For instance if \(p\) is the peak hash rate for 365 periods or 1 year, made up of 144 blocks, \(h\) the hash rate of the last 144 blocks (1 day period), and \(r\) the base subsidy or reward for mining a block, which is currently 12.5 bitcoin, the maximum block reward can then be calculated using the formula \(0.5r (1 + h/p)\) , the lowest possible block reward being \(0.5r\) . At peak hashrate, the miner gets the full 12.5 BTC reward, otherwise the reward is determined based on the hashrate.
This is summary for a submission by Ruben Somsen on bitcoin-dev on censorship resistant transactions.
Bitcoin transactions with light client wallets involve addition of transaction fees as incentive for miners to include the transaction to the blockchain through the process of mining. This creates a win-win situation.
First, without any specific conditions, miners get paid the fees provided the transaction gets included in a valid chain with the most proof-of-work.
Secondly, the user enjoys the benefit of his transaction being added to the blockchain. The fees also ensure the security of transaction on the network as miners cannot ignore the transactions or other miners will process it because it has a reward attached.
For the full node Bitcoin Core however, conditions for adding transactions to the blockchain are more specific, one of which is that transactions can only be added to a block with a block height that is one higher than the last.
A timewarp attack on Bitcoin allows malicious miners to game the timestamp system to allow them to increase the rate of block generation beyond what the blockchain meant it to be. This attack has been possible since 2012 and was demonstrated on the testnet.
This was dismissed as an unimportant issue for the past few years as it requires the majority of hashrate and is easily blocked once someone starts using it.
An idea was brought recently about creating a coin that benefits from the digital scarcity of Bitcoin transactions. The coin works by being created from transactions whose hash is close to the non zero portion of their block hash. A single coin is created for up to N closest transactions to the block hash.
One of the drawbacks of this idea is that it could incentivize transactions for other reasons than actually transacting, thus creating an “altcoin” market on the Bitcoin blockchain in which people transact and pay fees solely for the chance of getting this coin. This can cause the Blockchain to become seriously congested and wouldn’t allow legitimate transactions to pass.
Currently bitcoin’s testnet mining is done by mining the entire mempool in every block, this can be relatively annoying to anyone doing development that depends on a fee market like fee adjusting or transaction merging. Recently a developer called on the bitcoin-dev mailing list for the maxBlockWeight of Bitcoin’s testnet to be changed to something less than the entire mempool to help wallet developers in testing. This is a reasonable suggestion as some mainnet wallets have to deal with fee-related problems like stuck transactions and fee bumping. The suggestion is very early but looks promising, we’ll be watching the mailing list for any new updates.
Right on time, the Japanese company GMO revealed their consumer grade miner. The miner has been dubbed “B2” and according to GMO:
We will mass-produce the world’s first mining machine equipped with ASIC mining chips using a cutting-edge 7 nm… GMO miner B2s sold in June will be shipped starting at the end of October 2018.
Decentralizing mining doesn’t always take the form of an algorithm change.
We propose two new mining protocols to rethink the way in which work is generated in the Bitcoin network, potentially drastically increasing effective mining decentralization.