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From: "t. khan" <teekhan42@gmail.com>
Date: Tue, 10 Jan 2017 14:09:42 -0500
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To: Ryan J Martin <rjmarti2@millersville.edu>, 
	Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
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Subject: Re: [bitcoin-dev] BIP - Block75 - Historical and future projections
 (t. khan)
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As Block75 maintains blocks at 75% full (average over time), it
automatically stabilizes transaction fees at about the level they were in
May/June 2016. It will even do so through changes in transaction size and
volume caused by SegWit and Lightning.

- t.k.

On Mon, Jan 9, 2017 at 11:14 PM, Ryan J Martin via bitcoin-dev <
bitcoin-dev@lists.linuxfoundation.org> wrote:

>      The adaptive/automatic block size notion has been around for a
> while--- others would be better able to speak to why it hasn't gotten
> traction. However my concern with something like that is that it doesn't
> regard the optimal economic equilibrium for tx fees/size---not that the
> current limit does either but the concern with an auto-adjusting size limit
> that ignores this  would be the potential to create unforeseen
> externalities for miners/users. Miners may decide it is more profitable to
> mine very small blocks to constrict supply and increase marginal fees and
> with how centralized mining is, where a dozen pools have 85% hashrate, a
> couple of pools could do this. Then on the other side, maybe the prisoner's
> dilemma would hold and all miners would have minrelaytxfee set at zero and
> users would push the blocks to larger and larger sizes causing higher and
> higher latency and network issues.
>     Perhaps something like this could work (I can only speak to the
> economic side anyway) but it would have to have some solid code that has a
> social benefit model built in to adjust to an equilibrium that is able to
> optimize---as in maximizes benefit/minimize cost for both sides via a
> Marshallian surplus model--- for each size point.
>      To be clear, I'm not saying an auto-adjusting limit is unworkable
> (again only from an economic standpoint), just that it would need to have
> these considerations built in.
>
> -Ryan J. Martin
>
>
> ________________________________________
>
> ------------------------------
>
> Message: 2
> Date: Mon, 9 Jan 2017 14:52:31 -0500
> From: "t. khan" <teekhan42@gmail.com>
> To: Bitcoin Protocol Discussion
>         <bitcoin-dev@lists.linuxfoundation.org>
> Subject: [bitcoin-dev] BIP - Block75 - Historical and future
>         projections
> Message-ID:
>         <CAGCNRJpSV9zKxhVvqpMVPyFyXco_ABB9a7_ihaDKEKFPQ9v3sw@mail.
> gmail.com>
> Content-Type: text/plain; charset="utf-8"
>
> Using daily average block size over the past year (source:
> https://blockchain.info/charts/avg-block-size?
> daysAverageString=14&timespan=1year
> ), here's how Block75 would have altered max block sizes:
>
> [image: Inline image 1]
>
> As of today, the max block size would be 1,135KB.
>
> Looking forward and using the last year's growth rate as a model:
>
> [image: Inline image 2]
>
> This shows the max block size one year from now would be 2,064KB, if
> Block75 activated today.
>
> Of course, this is just an estimate, but even accounting for a substantial
> increase in transactions in the last quarter of 2017 and changes brought
> about by SegWit (hopefully) activating, Block75 alters the max size in such
> a way that allows for growth, keeps blocks as small as possible, *and*
> maintains transaction fees at a level similar to May/June 2016.
>
> If anyone has an alternate way to model future behavior, please run it
> through the Block75 algorithm.
>
> Every 2016 blocks, do this:
>
> new max blocksize = x + (x * (AVERAGE_CAPACITY - TARGET_CAPACITY))
>
> TARGET_CAPACITY = 0.75    //Block75's target of keeping blocks 75% full
> AVERAGE_CAPACITY = average percentage full of the last 2016 blocks, as a
> decimal
> x = current max block size
>
>
> Thanks,
>
> - t.k.
> -------------- next part --------------
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>
> ------------------------------
>
> _______________________________________________
> bitcoin-dev mailing list
> bitcoin-dev@lists.linuxfoundation.org
> https://lists.linuxfoundation.org/mailman/listinfo/bitcoin-dev
>
>
> End of bitcoin-dev Digest, Vol 20, Issue 21
> *******************************************
> _______________________________________________
> 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">As Block75 maintains blocks at 75% full (average over time=
), it automatically stabilizes transaction fees at about the level they wer=
e in May/June 2016. It will even do so through changes in transaction size =
and volume caused by SegWit and Lightning.<div><br></div><div>- t.k.<br><di=
v class=3D"gmail_extra"><br><div class=3D"gmail_quote">On Mon, Jan 9, 2017 =
