So here's the idea:
What if every byte, or "vbyte," on a block could be tokenized? This means that people could buy and sell these tokens on an integrated exchange right in the bitcoin client.
Miners would have to sell these tokens in the marketplace, and they’d need to respect these tokens on their blockchain if they want to get paid.
For anyone wanting to send bitcoin transactions, they'd first need to grab these tokens from the marketplace. This could be set up to happen automatically with market orders.
Imagine having an order book along with some cool charts so everyone can see how much a transaction will cost.
There’s a couple of changes needed for the bitcoin software:
1. An estimate of total transaction costs.
2. The estimated price for a "vbyte."
So here’s how it could work:
The bitcoin network would have a limited number of tokens available, floating in something similar to a mempool, but let’s call it a "token pool."
For instance, you could set a 60-minute window for tokenization. With a block size of 10 megabytes every 10 minutes, that could give us roughly 60 million tokens.
Miners would get to choose how many tokens they want to sell and at what price.
Each token would have a unique identifier, ranging from 1 to 10 million or up to 60 million.
Each of these tokens would have an attached value that reflects the price paid for it.
This value represents the amount of BTC that will be awarded once the token is mined.
To actually mine the token, a block in the blockchain has to validate it.
The system checks if the token's number on the blockchain matches the token that was bought or sold, and so on.
Everything here is virtual, kind of like in memory, so there’s no real trace.
You forgot a very important part, of what benefit will this be to the Bitcoin network? Your suggestion overcomplicates a very simple system as many crypto projects tend to do.
There are also so many flaws in this, starting with the idea of each miner selling vbytes on their candidate block, only one miner gets to actually confirm a block each ~10 minutes, the other miners do not have anything to sell, and users already pay for the space, hence the phrase; sats/vbyte. That's all the tokenization we need.
1. What this solves/changes somewhat is:
It shows how the market for transaction costs is. Currently this is hidden from the bitcoin software and the user has no idea what to put into the transaction fee, so this seemse to be a serious short coming in bitcoin, it always was.
I send 1/100.000.000 of a bitcoin in the past and it charged me 0.0005 transaction costs, in 2011 or something. I might be the only one to ever have send 0.00000001 bitcoin over the internet to test micro transactions !
Back then it wasn't even possible to set the transaction fee, possible a hidden "feature" of bitcoin, anyway back to the topic and a somewhat worked out example:
2. Market place in action:
MinerA "sells" 10 million tokens for block X (not really sold, just an offer to sell).
MinerB "sells" 10 million tokens for block X could be at price-1 for miner A, price doesn't really matter in this example.
MinerC "sells" 10 million tokens for block X at varies price points.
Now they all race to solve the block.
Only the miner that wins gets to actually "sell" the tokens. Let's say it's MinerA, MinerA gets the btc of all the tokens.
MinerB gets nothing.
MinerC gets nothing.
All tokens are now return to the system.
Not that difficult really.
It's basically an order book, where the same item is being sold multiple times, but only the winner of the mining block actually gets to keep the BTC as it's recorded on the block itself.
Concerning the tokens, quite simple to implement, just another mempool.
Only reason of concern is if each individual token would be sold, which seems interesting, 10.000.000 packets per 10 minutes.
10.000 packets per minute.
166 packets per second.
Asumming 100 bytes per packet would be: 16600 bytes per second. Peanuts for todays network, though some of that will have to be copied to other systems.
So I do think this idea is feasible among miners/bitcoin clients that want this functionality.
Coolest of all it could be optional: either opt in to receiving market data or go blind.
When blind... it will be as if an order was placed anyway...
This is definetly doable !
I don't have time to work it all out, this posting is just as an inspiration for other folks to work this out further, I am pretty sure this will eventually come.
What it also allows is:
3. Assurance that a transaction can be deposited on a block, or at least better assurance, especially if all miners bought from, assuming there is no hidden miner.
It's basically like selling futures/options/etc, but with some twists modified for blockchain/mining.
And finally the biggest problem it solves:
4. A fair transaction cost price for users.
Last time I observed transaction costs, they were all over the place, seems like people don't know what they are doing.
I ask some people if they know what a bit or byte is, or what a kilobyte is, none of them really knew...
So the current bitcoin transaction cost system is alien to many people.
At least with an automated market exchange system people can buy transaction space against a "market order", whatever the current transaction price is according to the order book.
If decided to be too complex, an alternative to creating more fair transaction costs would be:
Some kind of moving average and some kind of minimum/maximum values, especially a maximum value if it's exceeded by the user then the excess is depositted back to the user.
Like going to the bakery and handing 500 dollar for "system transaction costs", while it only costs 15 cents, bakery should not keep 499.85 cents, that be ridicilous...
We already have fee that does exactly this. People are competing in the "fee market" and are "buying" the "bytes" inside each block by paying a fee in each of their transactions. It is all happening in a perfectly natural way (if we ignore the spam attacks), there is no need for another market that smells like centralization that could also inflate the fees as market manipulators can easily "pump and dump" the said "token"!
You still are over complicating a simple process.
Bitcoin does not need another mempool, and you're creating problems out of thin air which you expect this to solve, but it will rather create more problems.
I highly doubt Bitcoin will ever be associated with 'tokens.'
1. Average people usually just use fee suggestion shown by wallet software they use.
2. Advance user can use website such as https://jochen-hoenicke.de/queue/ to get idea how much fee rate they should use.
3. Even in early days, there are some software which let you decide TX fee.
This could be interesting not as a replacement for the existing mechanism, but as an addition to it. However, participation in the token market should not be mandatory.
Here's how I see it. If a miner wants to attract additional funding, they sell space in future blocks. There could be demand for this. For example, if I know I'm planning transactions on May 1st, I might be interested in buying space in a block today at current prices, assuming it will be mined on May 1st. It's like buying a futures contract for inclusion in a block.
These futures contracts don't necessarily have to be bought and sold with bitcoins. If a miner needs funding in dollars, and I need to fix the fee size in dollars, we can make a deal in dollars.
The first block mined by the miner on the expiration day of such futures contracts must necessarily include transactions created by the holders of the futures contracts.
If on the expiration day the miner does not mine any blocks, they are obliged to return the money to the holders of the futures contracts with a small premium.
If a futures contract holder does not sign a transaction before the start of the day when the futures contract expires, the right to a place in the block is lost. However, a holder who changes their mind can sell it on the open market.
In my opinion, it would be pretty cool.
As additional form of income, many pool already offer their service though. For example, paid acceleration service and including non-standard TX (such as Mara Slipstream and Luxor OrdinalHub which let you create Ordinal TX with size more than 100 vKB).
You're mistaken. Firstly, most Bitcoin software consistently presents the recommended transaction fee unless it's offline without internet access. But, let's set that aside. There's no fixed "vbyte cost". When the mempool is empty, vbytes hold no value. They only become valuable if the total unconfirmed transactions exceed the candidate block's storage capacity. Even then, it fluctuates depending on competition.
Bitcoin is free market money. Free market decides EVERYTHING.