The Bitcoin network, and Bitcoin’s themselves, only have value if they are useful. Therefore, if something is useful it is valuable, if something is useless it is worthless, which raises the question: Why would a Bitcoin miner direct hashrate & operational running costs towards a network in order to mine empty blocks when Bitcoin only has a value if it is useful?
If a Bitcoin miner is competing to find the SHA256 hash of a Bitcoin block, but is not building a block for the purpose of processing transactions, the miner is of no use to Bitcoin & is therefore of no value to its network. In other words an empty block miner is a parasite to the Bitcoin network because they are preventing transactions from being processed & confirmed within a block. This has a similar metaphorical effect to a dam blocking the flow of a river. The water backs up & generates pressure against the dam wall, which will eventually burst and wreak havoc downstream. In the case of Bitcoin it could potentially, in a worst case scenario, create a build up of transactional data within the memory pool that was so large that no Bitcoin miner would have the capacity to process it, eventually rendering the network incapacitated & useless.
So, why would a miner mine empty blocks if doing so would render the network useless & therefore the value of Bitcoin worthless?
The reason is that of an ‘economic anomaly’ where the miner incorrectly, & mistakenly, values an alternative medium of exchange over Bitcoin. Economic anomalies occur when money doesn’t function properly. An example of an economic anomaly is artwork being purchased then stashed away in storage containers rather than being hung on a wall, exhibited & displayed. It makes no sense for artwork to be created yet hidden away since it has no useful purpose other than to be viewed & admired (artwork has no utility). An economic anomaly has occurred if art is only being used as an economic tool. Since artwork is unique & therefore non-fungible, if its value is measured against a medium of exchange that is inflated, or continually counterfeited, it means that the economic value of the artwork would appear to increase when in fact it’s the medium of exchange used to measure its value that has decreased.
The only reason a Bitcoin miner would mine empty blocks is if the miner valued fiat currency over the utility asset value of Bitcoin. This means that the miner is almost certainly of the opinion that Bitcoin is an economically worthless Ponzi scheme and has little to no understanding of its true economic/utility value. The only other reason would be if the miner could print fiat currency themselves & therefore viewed Bitcoin as a threat to their economic power & ability to enrich themselves at the expense of all others.
What would stop a Bitcoin miner from mining empty blocks?
The first thing that would stop a Bitcoin miner from mining empty blocks is lack of a block reward. The Bitcoin block reward continues to get cut in half after every 210,000 blocks have been produced. Each block takes, on average, 10 minutes to be created and so 210,000 blocks is approximately every four years. This means the block reward will likely be zero in the year 2140.
Secondly, a miner with more hashrate that valued & understood the true utility value of Bitcoin over fiat currency could direct more hashrate on to the network to find an empty block faster, preventing the nefarious “empty block miner” from doing so by out competing them, therefore blocking the nefarious miner from winning the block reward & economically forcing the bad actor to leave the chain.
Thirdly, the “empty block miner” could change their economic view of Bitcoin & start contributing to the value of the network by building blocks & processing transactions. This change of view could come about by recognising the economic/utility value of the Bitcoin network as the data & transactional volumes on the network start to increase significantly.
Fourth, the Bitcoin block fee could surpass the Bitcoin block reward & therefore could economically incentivise the miner to be more efficient with their hash power by attempting to build larger blocks & capitalise on winning both the block reward & the block fee at the same time. This fourth scenario is economically far more likely, but there will be a period of time where this incentive does not exist meaning that the Bitcoin network will be vulnerable to empty block mining attacks for a limited time. It will require a miner with more hash power & incentive to deter this empty block miner by economically pushing them off the chain as explained previously in the second scenario.
Fifth, the implied contract of the Bitcoin white paper and the downloading of its software could be enforced lawfully by the rightful owner of the software, which is why the Crypto Open Patent Alliance (COPA) court case involving Dr Craig Wright as the rightful owner to the copyright of the Bitcoin White Paper & the Bitcoin data base is so critical. However, it is also important to bear in mind that if the entire cryptocurrency market were to turn on the actions of what one individual did or said it would make a mockery of the entire blockchain industry & shake confidence to the core. This is why any decision must be decided upon by a court of law. The empty block miner could then potentially be contractually enforced to build blocks & process transactions or be sued for breach of contract.
Sixth, the “empty block miner” could be reminded of the contraction they face. If every mining operation mined empty blocks the network would not be able to process any transactions and would therefore be useless, rendering all the investment put into their mining operations economically, utterly worthless, as the value of Bitcoin would be precisely $zero.
Seven, the market price of Bitcoin (BSV) increases significantly due to an obvious increase in utility. This would provide extra economic resources to enable the expansion of the mining operation and the incentive to capitalise on the increased block fee, therefore making the building of blocks & the processing of transactions economically more efficient & worthwhile.
Conclusion: The erroneous economics of empty block mining is the result of an economic anomaly of the current financial system using an economically worthless medium of exchange (classified as securities fraud: SEC vs W.J. Howey Co 1946), and as a result of growing pains due to the economic incentive of the Bitcoin network changing over time & miners having to make a decision to either continue with further investment of their mining operation, merge to create larger operations, or quit altogether.
It would appear that the purpose of Gorilla pool (BSV mining operation) is to act as the miner that could clear a large volume of data build up in the Bitcoin memory pool should a scenario develop where other mining operations are economically unwilling to create a large block to clear it. It looks like Bitcoin (BSV) is in strong hands with plenty of muscle.
