[Bitcoin-segwit2x] Bitcoin-segwit2x Digest, Vol 5, Issue 108
James Walton
jimmy2991 at icloud.com
Tue Oct 24 17:33:20 UTC 2017
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> Today's Topics:
>
> 1. Re: PROPOSAL: B0RG (Bitcoin zero replay, guarantee) -
> Ensuring a smooth 2X upgrade without a chain split (David A. Harding)
> 2. Re: PROPOSAL: B0RG (Bitcoin zero replay, guarantee) -
> Ensuring a smooth 2X upgrade without a chain split (Chris Stewart)
>
>
> ----------------------------------------------------------------------
>
> Message: 1
> Date: Tue, 24 Oct 2017 13:00:27 -0400
> From: "David A. Harding" <dave at dtrt.org>
> To: Erik Voorhees <erik at shapeshift.io>
> 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
> Message-ID: <20171024170026.t66rhqbgjq25yh6d at fedora-23-dvm>
> Content-Type: text/plain; charset="us-ascii"
>
>> On Tue, Oct 24, 2017 at 09:27:37AM -0700, Erik Voorhees via Bitcoin-segwit2x wrote:
>> 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)
>>
>> Am I missing something?
>
> Umm, yeah. 2x did four times as much work to make the same amount of
> money as 1x. By, "work", I of course mean that they expended four times
> as much electricity and tied up four times as much capital equipment.
>
> Maybe this isn't obvious since you're treating 1x miners and 2x miners
> as a group, but if you consider them as individual miners, it becomes
> clear that there's a strong incentive to defect to the more profitable
> chain. For example:
>
> Average daily blocks | 1x potential revenue | 2x potential revenue
> -------+----------------------+-----------------------+-----------------------
> Alice | 5 | 5*12.5*4000 = 250k | 5*12.5*1000 = 62.5k
> Bob | 10 | 10*12.5*4000 = 500k | 10*12.5*1000 = 125.0k
> Chalie | 25 | 25*12.5*4000 = 1,500k | 25*12.5*1000 = 312.5k
>
> You can replace "average daily blocks" with "kiloWatt hours (kWh) plus
> capital equipment depreciation costs" for a difficulty-neutral factor.
>
> -Dave
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> ------------------------------
>
> Message: 2
> Date: Tue, 24 Oct 2017 12:11:41 -0500
> From: Chris Stewart <chris at suredbits.com>
> To: Erik Voorhees <erik at shapeshift.io>
> Cc: Melvin Carvalho via 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
> Message-ID:
> <CAGL6+mHjaVBLW6G4Z0f6xYsPXauNs-6kbiFQ9i=X0gns6am6bg at mail.gmail.com>
> Content-Type: text/plain; charset="utf-8"
>
> Don't forget about transaction fees. If blocks are slower on bitcoin, an
> auction effectively starts on block space. If the economic majority is
> still using the bitcoin blockchain, while the majority of miners are mining
> the segwit2x chain we will see a large backlog that causes tx fees to
> increase in price. The bitcoin blockchain miners will make a killing in
> collecting those fees while segwit2x miners (if the economic majority stays
> with bitcoin) will miss out on them.
>
> -Chris
>
> On Tue, Oct 24, 2017 at 11:27 AM, 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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