrict supply and increase marginal fees and
> with how centralized mining is, where a dozen pools have 85% hashrate, a
> couple of pools could do this. Then on the other side, maybe the prisoner's
> dilemma would hold and all miners would have minrelaytxfee set at zero and
> users would push the blocks to larger and larger sizes causing higher and
> higher latency and network issues.
>     Perhaps something like this could work (I can only speak to the
> economic side anyway) but it would have to have some solid code that has a
> social benefit model built in to adjust to an equilibrium that is able to
> optimize---as in maximizes benefit/minimize cost for both sides via a
> Marshallian surplus model--- for each size point.
>      To be clear, I'm not saying an auto-adjusting limit is unworkable
> (again only from an economic standpoint), just that it would need to have
> these considerations built in.
>
> -Ryan J. Martin
>
>
> ________________________________________
>
> ------------------------------
>
> Message: 2
> Date: Mon, 9 Jan 2017 14:52:31 -0500
> From: "t. khan" <teekhan42 at gmail.com>
> To: Bitcoin Protocol Discussion
>         <bitcoin-dev at lists.linuxfoundation.org>
> Subject: [bitcoin-dev] BIP - Block75 - Historical and future
>         projections
> Message-ID:
>         <CAGCNRJpSV9zKxhVvqpMVPyFyXco_ABB9a7_ihaDKEKFPQ9v3sw at mail.
> gmail.com>
> Content-Type: text/plain; charset="utf-8"
>
> Using daily average block size over the past year (source:
> https://blockchain.info/charts/avg-block-size?
> daysAverageString=14&timespan=1year
> ), here's how Block75 would have altered max block sizes:
>
> [image: Inline image 1]
>
> As of today, the max block size would be 1,135KB.
>
> Looking forward and using the last year's growth rate as a model:
>
> [image: Inline image 2]
>
> This shows the max block size one year from now would be 2,064KB, if
> Block75 activated today.
>
> Of course, this is just an estimate, but even accounting for a substantial
> increase in transactions in the last quarter of 2017 and changes brought
> about by SegWit (hopefully) activating, Block75 alters the max size in such
> a way that allows for growth, keeps blocks as small as possible, *and*
> maintains transaction fees at a level similar to May/June 2016.
>
> If anyone has an alternate way to model future behavior, please run it
> through the Block75 algorithm.
>
> Every 2016 blocks, do this:
>
> new max blocksize = x + (x * (AVERAGE_CAPACITY - TARGET_CAPACITY))
>
> TARGET_CAPACITY = 0.75    //Block75's target of keeping blocks 75% full
> AVERAGE_CAPACITY = average percentage full of the last 2016 blocks, as a
> decimal
> x = current max block size
>
>
> Thanks,
>
> - t.k.
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