delvingbitcoin

Deterministic tx selection for censorship resistance

Deterministic tx selection for censorship resistance

Original Postby mcelrath

Posted on: May 9, 2024 15:43 UTC

The discussion revolves around the strategic shift towards empowering individual miners with the responsibility of transaction selection, a move proposed by both SV2 and Braidpool.

The primary aim is to decentralize this process further by moving away from the pool-dominated selection to enhance the network's resistance against state-level attacks. This approach increases the number of entities that an attacker would need to compromise in order to influence transaction inclusion within blocks, thus adding a layer of security.

However, this decentralization comes at a cost for miners, especially those with less than 1% of the network's hashrate. Such miners face a significant increase in revenue variance due to the unpredictable nature of mining rewards. While large pools can mitigate this risk, allowing more predictable earnings, independent miners are exposed to a much higher financial uncertainty. The idea of deterministic transaction selection, where transactions must be pre-mined into shares before they can be universally recognized, could potentially exacerbate this issue by limiting miners' ability to choose lucrative transactions freely.

Braidpool’s adoption of "full proportional" payout schemes also plays a crucial part in this ecosystem. Under such a model, transaction fees are distributed across the pool, preventing any single miner from claiming high-fee transactions exclusively. This system, while still under consideration, prompts further discussion on whether miners should receive additional incentives for block mining or securing high-fee transactions. The openness to exploring these dynamics suggests a complex interplay of game theory and economic incentives in pool design.

Moreover, the practice of mining never-before-seen transactions directly into shares, bypassing the traditional mempool broadcasting, is acknowledged. This method allows miners to earn out-of-band (OOB) fees but raises concerns about potential censorship through the inclusion of nonsensical transactions. The threat of a 51% attack remains pertinent, not just to the blockchain but also to the proposed share-chain system, indicating the necessity of limiting the size of the sharechain-mempool to prevent abuse.

This comprehensive analysis underscores the delicate balance between decentralization, miner autonomy, financial stability, and network security. It highlights the ongoing efforts and considerations in designing systems that not only protect against external threats but also cater to the economic realities faced by participants within the cryptocurrency mining ecosystem.