[Bitcoin-segwit2x] PROPOSAL: B0RG (Bitcoin zero replay, guarantee) - Ensuring a smooth 2X upgrade without a chain split

hubert maslin hubert.maslin at gmail.com
Tue Oct 24 16:39:50 UTC 2017


Hi Erik,

You are most definitely missing something: the total revenue streams, for
all miners mining a chain, can be unequal (because the amount of mining
power pointing at each chain can be unequal), but the odds of for one miner
to find a block are the same on both chains (because none of the chains
will adjust difficulty); it's just that the revenue from mining a block on
the B2X chain will likely be much lower than the revenue from a block
mining on the original chain.

Best regards.

2017-10-24 18:38 GMT+02:00 Dr Adam Back via Bitcoin-segwit2x <
bitcoin-segwit2x at lists.linuxfoundation.org>:

> Well difficulty during an adjustment period is independent of hashrate, so
> as many or as few miners can mine at the profit determined by difficulty
> and price. That's why some miners mine BCH when the difficulty is low due
> to the EDA bug. What happens is blocks get faster, hastening the adjustment
> period end but the faster blocks don't affect profitability.
>
> I think people are also not understanding fees. Fees on Bitcoin are often
> 1.5BTC/block, if there are priority exchange transactions people will have
> no qualms paying $10, as they are also paying 0.2% or more trade
> commission and $40 wire fees. (On either chain). Consequently a chain can
> pay for processing even with 0 reward.
>
> Adam
>
> On Oct 24, 2017 17:27, "Erik Voorhees via Bitcoin-segwit2x" <
> bitcoin-segwit2x at lists.linuxfoundation.org> wrote:
>
>> I have a question for the group...
>>
>>
>> "Given the market is showing that the 2x coin will be valued under 20%
>> of bitcoin, miners acting in self interest will mine bitcoin and the 2x
>> chain will freeze up, requiring subsidy to mine.” - Mo Adham
>>
>> -Let’s assume, immediately following the fork, 1x has 20% of hash power,
>> and 2x has 80%  (as indicated by miner signaling)
>> -Let’s assume also that the price, immediately following the fork, 1x is
>> $4,000 and 2x is $1,000  (as indicated by futures)
>>
>> Most people see the above and think, “okay, soon after the fork the
>> miners will switch back to 1x because price is higher.”
>>
>> But, is it not the case that while price might be higher, block times are
>> lower. So if you consider it from a $ revenue per day:
>> - 1x finds 28.8 blocks per day (0.2x144) and earns 360 BTC1x, or $1.44m
>> per day ($4,000 x 360)
>> - 2x finds 115.2 blocks per day (0.8x144) and earns  1440 BTC2x, or
>> $1.44m per day ($1,000 x 1,440)
>>
>> In the above case, the revenue stream of both coins is equal, at $1.44m
>> per day.  So even though one coin is priced higher, it doesn’t mean miners
>> will necessarily choose that chain to mine.
>>
>> Am I missing something?
>>
>>
>> Kind regards,
>> -Erik Voorhees
>> CEO ShapeShift AG
>>
>> On October 24, 2017 at 9:58:05 AM, Melvin Carvalho via Bitcoin-segwit2x (
>> bitcoin-segwit2x at lists.linuxfoundation.org) wrote:
>>
>>
>>
>> On 24 October 2017 at 17:47, Moe Adham via Bitcoin-segwit2x <
>> bitcoin-segwit2x at lists.linuxfoundation.org> wrote:
>>
>>> Miners need to move their funds into exchanges to sell them. If they
>>> can't deposit coins to an exchange, they become valueless.
>>>
>>> Assuming an 80-20 split, Block times for the minority chain spike to
>>> ~49.3 minutes and will remain that long for ~69 days. This would
>>> effectively block the minority chain's functionality as a payment system,
>>> as it will become increasingly impossible to deposit funds, or move them
>>> between exchanges (assuming transaction demand remains linear). Miners can
>>> prioritize their own transactions in blocks, but regular customers will be
>>> left out to dry.
>>>
>>> I don't anyone should under-estimate the negative effects of this on
>>> market participants.
>>>
>>> A lot of us have customers who expect bitcoin to just "work". If we
>>> start telling them they can't spend their money for several days/weeks, the
>>> choice of which chain is viable will quickly become clear. It will be
>>> neither Bitcoin1x or Bitcoin2x. It will be a different blockchain
>>> altogether.
>>>
>>> (To be clear, Bitaccess is neutral on this fork, we just want customers
>>> to remain happy. They way this is going, that doesn't seem to be a likely
>>> outcome)
>>>
>>
>> What typically happens is (shock horror) miners will mine in self
