To: Luke Dashjr <luke@dashjr.org>, bitcoin-dev@lists.linuxfoundation.org
References: <bc69d684-3d6e-624e-a859-c2ef8ad5cb13@posteo.net>
 <202102271755.02271.luke@dashjr.org>
From: Gregorio Guidi <greg_g@posteo.net>
Message-ID: <106cf945-b8a1-d656-0c92-ea9fd02ed0ab@posteo.net>
Date: Sun, 28 Feb 2021 00:49:46 +0100
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Subject: Re: [bitcoin-dev] Exploring alternative activation mechanisms:
 decreasing threshold
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On 2/27/21 6:55 PM, Luke Dashjr wrote:
> This has the same problems BIP149 did: since there is no signalling, it is
> ambiguous whether the softfork has activated at all. Both anti-SF and pro-SF
> nodes will remain on the same chain, with conflicting perceptions of the
> rules, and resolution (if ever) will be chaotic. Absent resolution, however,
> there is a strong incentive not to rely on the rules, and thus it may never
> get used, and therefore also never resolved.
>
> Additionally, it loses the flexibility of BIP 8 to, after the initial
> deployment, move the timeoutheight sooner.
>
> Luke

I see the point about possible problems of not having immediate 
resolution in the case of a contentious activation. I guess in such 
cases a certain amount of chaos is unavoidable... I see the alternatives 
of BIP8(lot=true) and Decresing Thresholds as a choice between having 
the chaos earlier (BIP8), or leaving it dormant with the possibility of 
having it later (Decreasing Thresholds). You might be right: there is a 
cost in pushing forward the resolution, but overall I think the risks 
are roughly comparable.

Trying to see this scenario from a more general perspective (at this 
point the debate is more theoretical than practical, forgive me for 
that): let's we are say in the soft-fork situation where Core is at 
version X and a new version Y is released with new consensus rules to be 
activated. The risk that nodes at version X do not upgrade and start 
following an invalid chain (invalid for Y) cannot be completely avoided. 
So there is a basic choice to make as a first step:

  * Option 1 (only safe soft-fork activation): Core decides that 
activating the soft fork can only be done with a strong guarantee that 
most of the hashrate follows version Y. This gives assurance that an 
invalid chain, if it appears, will be short-lived. That is: only 
lot=false is allowed for BIP8.

  * Option 2 (possibly unsafe soft-fork activation): Core accepts the 
risk that the activation occurs even when there is no guarantee that 
most of the hashrate (or even a majority of the hashrate) follows Y, 
because the advantages of activation outweigh the risks. That is: Core 
will consider activation mechanisms stronger than BIP8(lot=false).

This is a difficult choice, and honestly I wouldn't blame at all the 
Core devs if they go for option 1, as it is the safest on paper. But 
here we are considering what happens under option 2...

Under option 2, the risk can be mitigated in various ways, with the key 
factors being these assumption:

  * Assumption A1: there is strong evidence (gathered before and during 
the development of the soft-fork) that version Y will be adopted by the 
"economic majority", meaning that miners that mine a block invalid for Y 
are very likely to not have the value of the block recognized by the 
counterparties with which they normally transact. In other words: mining 
invalid blocks likely leads to an economic loss.

  * Assumption A2: enough lead time is given before a possibly unsafe 
activation, so that during this period it is possible to diffuse widely 
and loudly the message on the risks associated to not upgrading to Y. 
Given enough time, most economic agents will have made up their mind and 
acted accordingly (by upgrading, or possibly by forking themselves off 
from the Y chain in a safe manner, creating a forked coin).

I think both BIP8(lot=true) and Decreasing Threshold work decently under 
these assumptions. But in the worst case bip8(lot=true) forces 
resolution immediately upon activation, forcing an economic loss 
immediately on non-upgraded miners, while Decreasing Threshold keeps the 
issue lingering a bit more but is more lenient, forcing the economic 
loss on the miners only at the moment that they mine an invalid block. 
In addition, it gives more time for upgrading (and better fulfilling 
assumption A2) before and after activation.

