Some miners on OCEAN have started making use of the Coin Age Priority algorithm during block template construction using DATUM. Originally, Bitcoin Core initially selected transactions to include in blocks based on what they had seen first in their mempool. This logic was gradually replaced by prioritizing older coins, i.e. which had been unused longer than other coins. This was ultimately only applied to a small portion of the block space, and then eventually removed entirely around the time of Segwit. It is still maintained in Bitcoin Knots.
I can only speculate on the motives of the miners doing this, but given OCEAN’s rhetoric, I’d guess it has something to do with prioritizing “financial” transactions over others. Even if not, even if it’s purely to help small valuable UTXO owners, it’s still just as irrational.
You can partition blockspace as miners as you like, and prioritize the ordering of transactions as you wish within those partitions, but that doesn’t change the fact that blockspace is a tradable good valued on an open market. If criteria other than the fee are used to determine which transactions to include, you will be leaving money on the table. The only situation where that wouldn’t be true is one where those criteria were 1:1 identical to decisions based on feerate, which would be a meaningless criterion.
Creating a subsection of blockspace that is selected by other criteria ultimately accomplishes two things: 1) leaving money on the table as a miner, since any meaningful non-feerate criteria by definition results in less fees being charged, and 2) creates a bucket of blockspace submitted to competitive “fee pressure” according to the various criteria applied, without any of that pressure creating direct revenue increases for miners using these new criteria.
The new subsection of blockspace does not ultimately reduce fee pressure, it simply leaves them making less money, and users benefit from these new transaction selection criteria exposed to various competitive pressures miners do not directly benefit from.
You cannot hide from the reality that blockspace is a tradable good price on the open market. You can accept it or you can lose money. The only alternative is to try in vain to censor classes of transactions you don’t like, and if you happen to succeed, you destroy a core property of Bitcoin in the process.
Mining remains decentralized, widely distributed with many small operators, is essential to Bitcoin’s censorship resistance. It’s a shame to see signs like this that such smaller miners are financially irrational, as it has huge implications for their long-term success.
This article is one Take. Opinions expressed are solely those of the author and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.