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With Bitcoin, miners are picky about which transactions to add to blocks due to the limited block size, opting for transactions with higher fees (larger transactions). This means micro/nano payments take a long time (if at all) to process on the bitcoin blockchain.

Can this happen on Monero ? Is there anything there to disincentivize mining nano/micro payments? I’m aware that the block size grows and that miners only know the range of the transaction amount but is this enough when monero scales up like bitcoin has?

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Partially.

Miners can't know who send how much to who. What miners do know is the fee associated to the transaction. One way miners can "select" transactions would be to prioritise higher fees, which is actually how a lot of cryptocurrencies work.

What miners can't do is prioritise transactions, on their own, to/from addresses. They would only be able to do so if the transaction maker gave them the tx-id.

With Bitcoin, miners are picky about which transactions to add to blocks due to the limited block size

This won't happen on the long-term with Monero due to the Dynamic Block Size which specifically prevents a Bitcoin situation from occurring.

  • The algorithm on which block size increase is based is designed to maintain a stable growth of around 0.6% in size. There’s a reward penalty for increasing block size too much. This means that miners are still going to try pack the high fee transactions into smaller blocks (relatively smaller) because it equates to a greater reward. If monero gets the kind of transaction traffic bitcoin has than I don’t see how the block size increase would keep up fast enough such that miners don’t get picky about which transactions to pack. Correct me if I’m wrong – Zigglzworth Jan 5 '18 at 15:08
  • Partially correct. It isn't based on stable growth as explained here. But the details don't matter to this question. The point is that it wouldn't happen on the long-term as I stated. There may be a period when this occurs but eventually the demand/offer of block size will balance again. Now this can be a matter of days like it can be a matter of month depending on the spike in traffic. – Maxithi Jan 5 '18 at 16:11
  • According to this : github.com/JollyMort/monero-research/blob/master/… It is based on steady block growth (based on the last 100 blocks). Now if transaction rates spike while the block size expansion remains steady, then theoretically you would get fee picky miners excluding smaller transactions. And so back to my question: apart from block size growth then what further mechanism of prevention from such pickiness does Monero have? – Zigglzworth Jan 5 '18 at 16:51
  • The pickiness is by design. If blocks are full, there will be a backlog of unimportant and normal priority transactions. If senders don't mind waiting, then they won't send with a higher fee. If they send with a higher fee, miners will choose those transactions, the blocksize grows faster, and the people who sent with lower priority fees will have their transactions included in blocks even sooner. – scoobybejesus Jan 5 '18 at 18:02
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    Well, long-term is when things get interesting. The fees, relative to one another, will remain the same. But if the network has enough transactions to maintain a blocksize bigger than the minimum, then fees will decrease. The same amount of fees will be associated with each block, roughly. So a double of the block size means everyone only has to pay half the default fee. If the block size doubles again, the fee will again be half of that. So with increased network usage, all users benefit from a reduction in their fees. – scoobybejesus Jan 5 '18 at 18:43

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