Oddbean new post about login | logout I'm still seeking a rational explanation for how the Ocean pool is going to succeed in the long term if it offers miners objectively lower fee revenue than other pools.
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They'd have to compensate by innovating with things like lightning payments and low thresholds for payouts. Of course that begs the question what would they then do when the competition caught up. At some point no KYC might become a selling point. But again you'd expect some pool without the censorship of valid fee paying transactions to win that. In summary as a margin commoditized business with no moat the answer is they are doomed.
Because the difference in fee revenue won't be high enough for some ideologically minded miners to care. Though I'd be happy to bet that Ocean fails to get more than 10% a year from now, while also continuing to block "spam".
Could you imagine if they got even close to 10% of the market share in 1 year?! That would be insane.
The other benefit of Ocean is that it's much easier to verify how much fee revenue you're actually getting. Though miners can also just A/B test their hash power to figure out which pools pays better. But they're also missing out on out-of-bound payments by not having an accelerator.
That benefit is something that a non-censoring pool can easily replicate.
Indeed, in the podcast episode we introduce the idea of Ocean 2 for better comparison. But right now there is no Ocean 2, though we did not get into arguments about market efficiency :-) https://bitcoinexplainedpodcast.com/@nado/episodes/episode-86-ocean-tides-hktbg
I've actually bet play money on it having less than 1% at the end of the 2024: https://manifold.markets/harding/will-oceanxyz-find-1-of-the-final-1?r=aGFyZGluZw (A pretty easy stat to fake, so I wouldn't put too much stock in it)
in most countries being honest offers people objectively lower revenue… yet some still prefer to be that way
Are you saying you doubt ideologues in bitcoin aren't willing to pay a marginal difference for what they believe in?
I'm saying that the portion of hashrate that chooses ideology over profit maximization will be quite small and I'm skeptical it's a sustainable business model in such a highly competitive space.
I think they're competing at a kWh/hash cost basis that is not marginally different but greatly different depending on which grid they're on. Marginal differences in efficiency aren't going to make a dent I believe. Miners that are struggling over fees being too low aren't going to make it after 840,000, don't you think?
Space heater giveaways?
Because the miners who connect to this pool are there for the long term, not to scratch a few million statoshi by degrading the chain.
An inscription filled chain is perfectly valid by consensus rules.
This argument again and again... The 2010 bug with 93 billion BTC was also valid...
That’s a bug. Arbitrary data on the blockchain has been around for a long long time.
It’s not because a bug has been there for a long time that it should not be fixed.
Have fun stopping BitVM too then. Is that a bug? It will enable similar things to inscriptions.
They all have shorts on inscriptions. /s
They will be paying a much higher % of the block rewards to the miners than other pools.
What matters is unbroken mind👊
these are not just profit seeking miners, they are willing to sacrifice some profit for the health of the network, the long term value of their bitcoin outweighs the short term gains of spam fees.
That's fine, but they're not helping the network. The high fee inscriptions are just going to get mined a block later by a different pool.
people forget that bitcoiners only need miners to solve the double spending problem, without that problem miners wouldn't exist in the first place. we pay miners either directly with fees or indirectly through inflation by block subsidy to fulfil that role. if miners find other ways to increase profits thats fine for them but if it starts conflicting with solving the double spending problem, it becomes a problem. when spending becomes too expensive - not because of market demand for spending - but because of miners choosing to direct resources to processing arbitrary data instead of financial transactions, it conflicts with solving the double spending problem. there aren't many ways out of this problem but ocean is one way, i think they have long term staying power. ordinals or inscriptions come and go, we've all seen this before in the previous cycles.
ethical pooling vs predatory pooling hijacking of blockspace, which pool do you want to support that increases the stability of bitcoin for 1000yrs and save the spamming after all our grandkids get to enjoy the use of network reliably and ethically for at least 100yrs
There will always be Base-layer purists that are willing to leave a little money on the table for ideology. They don't have to make the most money, just be profitable.
Base layer purists using the lightning network... Yeah okay weirdo. That propaganda isn't gonna fly. Try again
So their position is that the base layer of Bitcoin should be for financial transactions only and is an inappropriate place to store arbitrary data. You don't think that describing that position as "purist" (financial Bitcoin transactions only) is appropriate?
I don't think "base layer purist" covers it. Sounds like you're saying they're against second layer solutions, but even with this definition of it, its like you're saying they're okay with taproot assets, which they aren't.
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