This is how BTC's Lightning Network is supposed to work - please learn from their mistake

This is how BTC's Lightning Network is supposed to work - please learn from their mistake

It's unfortunate that the Bitcoin community/development is seen as ludist, while there are important innovations being done constantly

I mean, to be fair, I'm the one here in an Ethereum subreddit arguing that Lightning/Segwit are actually genuine innovations that people should stop hating on. But once political considerations become such a strong force in a technical community, it can only cause further deviation from a pure "adopt the best tech for the task" approach, and even on an interpersonal level I've witnessed many in the Bitcoin community become opposed to even understanding various types of technological consideration if it's not something Bitcoin already does. So I can't say the accusation is entirely unfair. The Bitcoin community is certainly more ludist than the Ethereum community.

I fail to see how the reduction of the block reward can increase the number of orphans.

I'm very familiar with that paper, and it does a great job of showing how much more secure Ethereum is per unit of time compared with Bitcoin. But it doesn't attempt to model the miner decision process that determines the block size distribution in the first place (or rather, in Ethereum, the gas total distributions). It just treats that distribution as a static thing measured empirically at one point in time. It also doesn't attempt to model dynamic gas limits, which are themselves a function of miner decisions on which way to vote. One practical consideration for many miners in determining their private tx inclusion algorithm is the balance between the overall uncle risk and the rewards to be made from collecting fees under a certain inclusion algorithm. Reducing the block reward can impact this analysis because:

a) Roughly speaking a given amount of gas included by a miner increases their uncle risk proportionately in the direction of time, while the total cost of being uncled remains roughly proportional to the block reward (assuming that the reward dwarfs the total amount of fees being collected).

b)This tends to reliably constrain the minimum gas price accepted in terms of ETH regardless of market value (an increase in which would otherwise drive fees down, given the reduced willingness of users to pay higher fees in real terms, and the increased protection provided against tx flooding by higher ETH costs). When average tx gas volume per block is lower than the gas limit, this effect has been quite dominant historically. Although different miners clearly use different inclusion criteria, I strongly suspect (and someone can probably even find announcements somewhere) that various miners and pools changed their tx acceptance parameters following the reduction in block rewards.

c) The effect on the distribution is not limited to the low congestion equilibrium. As average gas volume starts to exceed the gas limit, gas prices can leave the lower equilibrium and start to instead be dominated by transaction inclusion demand, increasing the reward for including more gas while the block reward cost of being uncled remains constant. In other words, miners will become more willing to risk uncles in order to capture fees. They also become more willing to vote up the gas limit. The exact equilibria here are surprisingly complex and depend, for example, on various real world factors related to the fee distribution. Miners are probably also using different weights of the long-term expected benefit of Ethereum throughput levels, effects on user experience of different fee policies, expected rewards from the emergence of a strong fee market, monopsonistic effects from highly inelastic exchange withdrawal fee policies, etc. etc. etc. But block rewards are definitely a part of the equation, even if it's hard to say how big.

Lots of the above is conjecture on my part, and I would happily defer to someone who can speak more precisely to the various uncle rate effects. I know it's something /u/vbuterin has thought about quite a bit. But TL;DR: Yes, there is reason to believe that block reward reduction has some kind of effect on uncle rates. So does market price. So does exchange fee policy. There are lots of things going on besides people just pressing miners to vote the gas limit up.

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