bitcoin-dev

ossification and misaligned incentive concerns

ossification and misaligned incentive concerns

Original Postby vjudeu at gazeta.pl

Posted on: November 7, 2023 08:58 UTC

Exploration into Lightning Network-based (LN-based) mining revealed a method to earn millisatoshis from a channel partner, circumventing the need for significant CPU power typically required for a full block reward.

This was accomplished by creating a model where CPU miners receive LN transaction fee discounts through their channel partners instead of direct payments. This approach not only fosters better network connectivity but also imposes an upper limit on mining costs as transactions cannot become cheaper than free. When this threshold is reached, the miner must utilize the free transactions, sell them, or open additional channels, thus improving network structure and connectivity.

In the broader context of cryptocurrency systems, backward compatibility takes precedence over increasing supply, regardless of whether that increase is constant. Suggestions such as introducing millisatoshis on-chain or adding a tail supply have been considered, with the overarching requirement being compatibility with existing systems. Proposals for hard forks are typically dismissed without debate, while soft forks face resistance and often stall, particularly when consensus is difficult to achieve on contentious issues. This leaves no-fork solutions and second-layer innovations as the primary path forward, as they do not require community support to be implemented.

Ordinals exemplify the strength of no-fork solutions; despite the design quality, they represent a significant development because they do not necessitate a fork to exist. Their presence in the ecosystem is independent of community approval, highlighting their potential impact and resilience in the face of traditional governance obstacles in blockchain networks.