What ultimately happens to mining if blocks contain mostly non-Bitcoin data?

1

I'm trying to understand what can happen if

  • A block consists entirely of 3rd party (xCoin) data like Namecoin
  • There are no Tx fees to collect since they are on alternate chains.
  • Assume that the Block reward is quite low (0.25 BTC).

How will mining be profitable?

If the 3rd party data must subsidize mining, what would that subsidy look like within a block?

halfbit

Posted 2013-03-06T15:30:17.387

Reputation: 12 166

Exchange rate would be 1000 USD per BTC, so 250 USD per block is not bad.. :) – vi.su. – 2013-03-06T16:04:18.490

3@vi.su [citation needed] – Nick ODell – 2013-03-06T16:24:54.103

@makerofthings "A block consists entirely of 3rd party (xCoin) data like Namecoin" NameCoin merged mining adds 32 bytes - which is about 1/5 of one transaction. – Nick ODell – 2013-03-06T16:29:10.187

@NickODell Just as Namecoin was invented as an alt chain, what I create one, and then some state does as well. Add a few others and the quantity of bytes increases.... – halfbit – 2013-03-06T16:45:17.017

If a transaction (e.g., xCoin, your example) isn't "paying the freight" it will be cast aside (e.g., take longer to confirm.) If system-wide fees are lower, mining capacity drops to match. That's not a problem unless 51% is a real concern, and that's not a real concern now. – Stephen Gornick – 2013-03-06T18:07:32.473

Bitcoin reward would be 0.25 BTC in 30 years. 1000 USD exchange rate per BTC is just speculation.. – vi.su. – 2013-03-07T01:19:47.253

Answers

1

Whoever discovers the block can choose what information to put into it. Therefore a miner that finds a hash that has a sufficient level of difficulty can choose to only include transactions that actually pay their transaction fee.

placeybordeaux

Posted 2013-03-06T15:30:17.387

Reputation: 853

Could they also include arbitrary data as well? – halfbit – 2013-03-06T18:06:46.330

I am not quite sure, the bitcoin wiki doesn't seem to know. You seemed to have believed that you can, what lead you to believe that? – placeybordeaux – 2013-03-06T21:24:44.737