About the final point on BIP8 flexibility, I can say that sometimes not 
having to take a difficult choice can be an advantage... :)

Thanks for your insight and for your work, cheers,

Gregorio


> On Thursday 25 February 2021 22:33:25 Gregorio Guidi via bitcoin-dev wrote:
>> Hello,
>>
>> I followed the debate on LOT=false / LOT=true trying to get a grasp of
>> the balance of risks and advantages. The summary by Aaron van Wirdum [1]
>> explains well the difficulties to find a good equilibrium... it
>> concludes that "perhaps, a new possibility will present itself".
>>
>> Thinking about such a "new possibility" that overcomes the
>> LOT=true/false dichotomy, I would like to offer the following proposal.
>> It could be called "decreasing threshold activation".
>>
>> Decreasing threshold activation works similarly to BIP8, with the
>> difference that the threshold that triggers the STARTED -> LOCKED_IN
>> transition starts at 100% for the first retargeting period, and then is
>> gradually reduced on each period in steps of 24 blocks (~1,2%). More
>> precisely:
>>
>> On the 1st period (starting on start_height): if 2016 out of 2016 blocks
>> signal, the state is changed to LOCKED_IN on the next period (otherwise
>> stays STARTED)
>> On the 2nd period: if 1992 out of 2016 blocks signal (~98.8%), the state
>> transitions to LOCKED_IN on the next period
>> On the 3rd period: if 1968 out of 2016 blocks signal (~97.6%), the state
>> transitions to LOCKED_IN on the next period
>> ...
>> On the 14th period (~6 months): if 1704 out of 2016 blocks signal
>> (~84.5%), the state transitions to LOCKED_IN on the next period
>> ...
>> On the 27th period (~12 months): if 1392 out of 2016 blocks signal
>> (~69.0%), the state transitions to LOCKED_IN on the next period
>> ...
>> On the 40th period (~18 months): if 1080 out of 2016 blocks signal
>> (~53.6%), the state transitions to LOCKED_IN on the next period
>> ...
>> On the 53th period (~24 months): if 768 out of 2016 blocks signal
>> (~38.1%), the state transitions to LOCKED_IN on the next period
>> ...
>> On the 66th period (~30 months): if 456 out of 2016 blocks signal
>> (~22.6%), the state transitions to LOCKED_IN on the next period
>> ...
>> On the 79th period (~36 months): if 144 out of 2016 blocks signal
>> (~7.1%), the state transitions to LOCKED_IN on the next period
>> ...
>> On the 84th and final period (~39 months): if 24 out of 2016 blocks
>> signal (~1.2%), the state transitions to LOCKED_IN on the next period,
>> otherwise goes to FAILED
>>
>> (For reference, I include below a snippet of pseudocode for the
>> decreasing thresholds in the style of BIP8 and BIP9.)
>>
>> Here are the main features and advantages of this approach:
>>
>> 1. It is relatively conservative at the beginning: for activation to
>> happen in the first year, it requires a clear majority of signaling
>> hashrate, indicating that the activation is relatively safe. Only later
>> the threshold starts to move towards "unsafe" territory, accepting the
>> tradeoff of less support from existing hashrate in exchange for ensuring
>> that the activation eventually happens.
>>
>> 2. Like LOT=true, the activation will always occur in the end (except in
>> the negligible case where less than 1.2% of hashrate supports it).
>>
>> 3. This approach is quite easy to implement, in particular it avoids the
>> extra code to deal with the MUST_SIGNAL period.
>>
>> 4. There are no parameters to set (except startheight). I am a KISS fan,
>> so this is a plus for me, making the activation mechanism robust and
>> predictable with less chance for users to shoot themselves in the foot.
>> It is also a plus for me that - if adopted as the default mechanism - it
>> would require very little discussion on how to activate future
>> soft-forks. In fact I think it would be a winning move for Core to
>> commit to such a scheme, to avoid getting lost in game-theoretic rabbit
>> holes.
>>
>> 5. Since there is no MUST_SIGNAL period, no automatic chain split occurs
>> around activation when not all miners have upgraded (so activation is
