Bitcoin Q&A: Spam transactions and the fee market

Having a public immutable ledger where bitcoin holders can apply a utility value to their ownership of Bitcoins is immensely important. It's drives an intrinsic value property to Bitcoin. Having a purely monetary based transaction system is under utilizing the immutability that bitcoin and its pow scheme brings to the world. We should encourage use cases such as this.

Spam is not necessarily expensive, even with very large fees if you are a miner that controls a significant % of hashrate or part of a cartel of miners you can bid up the fee market , recoup most of the fees, and collect higher fees from others at a greater rate than they would lose from other miners including their "spam" transactions. Here is an example – https://bitcoinmagazine.com/articles/curious-case-bitcoins-moby-dick-spam-and-miners-confirmed-it/ , The solution to this concern is to insure Bitcoin mining is sufficiently decentralized

You don't get to decide…..

First impose a centralised 1Mb limit
Secondly refer to the consequences of that decision as pure market mechanics… and therefore preferable over centralised decision making

#soundreasoning…

Yeah… or we could just raise the block size.

Try getting your 1 sat/byte transactions through the network right now, I paid 90 sat/byte today and it took several hours for a single confirmation. I think this is a problem and it's going to get worse as Bitcoin becomes more popular. Now Bitcoin becoming more popular is of course a good thing, but the high fees are going to push people to look for alternatives like Litecoin, Bitcoin Cash or something like Nano which has 0 transaction fees and uses PoW as a way to prevent spam on their network. Now I'm not really a Bitcoin maximalist, but as a long time holder of bitcoins and ex-miner who cares about decentralization and security a lot I would not like to see Bitcoin lose market share because of this. A more centralized coin with not as much focus on security that lures people with cheaper fees could take over and I am somewhat worried about this. The Lightning Network is great but not the complete solution, we also need to allow bigger blocks at some point. I hear some bitcoin developers talking about $100 onchain fees being fine, but that's going to ruin usability for most people even if you use lightning. I for one am not willing to open and close a channel paying $100 each, I then say never mind thank you I will be using Litecoin or Nano instead to transact (reluctantly, because Nano lacks privacy options and Litecoin, well, it's more centralized and has less developer support).

This is starting to become a serious problem. VeriBlock is spamming the mempool, wrecking Bitcoins ability to function for smaller transactions due to the fees. Who wants to send a 5 dollar tip when 2 dollars is eaten up by fees? On the bright side it should increase the usage of the Lightning network. Hosted wallets are totally easy to use now and wallets you host yourself are getting better and better. So for my tipping or purchases I'll be able to make one main net transaction and pay one fee and then make many lightning transactions with the BTC that I moved to Lightning.

Even so, it's an attack on the main net that doesn't benefit Bitcoin so something does need to be done about it. Depending on how soon things get really bad, I expect we'll see a fix. Perhaps a version of the full node software that allows full node operators such as myself to filter out spam transactions so they are no longer broadcast through the network, much like we had during the Bip148 rebellion where we threw off the chains that Veer and Jihad were attempting to place on the community.
Repeated dust transactions from the same part of the network could be blocked. Not every full node has to do this, just enough to make a lot of the veriblock transactions fail to propagate through the network.
And if we can start to have an impact, then Veriblock will start using other blockchians or perhaps a group of blockchains to provide the proof. That's only if the business is real rather than just a disguised way to attack Bitcoin. If it's just an attack then the money will continue to be thrown in to continue the attack.
I'll mirror this comment on Dissenter just in case it gets deleted here.

Market-based economic systems: Good
Developer-based, centralized systems: Bad

Limiting block size is limiting supply. So you can't say "market forces of supply and demand" will determine price in a full-block "fee market" because YOU'RE EXCLUDING THE MARKET—on both the supply side with small blocks and demand side as priced-out users go elsewhere. It's a production quota Andreas and frankly you should know better.

Hi! Would love if you can answer this question.. What do you think of projects starting to give out stable coins as block reward to miners instead of a native token?

Thnkyou an….im korean guy….thk you…

Everythings fine until its not

This video ignores the practical capacity constraints of Bitcoin. Even with all segwit TXs it's limited to ~ 20.35 TX/s.

The introduction of loops on Lightning Network only adds more on chain TXs, doesn't resolve liquidity issues & adds additional complexity, saying you can do 1sat/byte TXs ATM when no one is using BTC except for speculation is disingenuous

Please do a video covering the issue of a fee market and realistic capacity ceilings we can expect again when we reach TX volume like we had in Dev 2017

This answer is true today when blocks are not full. If prices rise, however, I believe that will cause an increase in transactions. Due to these sort of non-transaction side uses already partly filling the blocks, the blocks will fill up by the time the price has reached 10K this time (even though blocks are effectively a little bigger than they were in 2017). In my opinion, the current tiny blocks on BTC make going over about 20K unlikely. A slow steady rise could solve the issue I see, but, that's not usually how it works and other coins will not be limited to slow growth.

Some may try to argue that rising prices or high prices will cause people to stop transacting since 'research shows people do not sell assets that are growing in value over 10% bla bla bla'. This false narrative (assumption – spread by the "troll army") is a joke when applied to crypto. It is easy to see TX volumes grow with price growth. They use that lie to get people to HODL while the whale manipulators sell at and near the peak they created.

Of all the Btc you own please invest in a decent camera and mic? love your content.
Best In the space

@3:45 – important point here and I completely agree. I have transacted in the same way for 99.9% of my transactions since Jan 2018, 15 months now. 1 sat/byte with RBF enabled just in case. Anybody that tells you that Bitcoin is too expensive has no idea what they're talking about. No need to have centralized network checkpoints and no need to wait for 10 confirmations to be sure like with bch.

Any chance we can get Mastering Ethereum on audio book?

First. PS please come back on my podcast ?