Subnostr

It is true that a 51% attacker can steal from the drivechain escrow. Of course, your funds will only be at risk if you put them on a drivechain, the 51% attacker would have to rewrite history to steal mainchain funds.

I don't think it follows that this increases centralization pressure on miners.

Here's how I think about it: If an entity manages to get 51% of the hashrate they can orphan blocks and win all block rewards from then on, censor transaction, increase transaction fees arbitrarily etc. Bitcoin just doesn't work if any entity controls 51% hashrate for long. Whether it's hashrate escrow funds or all future block rewards the prize for a 51% attacker would quickly become worthless since the value of Bitcoin would fall when people realized that mining was controlled by one entity.

So there's really no rational pressure for miners to centralize (as it would ruin Bitcoin's value prop). Each miner wants more hashrate but also wants Bitcoin to remain decentralized (so that the block rewards they earn continye to have value).

j 2y ago

What we really need to worry about is not the miners centralizing and attacking us (their incentives are aligned with Bitcoin) its the state using mining to attack Bitcoin at a loss. They would actually want Bitcoin's value to go to zero!

The best defense is lots of revenue for honest miners. Drivechains is designed to give miners more revenue.

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Discussion

jimbocoin 🃏 2y ago

> Drivechains is designed to give miners more revenue.

I’ve heard Sztorc make this claim. But the mechanism is unclear to me.

As I understand it, miner revenue can come from three possible sources: block subsidy, fees, and direct payments.

The block subsidy schedule is immutable, ruling that out. So does this alleged increase in miner income arise from increased on-chain fees? Or via direct payments?

j 2y ago

Merge mining fee revenue

j 2y ago

so, fees

jimbocoin 🃏 2y ago

Do you mean sidechain fees (via merged mining) or mainchain fees or both?

j 2y ago

side chains fees are aggregated and paid to mainchain miners as mainchain bitcoin in a single merge mining transaction

jimbocoin 🃏 2y ago

Makes sense. It sounds like the merge mining revenue comes out of the escrowed funds then.

The degree to which this constitutes “additional” revenue would be a function of how it compares to the mainchain revenue lost in reduced fee pressure, I would imagine.

j 2y ago

Very good point. Of course there's some things, like zero knowledge proofs, that are not possible on the mainchain and so any fees earned for those use cases are strictly a win for miners.