Peercoin Advantage: Consistent txn fees and queue processing?

General
1

I noticed this last night, while watching incoming Bitcoin transactions on Blockchain.info during the height of the price volatility. Perhaps this is a misunderstanding on my part, but I saw something interesting that I had not considered before (simplified from a lot of records I looked at):

Transaction A @ 10:01 PM
5.0 BTC
Txn fee: 0.0 BTC
Estimated time to confirmation: 36 hours (place in queue 3908)

Transaction B @ 10:02 PM
5.0 BTC
Txn fee: 0.001 BTC
Estimated time to confirmation: 59 minutes (place in queue 24)

Looking at the two, initially, I could not understand why one would be on track to confirm within the hour, while the other would take 1 1/2 days, until I noticed the difference in the transaction fees were different.

Given that Bitcoin’s Proof-of-Work design is built around mining for coins and and processing transactions to make money, it makes logical sense to me that a given transaction that included a fee would be expedited over a transaction that didn’t include a fee.

Is this an accurate summary of why those two transactions had such wildly different estimated confirmation times?

If it is true, and it seems like a major thing that people should know about, is this a place where Peercoin’s design is superior? From my understanding of the Peercoin mechanics, all transactions above a certain point include a transaction fee that is destroyed by the system, meaning that queuing would be handled by the order in which the transaction was processed, rather than by allowing certain transactions to be expedited at the detriment of others. To be able to say, “your Peercoin transactions will be confirmed quicker than any of the other currencies” has a lot of weight, if it’s true.

It’s very likely that I’m misunderstanding how the BTC transactions are being handled (or what happens on the PPC side, for that matter), and that I’m incorrectly blaming the transaction fee for the difference in processing time, but, if I’m not, is this an opportunity for Peercoin to continue to differentiate itself from competitors?

2

I believe you are correct Ben. Miners receive the fees included in BTC transactions so have an incentive to include those with transaction fees quicker than those that don’t.

3

This is the reason fee-free transactions are not allowed in ppc and xpm. Bitcoin has a convoluted fee system so that they can make the claim that you don’t have to pay any fee if you don’t want to. However this would cause lots of confusions and headaches to the users. It just doesn’t worth the trouble in my opinion. It wasn’t a problem earlier because the transaction volume on bitcoin network was still low. Now it begins to rear its ugly head more and more.

4

@Sunny, would you agree that it’s a point that we should promote wider? The ability to consistently estimate when a transaction will be confirmed through the system is, at least to me, very valuable. Knowing that Peercoin offers that level of consistency may be just the catalyst needed to influence businesses to take a look at PPC.

Before I ran out, shouting about this at the top of my lungs, are there caveats to this? For instance, during times when the network experiences a significant increase in transactions, is it possible to estimate the “time to confirmation” given the available network hash rate and the number of transactions that in queue?

5

have we fixed fee at XPM and is \it 0,01 XPM ?
dont you think that this could make some problem if primecoin will be worth over 100$ ? (over 1$ fee for transaction ?)
what happen if someone want to send 0,1 XPM then? he will loss 10% of his money ?

and i have another 3 questions to sunny (a few friend ask me about that and i couldnt anserw):

  1. from wikipedia http://en.wikipedia.org/wiki/Primecoin “To meet this requirement, the size of the prime numbers in the system cannot be too large”. What could happen when we cross 10 or 100 mln block and the prime numbers start to be large?
  2. “If the coin is successful and prime number theorists can use the results to find an equation to predict prime #s, it would essentially break the coin’s PoW.” -> is it possible?
  3. is it possible to implement feature to primecoin that reward couldn’t go up ? i mean if we reach reward 10,03 then we cant go up to 10,04 or 10,07 like now. Then the moore law will be implemented, but we can estimate how much primecoin will be in the future. if people leave a network then other have block more frequently so still be some factor which stabilization the network. It is possible to implement this ?

i’m looking forward for the answers
sorry for my english

6

@Ben, bitcoin is hitting the usability issue of fee-free transaction, although there is also another usability issue that even fee-paying transaction would eventually hit with fixed block size limit. PPC & XPM solves the issue with fee-free transaction by not allowing them, and avoid/lessen the issue of slow transaction processing by setting a protocol enforced minimum fee with relative high value (0.01 per KB).

@satriani: Fee is not guaranteed to be fixed at 0.01 but it’s not going to be adjusted aggressively as bitcoin, because this cost is a reflection of the scalability of the blockchain system. It must be balanced with the capacity of the system. So $1 fee sounds high but it’s not a big deal for a backbone currency as I explained before, do you rather pay a tiny fee but having to rely on unreliable service providers or waiting for days syncing block chain?

  1. Prime size would stay same. The prime chains aren’t going to be exhausted. There are countless prime numbers, basically as abundant as numbers themselves. Remember there is a prime every couple of hundred numbers at the scale primecoin miners work. So for a 256 bit number there are more than 2^248 primes, so that’s not far from 2^256 which is the total numbers at 256 bit.
  2. Prime number theory is an extreme hard discipline, with hundreds of years of history. So it’s not very likely to happen overnight. I’d say even if you throw trillions dollars at such research it’s not going to produce that type of results on demand. Also, even if you find a super efficient mining algorithm doesn’t mean you ‘break’ the proof-of-work system, it just means you have an advantage over the public before you publish the findings. The difficulty can scale enormously in primecoin’s design.
  3. That would be a bad idea in my opinion. We want the reward to be capable of increasing as well so to stabilize the computing power of the network. The reward rate still tracks Moore’s Law even though it can fluctuate lower and higher.
7

Wouldn’t it be better if the transaction fee (%) rises proportionally to the length of confirmation time? That way the market would self-regulate the load and eventually adjust to what fee is appropriate. If we had faster computers, then the fees would also decrease etc. etc. If the confirmation time would take very long, and the fees are proportionally high, then people would stop transacting and this will reduce the load. I do think that the fixed fees in PPC is bottlenecking its growth. It’s looking as if the fees are “controlled” centrally by someone. I think it’s better to let the market decide.

8

This mechanism is already available in bitcoin, thus inherited by ppc and xpm. So in ppc/xpm fee competition can still happen at high volume time. However the minimum transaction fee is high enough to discourage this from happening often. The fee competition and market adjusted fee rate sounds nice in theory, but in practice it would cause a lot of confusions and degradation of service to the users. Imagine this conversation: ‘hey dude what’s a good btc fee rate to avoid waiting for days to confirm a send? okay forget it let me send you ppc/xpm instead …’ :wink:

9

I still hope in the future we can have a perfect currency that requires no modification in the code such as changing the fixed fees from time to time when the value of PPC goes up - everything dynamic and automatically adjusted by the market. We remove all control over the system and let it do its thing - a system so perfect that no one dare to change anything in the code. It would be a pain to manually adjust the txn fees in the future. It would create headaches amongst the users and developers as to how much the txn fees should be. The consent of all PPC users wouldn’t be taken into consideration if ever the fixed txn fee would change in the future. We want a completely decentralized currency after all.

10

I just translated the reply from Sunny into Chinese.

强制收取0.01交易费的PPC能够处理大量交易吗？Sunny King的回答
http://8btc.com/forum.php?mod=viewthread&tid=1640&fromuid=72
(出处: 巴比特论坛)

11

Could I understand tx fee of PPC as following?

The unique character of PPC tx fee is that the tx mustn’t be free and the tx fee is non-zero, which is part of the protocol in Peercoin system. But it doesn’t mean and enforce that the tx fee is fixed, for example, 0.01, the fee is also determined by the market and the peers as the market goes on. The nonzero enforced fee is required because it is used to balance the PoS block inflation.