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From: Nadav Ivgi <nadav@shesek.info>
Date: Thu, 2 Mar 2023 02:39:13 +0200
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To: Giuseppe B <beppeben2030@gmail.com>, 
 Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
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Subject: Re: [bitcoin-dev] Minimum fees
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Hi Giuseppe,

One side-effect this has is that until enough fees accumulate in the
mempool to satisfy min_fees, the rational behaviour for miners would be to
try and fork the chain tip, competing for the fees in the latest block
(+whatever got into the mempool in the meanwhile and can fit in). This
could lead to increased reorgs/orphan rates and chain instability. It could
also lead to miners preferring to set their low_fee to zero, to avoid other
miners from forking their blocks off.

I'm also not sure that this would actually change much. If humanity is
willing to spend X BTC/day on mining fees, it doesn't really matter if it's
spread out through fewer or more blocks.

shesek

On Wed, Mar 1, 2023 at 10:25 PM Giuseppe B via bitcoin-dev <
bitcoin-dev@lists.linuxfoundation.org> wrote:

> Hello everyone,
>
> I'm relatively new here so what I'm proposing could have already been
> discussed, or may be flawed or inapplicable. I apologize for that.
>
> I was picturing a situation where block rewards are almost zero, and the
> base layer is mainly used as a settlement layer for relatively few large
> transactions, since the majority of smaller ones goes through LN.
>
> In such a case it may very well be that even if transaction amounts are
> very consistent, transaction fees end up being very small since there is
> enough space for everyone in a block. Users wouldn't mind paying higher
> fees as they know that that would increase the network security, however
> nobody wants to be the only one doing that. Miners would of course like
> being paid more. So everyone involved would prefer higher fees but they
> just stay low because that's the only rational individual choice.
>
> Therefore I was imagining the introduction of a new protocol rule,
> min_fees, that would work like this:
> - the miner that gets to mine a block appends a min_fee field to the
> block, specifying the minimum fees that need to be contained in the
> following block in order for it to be valid.
> - one can also mine an empty block and reset the min_fee, to avoid the
> chain getting stuck.
>
> min_fees could either represent the total fees of the following block, or
> the minimal fee for each single transaction, as a percentage of the value
> transacted. Both seem to have some merits and some potential drawbacks. Of
> course min_fees=0 would correspond to the current situation.
>
> It looks to me that this could have the potential to bring the equilibrium
> closer to a socially optimal one (as opposed to individually optimal), and
> to benefit the network security in the long term. Of course it's just a
> rough sketch and it would deserve a much deeper analysis. I was just
> interested in knowing if you think that the principle has some merit or if
> it's not even worth discussing it for some reason that I'm not considering.
>
> Cheers,
>
> Giuseppe.
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>

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<div dir=3D"ltr"><div>Hi Giuseppe,</div><div><br></div><div>One side-effect=
 this has is that until enough fees accumulate in the mempool to satisfy mi=
n_fees, the rational behaviour for miners would be to try and fork the chai=
n tip, competing for the fees in the latest block (+whatever got into the m=
empool in the meanwhile and can fit in). This could lead to increased reorg=
s/orphan rates and chain instability. It could also lead to miners preferri=
ng to set their low_fee to zero, to avoid other miners from forking their b=
locks off.</div><div><br></div><div>I&#39;m also not sure that this would a=
ctually change much. If humanity is willing to spend X BTC/day on mining fe=
es, it doesn&#39;t really matter if it&#39;s spread out through fewer or mo=
re blocks.</div><div><br></div><div>shesek<br></div></div><br><div class=3D=
"gmail_quote"><div dir=3D"ltr" class=3D"gmail_attr">On Wed, Mar 1, 2023 at =
10:25 PM Giuseppe B via bitcoin-dev &lt;<a href=3D"mailto:bitcoin-dev@lists=
.linuxfoundation.org">bitcoin-dev@lists.linuxfoundation.org</a>&gt; wrote:<=
br></div><blockquote class=3D"gmail_quote" style=3D"margin:0px 0px 0px 0.8e=
x;border-left:1px solid rgb(204,204,204);padding-left:1ex"><div dir=3D"ltr"=
>Hello everyone,<div><br></div><div>I&#39;m relatively new here so what I&#=
39;m proposing could have already been discussed, or may be flawed or inapp=
licable. I apologize for that.</div><div><br></div><div>I was picturing a s=
ituation where block rewards are almost zero, and the base layer is mainly =
used as a settlement layer for relatively few large transactions, since the=
 majority of smaller ones goes through LN.</div><div><br></div><div>In such=
 a case it may very well be that even if transaction amounts are very consi=
stent, transaction fees end up being very small since there is enough space=
 for everyone in a block. Users wouldn&#39;t mind paying higher fees as the=
y know that that would increase the network security, however nobody wants =
to be the only one doing that. Miners would of course like being paid more.=
 So everyone involved would prefer higher fees but they just stay low becau=
se that&#39;s the only rational individual choice.</div><div><br></div><div=
>Therefore I was imagining the introduction of a new protocol rule, min_fee=
s, that would work like this:=C2=A0</div><div>- the miner that gets to mine=
 a block appends a min_fee field to the block, specifying the minimum fees =
that need to be contained in the following block in order for it to be vali=
d.</div><div>- one can also mine an empty block and reset the min_fee, to a=
void the chain getting stuck.</div><div><br></div><div>min_fees could eithe=
r represent the total fees of the following block, or the minimal fee for e=
ach single transaction, as a percentage of the value transacted. Both seem =
to have some merits and some potential drawbacks. Of course min_fees=3D0 wo=
uld correspond to the current situation.</div><div><br></div><div>It looks =
to me that this could have the potential to bring the equilibrium closer to=
 a socially optimal one (as opposed to individually optimal), and to benefi=
t the network security in the long=C2=A0term. Of course it&#39;s just a rou=
gh sketch and it would deserve a much deeper analysis. I was just intereste=
d in knowing if you think that the principle has some merit or if it&#39;s =
not even worth=C2=A0discussing it for some reason that=C2=A0I&#39;m=C2=A0no=
t considering.</div><div><br></div><div>Cheers,</div><div><br></div><div>Gi=
useppe.</div><div><br></div></div>
_______________________________________________<br>
bitcoin-dev mailing list<br>
<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org" target=3D"_blank">=
bitcoin-dev@lists.linuxfoundation.org</a><br>
<a href=3D"https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev" =
rel=3D"noreferrer" target=3D"_blank">https://lists.linuxfoundation.org/mail=
man/listinfo/bitcoin-dev</a><br>
</blockquote></div>

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