
Minimum Viable Block Chain - nreece
https://www.igvita.com/2014/05/05/minimum-viable-block-chain/
======
patio11
This is a _very_ good primer on a lot of what is going on under the hood to
make Bitcoin/etc work. I particularly like how it explores emergent features
of the "protocol" that people very rarely understand, like "no block is ever
final." (I had been trying to draw an illustration explaining that today and
the words "time-ordered probability space with tree-like characteristics" may
have been used.)

~~~
im3w1l
Actually there are regular checkpoints. Hashes of some of the blocks are
hardcoded into the main bitcoin client.

[https://bitcoin.stackexchange.com/questions/3114/which-
block...](https://bitcoin.stackexchange.com/questions/3114/which-blocks-get-
to-be-checkpoints)

~~~
patio11
That's an optimization to Bitcoin Core's bootstrapping capability, not
actually a security feature, except to the very real extent that the current
version of Bitcoin Core's code is, warts and all, the only protocol
specification that matters.

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wsxcde
This is a very nice primer but I felt like it glossed over the issue of
transaction fee incentives and why grouping transactions into a block is
sufficient to ensure security.

Thinking out loud here, how does a transaction fee that is less than the
transaction value lead to a secure system? Suppose we have N transactions in a
block each with value: value_1, value_2, ... , value_N and corresponding fees:
fee_1, ..., fee_N, are we making the assumption that (fee_1 + fee_2 + ...
feeN) >= value_i for each i? I guess not and I suppose we are relying on the
fact that even if the above isn't true, a dishonest transactor/miner would not
able to attack the system because s/he doesn't have 51% of the network? If so,
then it appears there is a somewhat surprising relationship between the
largest transaction that can be securely carried out on the network and the
hashrate of the network. Because when a transaction above than a certain value
needs to be carried out, it might become profitable to just buy up enough
hashpower to be able to reverse it later!

Is the above train of thought logical or am I missing something?

And if all of the above is correct, I'd be curious to know what an estimate of
the largest safe transaction for the current bitcoin network is.

~~~
patio11
The assumption is that that a) the amount of hash power one would waste to
tinker with transactions retroactively is prohibitively expensive when you
control less than 50% versus just cooperatively mining and b) miners care
about the price of Bitcoin enough such that the short-term returns of
tinkering with any number of transactions are unattractive compared to the
massive hit they take when it becomes apparent that Bitcoin is insecure and
the price crashes.

I am reporting widespread beliefs rather than endorsing them. Assumption A is
problematic if you believe selfish mining is practical. Assumption B is
problematic because the history of the largest pool using double spends
against a disfavored merchant without meaningful consequences contradicts it.

~~~
wsxcde
I hear what you are saying. What I'm interested in exploring the consequences
around rational behavior should if you make the assumption that (a) each unit
of GH/s has a certain cost, (b) the miners are expecting to recover this cost,
(c) for an ethical player this cost can be recovered through the sum of the
block reward and transaction fees, and (d) an unethical player could also
attempt to recover the mining costs by performing a double spend attack.

My question is for what transaction values does (d) become a viable and
rational strategy.

The reason I ask this question is because mining is hugely more expensive
operation in comparison to a centralized transaction processing system. It is
_way_ more inefficient to have hundreds and thousands of computers chugging
away trying to shove a SHA puzzle than it is to just do a simple atomic
database update. So somebody must be paying for this and the question is who?
And what is all this really costing them. And from this, the next question
that follows is what is the impact of the mining reward/cost on what can be
secured by the network? So that is the question I was really trying to get at.
I'd be interested in hearing your thoughts on this or pointers to analyses
along these lines.

------
wmf
Previous discussion:
[https://news.ycombinator.com/item?id=7699332](https://news.ycombinator.com/item?id=7699332)

