Mempool Incentive Compatibility

Mempool Incentive Compatibility

Original Postby rustyrussell

Posted on: February 24, 2024 03:42 UTC

The discussion revolves around the complexities and considerations within cryptocurrency mining, particularly focusing on the distribution of fees in the mempool and its significance for determining what is incentive compatible for miners.

It highlights the need for more research to understand miner incentives fully, especially in scenarios where total fees are declining. The conversation critiques an example that involves accepting a non-standard-size transaction, pointing out that this violates fundamental assumptions and raises questions about the practical implications of such choices.

The argument also touches upon the bin-packing problem, acknowledging its theoretical suboptimality while arguing for its practical sufficiency. The emphasis is placed on the virtues of simplicity and predictability in mining practices, suggesting that these qualities are highly valued by miners. This is supported by observations that miners tend to lose real rewards when attempting complex block construction strategies, implying that the potential gains from optimizing packing strategies may not justify the efforts and costs involved.

Furthermore, the discussion suggests that when analyzing the practical differences between simple and complex schemes for block construction, the benefits of the latter are likely marginal compared to the engineering costs required for implementation and verification. This perspective promotes a pragmatic approach to solving problems within the context of cryptocurrency mining, favoring solutions that are good enough in practice over those that might be theoretically optimal but impractical or inefficient to implement.