A miner-set reserve refers to a minimum acceptable transaction fee or a threshold value that a miner autonomously establishes for including transactions in a block. Transactions offering fees below this reserve are disregarded by that specific miner, regardless of network congestion. This mechanism allows miners to express a preference for higher-value transactions. It influences the effective transaction fee market dynamics by creating a floor for inclusion.
Context
In proof-of-work blockchains, the concept of a miner-set reserve significantly impacts transaction processing and the overall fee market. While it grants miners discretion, it can also lead to transaction censorship or an inefficient allocation of block space if reserves are set excessively high. Debates often address the balance between miner autonomy and the network’s need for predictable transaction inclusion. The transition to proof-of-stake in some networks reduces the direct influence of such miner-specific strategies on block production.
The Cryptographic Second-Price Auction (C2PA) overcomes TFM impossibility by encrypting user bids, eliminating miner off-chain influence and achieving strategic simplicity.
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