at 11:14 PM, Ryan J Martin via bitcoin-dev <span dir=3D"ltr">&lt;<a href=3D=
"mailto:bitcoin-dev@lists.linuxfoundation.org" target=3D"_blank">bitcoin-de=
v@lists.linuxfoundation.org</a>&gt;</span> wrote:<br><blockquote class=3D"g=
mail_quote" style=3D"margin:0 0 0 .8ex;border-left:1px #ccc solid;padding-l=
eft:1ex">=C2=A0 =C2=A0 =C2=A0The adaptive/automatic block size notion has b=
een around for a while--- others would be better able to speak to why it ha=
sn&#39;t gotten traction. However my concern with something like that is th=
at it doesn&#39;t regard the optimal economic equilibrium for tx fees/size-=
--not that the current limit does either but the concern with an auto-adjus=
ting size limit that ignores this=C2=A0 would be the potential to create un=
foreseen externalities for miners/users. Miners may decide it is more profi=
table to mine very small blocks to constrict supply and increase marginal f=
ees and with how centralized mining is, where a dozen pools have 85% hashra=
te, a couple of pools could do this. Then on the other side, maybe the pris=
oner&#39;s dilemma would hold and all miners would have minrelaytxfee set a=
t zero and users would push the blocks to larger and larger sizes causing h=
igher and higher latency and network issues.<br>
=C2=A0 =C2=A0 Perhaps something like this could work (I can only speak to t=
he economic side anyway) but it would have to have some solid code that has=
 a social benefit model built in to adjust to an equilibrium that is able t=
o optimize---as in maximizes benefit/minimize cost for both sides via a Mar=
shallian surplus model--- for each size point.<br>
=C2=A0 =C2=A0 =C2=A0To be clear, I&#39;m not saying an auto-adjusting limit=
 is unworkable (again only from an economic standpoint), just that it would=
 need to have these considerations built in.<br>
<br>
-Ryan J. Martin<br>
<br>
<br>
______________________________<wbr>__________<br>
<br>
------------------------------<br>
<br>
Message: 2<br>
Date: Mon, 9 Jan 2017 14:52:31 -0500<br>
From: &quot;t. khan&quot; &lt;<a href=3D"mailto:teekhan42@gmail.com">teekha=
n42@gmail.com</a>&gt;<br>
To: Bitcoin Protocol Discussion<br>
=C2=A0 =C2=A0 =C2=A0 =C2=A0 &lt;<a href=3D"mailto:bitcoin-dev@lists.linuxfo=
undation.org">bitcoin-dev@lists.<wbr>linuxfoundation.org</a>&gt;<br>
Subject: [bitcoin-dev] BIP - Block75 - Historical and future<br>
=C2=A0 =C2=A0 =C2=A0 =C2=A0 projections<br>
Message-ID:<br>
=C2=A0 =C2=A0 =C2=A0 =C2=A0 &lt;<a href=3D"mailto:CAGCNRJpSV9zKxhVvqpMVPyFy=
Xco_ABB9a7_ihaDKEKFPQ9v3sw@mail.gmail.com">CAGCNRJpSV9zKxhVvqpMVPyFyXco_<wb=
r>ABB9a7_ihaDKEKFPQ9v3sw@mail.<wbr>gmail.com</a>&gt;<br>
Content-Type: text/plain; charset=3D&quot;utf-8&quot;<br>
<br>
Using daily average block size over the past year (source:<br>
<a href=3D"https://blockchain.info/charts/avg-block-size?daysAverageString=
=3D14&amp;timespan=3D1year" rel=3D"noreferrer" target=3D"_blank">https://bl=
ockchain.info/<wbr>charts/avg-block-size?<wbr>daysAverageString=3D14&amp;ti=
mespan=3D<wbr>1year</a><br>
), here&#39;s how Block75 would have altered max block sizes:<br>
<br>
[image: Inline image 1]<br>
<br>
As of today, the max block size would be 1,135KB.<br>
<br>
Looking forward and using the last year&#39;s growth rate as a model:<br>
<br>
[image: Inline image 2]<br>
<br>
This shows the max block size one year from now would be 2,064KB, if<br>
Block75 activated today.<br>
<br>
Of course, this is just an estimate, but even accounting for a substantial<=
br>
increase in transactions in the last quarter of 2017 and changes brought<br=
>
about by SegWit (hopefully) activating, Block75 alters the max size in such=
<br>
a way that allows for growth, keeps blocks as small as possible, *and*<br>
maintains transaction fees at a level similar to May/June 2016.<br>
<br>
If anyone has an alternate way to model future behavior, please run it<br>
through the Block75 algorithm.<br>
<br>
Every 2016 blocks, do this:<br>
<br>
new max blocksize =3D x + (x * (AVERAGE_CAPACITY - TARGET_CAPACITY))<br>
<br>
TARGET_CAPACITY =3D 0.75=C2=A0 =C2=A0 //Block75&#39;s target of keeping blo=
cks 75% full<br>
AVERAGE_CAPACITY =3D average percentage full of the last 2016 blocks, as a<=
br>
decimal<br>
x =3D current max block size<br>
<br>
<br>
Thanks,<br>
<br>
- t.k.<br>
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<br>
------------------------------<br>
<br>
______________________________<wbr>_________________<br>
bitcoin-dev mailing list<br>
<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.=
<wbr>linuxfoundation.org</a><br>
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<br>
<br>
End of bitcoin-dev Digest, Vol 20, Issue 21<br>
******************************<wbr>*************<br>
______________________________<wbr>_________________<br>
bitcoin-dev mailing list<br>
<a href=3D"mailto:bitcoin-dev@lists.linuxfoundation.org">bitcoin-dev@lists.=
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</blockquote></div><br></div></div></div>

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