As some miners at OCEAN have begun utilizing the Coin Age Priority algorithm in block template construction using DATUM, it raises questions about the motives behind this decision. Originally, Bitcoin Core prioritized transactions based on their time in the mempool, but this logic was replaced by favoring older coins that had been unspent for longer. This approach was eventually phased out around the time of Segwit, although it is still maintained in Bitcoin Knots.
The rationale behind the miners’ use of this algorithm is not entirely clear, but it may align with OCEAN’s focus on prioritizing “financial” transactions or potentially benefiting small value UTXO owners. However, regardless of the intentions, this strategy is ultimately irrational.
While miners have the freedom to partition blockspace and order transactions as they see fit, the fundamental fact remains that blockspace is a fungible commodity valued on an open market. Any criteria other than feerate used to select transactions will result in missed opportunities for revenue. Creating a separate section of blockspace based on different criteria only serves to limit miners’ earnings and subject users to varying competitive pressures that do not directly benefit the miners.
It is essential to acknowledge that blockspace operates within a market framework and attempting to deviate from this reality will lead to financial losses. Maintaining a decentralized and widely distributed mining landscape with many small operators is crucial for ensuring Bitcoin’s censorship resistance. Therefore, it is concerning to see signs of economic irrationality among smaller miners, as this could have significant implications for their long-term success.
In conclusion, it is imperative for miners to align their strategies with the principles of the open market to maximize their earnings and support the overall health and resilience of the Bitcoin network. The decisions made by individual miners can have far-reaching consequences, and it is essential to prioritize rational economic behavior for the benefit of the entire ecosystem.
This article is a Take. Opinions expressed are entirely the author’s and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.