>> interest.  If you consider mining as a commodity, it makes sense that
>> they'll just go for the most profitable coin, and not act altruistically,
>> which was suggested in the original white paper.
>>
>> Mining is therefore common is a 0% / 100% until fees for a block make it
>> profitable to mine that block (cab take several days) or the difficulty
>> adjusts the profitability.
>>
>> This phenomenon is often referred to as "feast and famine".
>>
>> Given the market is showing that the 2x coin will be valued under 20% of
>> bitcoin, miners acting in self interest will mine bitcoin and the 2x chain
>> will freeze up, requiring subsidy to mine.  Such subsidies could be added
>> by creating a few transactions with high mining fees.
>>
>>>
>>>
>>> --
>>> *Moe Adham, MSc, BEng **|* Co-Founder
>>>
>>> *bitaccess.co <http://www.bitaccess.co/>*
>>> Cell: *+1 858 877 3420 <(858)%20877-3420>*
>>>
>>> On Tue, Oct 24, 2017 at 11:36 AM, Phillip Katete via Bitcoin-segwit2x <
>>> bitcoin-segwit2x at lists.linuxfoundation.org> wrote:
>>>
>>>> It is at this point that common sense needs to be applied. Even the
>>>> most ardent anti SegWit2x upgrade individual would snap up the “airdrop”
>>>> should there be 2 viable chains post Nov HF. That in itself is demand
>>>> enough to have a market for both tokens. The flip side is that with an
>>>> unusable chain, it matters not whether exchanges respond to user requests
>>>> for listing as you won’t be able to move your tokens anyway.
>>>>
>>>>
>>>>
>>>> *From:* Samuel Reed via Bitcoin-segwit2x
>>>> <bitcoin-segwit2x at lists.linuxfoundation.org>
>>>> *Sent:* 24 October 2017 16:31
>>>> *To:* Peter <dizzle at pointbiz.com>
>>>> *Cc:* Bitcoin Segwit2x <bitcoin-segwit2x at lists.linuxfoundation.org>
>>>> *Subject:* Re: [Bitcoin-segwit2x] PROPOSAL: B0RG (Bitcoin zero replay,
>>>> guarantee) - Ensuring a smooth 2X upgrade without a chain split
>>>>
>>>>
>>>>
>>>> Another lesson to be learned from BCH is that incentives matter - where
>>>> miners can sell coins depends on markets, and market prices depend on user
>>>> and exchange support. Even if the 80% of miners signaling 2x at this time
>>>> choose to go forward, if there are not viable markets willing to buy 2x
>>>> coins at near 1x prices, 2x hash power will quickly revert to the old chain.
>>>>
>>>> Peter wrote:
>>>>
>>>>
>>>>
>>>>
>>>>
>>>> On Oct 24, 2017 10:58 AM, "Chris Stewart via Bitcoin-segwit2x" <
>>>> bitcoin-segwit2x at lists.linuxfoundation.org> wrote:
>>>>
>>>> >RP that encourages a network split would render the NYA voidable
>>>>
>>>> Phillip, if there is consensus on one thing, it is there is going to be
>>>> a network split. Every exchange is publishing policies for the chain split.
>>>> Some even saying that they will not support the segwit2x token.
>>>>
>>>> -Chris
>>>>
>>>>
>>>>
>>>> The technical lesson from the BCH fork was that 1 hash = 1 vote.
>>>> Nothing any exchange (or custodian) said mattered. Indeed because
>>>> significant sha256 hashpower was deployed towards the fork it gained value
>>>> and customers of exchanges pressured the exchanges into the financially
>>>> sensible decision.
>>>>
>>>>
>>>>
>>>> This proposal, SegWit2x, is for the miners to decide.
>>>>
>>>>
>>>>
>>>> Transaction selection is not a consensus rule. Any miners that want to
>>>> go against the Nakamoto signaling is free to do so and the responsible
>>>> party (not the 2x devs who have no control over transaction selection). If
>>>> because of the political climate some miner sees an economic opportunity to
>>>> resurrect the legacy chain then they can modify their node (without
>>>> consensus change) to listen to 2x blocks and not mine any transaction IDs
>>>> found in the 2x chain.
>>>>
>>>>
>>>>
>>>> Additionally, to complete a safe chain resurrection such a miner can
>>>> airdrop the mining reward from the forked block (after 100 depth) and send
>>>> it to to all addresses with UTXOs over $x value. So that users of the 1x
>>>> chain can spend the combined UTXOs which cannot be replayed on 2x, as a
>>>> simple splitting solution.
>>>>
>>>>
>>>>
>>>> Safety efforts which do not require consensus changes should be
>>>> exhausted first before suggesting consensus changes.
>>>>
>>>>
>>>>
>>>> Regards
>>>>
>>>> Peter
>>>>
>>>>
>>>>
>>>>
>>>>
>>>>
>>>>
>>>>
>>>>
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>>>>
>>>>
>>>
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