Message-ID: <5370C6EF.8020001@thinlink.com>
Date: Mon, 12 May 2014 06:04:47 -0700
From: Tom Harding <tomh@thinlink.com>
User-Agent: Mozilla/5.0 (Windows NT 6.3; WOW64;
	rv:24.0) Gecko/20100101 Thunderbird/24.5.0
MIME-Version: 1.0
To: bitcoin-development@lists.sourceforge.net
References: <536589CC.8080005@thinlink.com>
	<CANOOu=_tpqz8wdDGj9x_xT5QcT=CHRbr+5Cewj5xuZyJ+ZurNw@mail.gmail.com>
	<537050E0.2040008@thinlink.com>
In-Reply-To: <537050E0.2040008@thinlink.com>
Content-Type: text/plain; charset=ISO-8859-1; format=flowed
Content-Transfer-Encoding: 7bit
Subject: Re: [Bitcoin-development] A statistical consensus rule for reducing
 0-conf double-spend risk
Precedence: list

Sorry to run on, a correction is needed.  A much better approximation 
requires that the rule-following minority finds the next TWO blocks, so 
the cost is

(total miner revenue of block)*(fraction of hashpower following the rule)^2

So the lower bound cost in this very pessimistic scenario is .0025 BTC,  
still quite high for one transaction.  I guess miner could try to make a 
business out of mining double-spends, to defray that cost.


On 5/11/2014 9:41 PM, Tom Harding wrote:
> Back up to the miner who decided to include a "seasoned" double-spend 
> in his block.  Let's say he saw it 21 seconds after he saw an earlier 
> spend, and included it, despite the rule.
>
> The expected cost of including the respend is any revenue loss from 
> doing so: (total miner revenue of block)*(fraction of hashpower 
> following the rule).  So today, if only 1% of hashpower follows the 
> rule (ie a near total failure of consensus implementation), he still 
> loses at least .25 BTC.
>
> .25 BTC is about 1000x the typical "double-spend premium" I'm seeing 
> right now.  Wouldn't the greedy-rational miner just decide to include 
> the earlier spend instead