[Bitcoin-ml] Block size credit and supporting "burst" block sizes

[Tier Nolan]

On Mon, Nov 20, 2017 at 5:34 AM, Peter Rizun <peter.rizun at gmail.com> wrote:

> (That said, if miners or node operators want to create a sort of soft
> limit within these constraints, through some decentralized signalling
> mechanism, a la BU’s EC or something else, I would see that as a beautiful
> example of emergence.  The point is that the block size limit should not be
> seen as a policy tool, and certainly not as a tool to be wielded by the
> developers.)
>

There is something to be said for formalizing that process.  I think miners
are likely to aim to maximize total revenue.

History suggests that the optimal level to give highest total fees is a low
fee price point.  That may not hold in the future, but the fees will never
be raised so high that they cripple the network.

If miners do set the block size for fee maximization then it will be set so
that many blocks will be full and will weaken the ability for the network
to handle surges.  Credits (or similar) allows the average to be set and
then block size moved to where it is needed.

On Mon, Nov 20, 2017 at 7:08 AM, Gal Buki via bitcoin-ml <
bitcoin-ml at lists.linuxfoundation.org> wrote:
> I fear that this would be a disadvantage to smaller and new miners
because they could have either only limited credit or none at all.

I think pools will still pay based on average income. Tradeable credits
would give a market price for them.

> Whereas older and larger miners could have accumulated credit during
months of mining smaller blocks.

That would be the same kind of thing as investing in hardware.  They have
an advantage since they have already paid for it.

Decaying credits might be the way to go, but that has similar problems to
decaying old UTXOs.

> We would also need to store the state based on the pool information which
could make switching pools an economic punishment.

It should balance out though.  The size credit would have a market value.
Older pools would be just "cashing out" what they earned previously.  They
would have no reason to actually pay it to their customers.

Likewise, pools which are accumulating credit rather than filling blocks
would have to pay their customers more, since they are also getting a
valuable credit.

On Mon, Nov 20, 2017 at 9:20 AM, Eli Afram via bitcoin-ml <
bitcoin-ml at lists.linuxfoundation.org> wrote:
> Correct me if I am wrong, but didn't miners enforce soft-limits in the
early days of Bitcoin in anyhow? something about 500KB, 750KB and so on?
> Can't see why, in the case of extreme blocks, this may continue to be
opted for by the miners themselves, so i'm all for it.

There was a developer set default block size.  Miners could set the block
size, but many miners went with the default.  Fees were mostly irrelevant
in those days.

The devs also set the relay policy at some fixed fees per byte.
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