BIP68: Second-level granularity doesn't make sense

BIP68 currently represents by-height locks as a simple 16-bit integer of the number of blocks - effectively giving a granularity of 600 seconds on average - but for for by-time locks the representation is a 25-bit integer with granularity of 1 second. However this granularity doesn't make sense with BIP113, median time-past as endpoint for lock-time calcualtions, and poses potential problems for future upgrades.

There's two cases to consider here:

1) No competing transactions

By this we mean that the nSequence field is being used simply to delay when an output can be spent; there aren't competing transactions trying to spend that output and thus we're not concerned about one transaction getting mined before another "out of order". For instance, an 2-factor escrow service like GreenAddress could use nSequence with CHECKSEQUENCEVERIFY (CSV) to guarantee that users will eventually get their funds back after some timeout.

In this use-case exact miner behavior is irrelevant. Equally given the large tolerances allowed on block times, as well as the poisson distribution of blocks generated, granularity below an hour or two doesn't have much practical significance.

2) Competing transactions

Here we are relying on miners prefering lower sequence numbers. For instance a bidirectional payment channel can decrement nSequence for each change of direction; BIP68 suggests such a decrement might happen in increments of one day.

BIP113 makes lock-time calculations use the median time-past as the threshold for by-time locks. The median time past is calculated by taking median time of the 11 previous blocks, which means when a miner creates a block they have absolutely no control over what the median time-past is; it's purely a function of the block tip they're building upon.

This means that granularity below a block interval will, on average, have absolutely no effect at all on what transaction the miner includes even in the hypothetical case. In practice of course, users will want to use significantly larger than 1 block interval granularity in protocols.

The downside of BIP68 as written is users of by-height locktimes have 14 bits unused in nSequence, but by-time locktimes have just 5 bits unused. This presents an awkward situation if we add new meanings to nSequence if we ever need more than 5 bits. Yet as shown above, the extra granularity doesn't have a practical benefit.

Recommendation: Change BIP68 to make by-time locks have the same number of bits as by-height locks, and multiply the by-time lock field by the block interval.

On Tue, Nov 24, 2015 at 4:36 AM, Peter Todd via bitcoin-dev < bitcoin-dev@lists•linuxfoundation•org> wrote:

> The downside of BIP68 as written is users of by-height locktimes have 14
> bits unused in nSequence, but by-time locktimes have just 5 bits unused.
> This presents an awkward situation if we add new meanings to nSequence
> if we ever need more than 5 bits. Yet as shown above, the extra
> granularity doesn't have a practical benefit.
>
>
> Recommendation: Change BIP68 to make by-time locks have the same number
> of bits as by-height locks, and multiply the by-time lock field by the
> block interval.
>

I think you might be referring to the old specification. I believe this was brought up before and the specification was changed so the same number of bits were used for by-time and by-height. Please see https://github.com/bitcoin/bips/pull/245

However, I am glad you came to the came conclusions independently because "re-invention" often confirms good ideas :)

On Tue, Nov 24, 2015 at 05:05:32AM +0000, Btc Drak wrote:

> On Tue, Nov 24, 2015 at 4:36 AM, Peter Todd via bitcoin-dev <
> bitcoin-dev@lists•linuxfoundation•org> wrote:
>
> > The downside of BIP68 as written is users of by-height locktimes have 14
> > bits unused in nSequence, but by-time locktimes have just 5 bits unused.
> > This presents an awkward situation if we add new meanings to nSequence
> > if we ever need more than 5 bits. Yet as shown above, the extra
> > granularity doesn't have a practical benefit.
> >
> >
> > Recommendation: Change BIP68 to make by-time locks have the same number
> > of bits as by-height locks, and multiply the by-time lock field by the
> > block interval.
> >
>
> I think you might be referring to the old specification. I believe this was
> brought up before and the specification was changed so the same number of
> bits were used for by-time and by-height. Please see
> https://github.com/bitcoin/bips/pull/245
>
> However, I am glad you came to the came conclusions independently because
> "re-invention" often confirms good ideas :)

Ha, that's awesome! Looks like we're pretty much on the same page re: granularity.