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I'm trying to understand what can happen if

  • A block consists entirely of 3rd party (xCoin) data like Namecoin
  • There are no Tx fees to collect since they are on alternate chains.
  • Assume that the Block reward is quite low (0.25 BTC).

How will mining be profitable?

If the 3rd party data must subsidize mining, what would that subsidy look like within a block?

  • Exchange rate would be 1000 USD per BTC, so 250 USD per block is not bad.. :) – vi.su. Mar 6 '13 at 16:04
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    @vi.su [citation needed] – Nick ODell Mar 6 '13 at 16:24
  • @makerofthings "A block consists entirely of 3rd party (xCoin) data like Namecoin" NameCoin merged mining adds 32 bytes - which is about 1/5 of one transaction. – Nick ODell Mar 6 '13 at 16:29
  • @NickODell Just as Namecoin was invented as an alt chain, what I create one, and then some state does as well. Add a few others and the quantity of bytes increases.... – random65537 Mar 6 '13 at 16:45
  • If a transaction (e.g., xCoin, your example) isn't "paying the freight" it will be cast aside (e.g., take longer to confirm.) If system-wide fees are lower, mining capacity drops to match. That's not a problem unless 51% is a real concern, and that's not a real concern now. – Stephen Gornick Mar 6 '13 at 18:07
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Whoever discovers the block can choose what information to put into it. Therefore a miner that finds a hash that has a sufficient level of difficulty can choose to only include transactions that actually pay their transaction fee.

  • Could they also include arbitrary data as well? – random65537 Mar 6 '13 at 18:06
  • I am not quite sure, the bitcoin wiki doesn't seem to know. You seemed to have believed that you can, what lead you to believe that? – placeybordeaux Mar 6 '13 at 21:24

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