>> generally as benign as a MASF). A chain split will occur only when/if an
>> invalid block is created (and this requires dedicated effort! it can
>> only happen by circumventing the normal policy rules [2]). This
>> mitigates the risk of reorgs and involuntary forks around activation,
>> even with low miner signaling.
>>
>> 6. It removes motivation to create UASF clients that force activation.
>> While individual nodes could still try to force a quicker activation,
>> the motivation to do so is reduced since the same result is obtained
>> just by waiting a little more.
>>
>> 7. Compared to LOT=true, activation is cleaner and quicker when it is
>> relatively safe to do so (when the signaling hashrate is - let's say -
>> in the 70%-80% range). On the other hand, activation is pushed further
>> and further in time when it is less safe (when signaling hashrate is
>> <50%, meaning that there is a serious risk that users/miners that did
>> not upgrade start following an alternative chain). This gives everyone
>> time to prepare properly for such a potentially disruptive event.
>>
>> 8. If a significant number of users and miners consciously decide (for
>> whatever reasons) that they don't want to upgrade and want to fork
>> themselves off from the chain followed by Core (as is their
>> prerogative), they will have time to do so safely.
>>
>> 9. Compared to the strategy of doing LOT=false and then LOT=true if it
>> fails, using the decreasing threshold approach may not seem very
>> different. But it completely removes the need to fiddle with different
>> client releases and with the issues associated with deployed nodes with
>> different consensus parameters.
>>
>> All in all, reading the various perspectives on this mailing list and
>> outside I have the feeling that the strongest arguments against LOT=true
>> have at their core a certain uneasiness with the MUST_SIGNAL mechanism
>> and the related automatic chain split on activation, which is something
>> that greatly complicates the analysis (but please tell me if I am
>> wrong...). In this sense, this proposal achieves the big objective of
>> always ending in activation (like LOT=true) without resorting to
>> MUST_SIGNAL and chain splits.
>>
>> A final note: this proposal should be seen as somewhat independent from
>> the discussion on taproot activation. Personally I would be happy with a
>> LOT=false activation for taproot that succeeds quickly, while the
>> decreasing threshold approach could be evaluated as potential default
>> activation mechanism for the future.
>>
>> I would be happy to hear what you think about this. What are the
>> possible issues/drawbacks of using this mechanism?
>>
>> Thanks,
>>
>> Gregorio
>>
>> [1]
>> https://bitcoinmagazine.com/articles/lottrue-or-lotfalse-this-is-the-last-h
>> urdle-before-taproot-activation
>>
>> [2] This was not the case in the past for upgrades such as BIP16 (P2SH),
>> which generated frequent reorgs due to a combination of low activation
>> threshold (55%) and no policy protection. But for upgrades such as
>> taproot the normal policy rules prevent the creation of invalid blocks
>> by non-upgraded miners. See
>> https://blog.bitmex.com/the-arts-of-making-softforks-protection-by-policy-r
>> ule/
>>
>> Pseudocode:
>>
>>           case STARTED:
>>               int elapsed_periods = (block.height - startheight) / 2016;
>>               if (elapsed_periods > 2016 / 24) {
>>                   return FAILED;
>>               }
>>               int threshold = 2016 - 24 * (elapsed_periods - 1);
>>               int count = 0;
>>               walk = block;
>>               for (i = 0; i < 2016; i++) {
>>                   walk = walk.parent;
>>                   if (walk.nVersion & 0xE0000000 == 0x20000000 &&
>> (walk.nVersion >> bit) & 1 == 1) { ++count;
>>                   }
>>               }
>>               if (count >= threshold) {
>>                   return LOCKED_IN;
>>               }
>>               return STARTED;
>>
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