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Can miners exploit a block size increase?

Summary

  • TL;DR As long as there is no network partition, I didn't find a scenario yet where a miner can profit by creating bigger blocks.

    • Note that the model includes latency but not bandwidth.
      • Also, it does not model fees.
    • See also Pieter Wuille's simulator which includes more parameters (such as fees and bandwidth, etc.).
  • Scenarios

    • big vs. small hashrate miners
      • all miners create big blocks: big miner wins
      • only big miner creates big blocks: big miner loses
    • well vs. poorly connected miners
      • miners of big blocks lose
    • there are two groups which are well-connected internally, but are only connected to each other through a poor connection
      • group with more hashrate profits if they create big blocks
      • but individual miners in the big group lose and are incentivised to create their own connection to the other group
    • network not fully connected
      • miners of big blocks can profit

All miners create big blocks

Small miners create small blocks

Well vs. poorly connected miners

Poorly connected create big blocks:

Well connected create big blocks:

Two Groups well connected internally but connected to each other with a single poor connection

Miner 1 opens a new connection to the small group:

One big miner and two partitioned groups