Some OCEAN miners have started leveraging the coin age priority algorithm while creating the block template using DATUM. Originally, Bitcoin Core originally selected transactions to include in blocks based on what they first saw in their block of notes. This logic was eventually replaced by prioritizing older coins, i.e. those that had remained unspent for a longer period of time, over other coins. This was eventually applied to only a small portion of the block space, and then was phased out completely around the time of Segwit. It still exists on Bitcoin Knots.
I can only speculate on the miners’ motivations for doing this, but looking at OCEAN’s letter I can guess that it has to do with prioritizing “financial” transactions at the expense of others. Even if this is not the case, even if it is only to help small-value UTXO holders, it is still completely irrational.
You can partition block space as a miner however you like, and prioritize the order of transactions however you like within those partitions, but that doesn’t change the fact that block space is a fungible commodity that is valued on the open market. If criteria other than fees are used to determine which transactions to include, you will be leaving money on the table. The only situation where this would not be true is one where those criteria were a 1:1 match to the decision based on the fees, which would be a meaningless criterion.
Creating a subdivision of block space defined by other criteria ultimately accomplishes two things: 1) leaving money on the table as a miner, as any meaningful non-privileged criteria results in lower fees being charged, and 2) creating a pool of block space submitted to miners Competitive ‘fees’ depending on whichever different standards are used, without any of these pressures resulting in a direct increase in revenue for miners using these new standards.
The new subdivision of the block space does not ultimately reduce fee pressure, it simply leaves them earning less money and users benefiting from these new transaction selection criteria that are subject to various competitive pressures that miners do not directly benefit from.
You can’t hide from the fact that block space is a fungible commodity with prices on the open market. You can accept it, or you can lose money. The only alternative is to try in vain to censor classes of transactions you don’t like, and if you succeed, destroy a fundamental property of Bitcoin in the process.
Keeping mining decentralized, and widely distributed with many small operators, is crucial to censorship resistance in Bitcoin. It is a shame to see signs like these that these small-scale miners are economically irrational, as it has huge implications for their long-term success.
This article is a takes. The opinions expressed are entirely those of the author and do not necessarily reflect the opinions of BTC Inc or Bitcoin Magazine.
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