{"type":"rich","version":"1.0","title":"Orfeas Stefanos Thyfronitis Litos [ARCHIVE] wrote","author_name":"Orfeas Stefanos Thyfronitis Litos [ARCHIVE] (npub1h9…9dv32)","author_url":"https://yabu.me/npub1h9v94vzhwug6qdxzldyy8vfg4vyxhftwqhalec5vjwr8hfx0fnzst9dv32","provider_name":"njump","provider_url":"https://yabu.me","html":"📅 Original date posted:2019-11-25\n📝 Original message:\nHi ZmnSCPxj,\n\n\u003e\u003e\u003e requiring a fee is equivalent to requiring proof-of-work, incentive-wise.\n\u003e\u003e\n\u003e\u003e Not necessarily, given that\n\u003e\u003e 1) there is a finite bitcoin supply but an eventually infinite PoW\n\u003e\u003e supply (relevant in the unlikely case fees are burned)\n\u003e\u003e 2) sats are transferrable, whereas PoW isn't (relevant in the case fees\n\u003e\u003e are paid)\n\u003e \n\u003e Not actually.\n\u003e Again, let me point out that PoW can be *bought*, that is precisely what Bitcoin blockchain layer does.\n\u003e And the blockchain layer PoW is bought with two things: fees and subsidies (inflation).\n\u003e Thus PoW, being purchaseable, is incentive-wise equivalent to paying somebody to spend electricity (possibly with efficiencies at scale).\n\u003e Just cut the middleman.\n\nI wasn't clear enough, sorry for that. I agree that in general PoW can\nbe bought. However if I understand this particular PoW proposal\ncorrectly, a brand-new PoW has to be created for each intermediary.\nThese PoWs cannot be reused by the intermediary for later payments (or\nfor anything else).\n\nI will now show that there exist spam-prevention schemes that differ\nonly on whether the payer gives sats or PoWs to intermediaries, such\nthat economically rational agents are incentivized to cheat in the case\nof sats but not so in the case of PoWs. This proves that fees are *not*\nequivalent to PoWs incentive-wise.\n\nIn our model, an intermediary can follow one of three possible\nstrategies (we make the assumption that other strategies are strictly\ndominated by one of the three). Each strategy results in different\nresource utilization and proceeds from fees.\n  (A) do nothing. This results in resources_A = 0 and sats_A = 0\n  (B) play honestly. resources_B \u003c 0 (negative because they constitute\nan operating cost) and sats_B = anti_spam_fee + routing_fee\n  (C) mount a plausibly deniable attack. Here resources_C \u003c 0 and sats_C\n= anti_spam_fee.\nWe assume that resources_C \u003e resources_B + routing_fee (1).\n\nIn case intermediaries receive PoWs as an anti-spam measure, it is\nanti_spam_fee = 0 which means that resources_C + sats_C \u003c 0 =\nresources_A + sats_A, therefore strategy C is strictly dominated by A.\n(The fact that A also strictly dominates B is an interesting\nobservation, but beside the point for the argument made.)\n\nOTOH, in the case of anti-spam sats, it is anti_spam_fee \u003e 0. Therefore\nwe have resources_C + sats_C \u003e resources_B + sats_B (using (1)) and for\na big enough anti_spam_fee, it is resources_C + sats_C \u003e 0, therefore\nstrategy C strictly dominates both A and B.\n\nIn other words, by just changing whether we use anti-spam PoWs or fees,\nwe change the economically rational behavior.\n\nI apologize for the previous ambiguity and I hope this has made my\nargument clearer.\n\nBest,\nOrfeas\n\n-- \nThe University of Edinburgh is a charitable body, registered in\nScotland, with registration number SC005336."}