Decred Censorship Computations

This is a response to Is Decred censorship-resistant?, pertaining to the Hybrid Mining Fallacy.

Decred Censorship Cost Analysis: 50% Stakeholder

Analysis of cost factors for a censor with 50% stake (α=0.50) inducing miner self-censorship in Decred via ~50% stakeholder (p≈0.50).

Input Data

1. Stake Share (α): 0.50 (20,480 tickets, T=40,960 ticket pool).
2. Ticket Price: ~211 DCR (stake value ≈ 4,320,256 DCR).
3. Block Subsidy (R_m): ~1.85 DCR (PoW, 30% of ~6.16 DCR total subsidy).
4. Vote Reward (R_v): ~0.74 DCR (PoS, 60% of total subsidy, by 5 votes/block).
5. Current Fees (F_other): ~0.05 DCR/block (~0.0005 DCR/TX, ~100 TXs/block).
6. Base Reward (R_base): R_m + F_other ≈ 1.85 + 0.05 = 1.90 DCR.
7. Veto Probability (p): ~0.50 (α=0.50, ≥3/5 votes).
8. Inclusion Probability (q): 0 to 1 (fraction of blocks with targeted TXs).
9. Miner Margin (m): >0.50 (assumed ~0.6 for Δf_min).
10. Blocks/Hour: 12 (5-minute block time).

Censor’s Cost

• Veto Cost: k=3 votes withheld, cost = k × R_v = 3 × 0.74 = 2.22 DCR/veto.
• Loss Rate: q × p × 2.22 × 12 = 13.31q DCR/hour.
  • q=1: 13.31 DCR/hour (~116,592 DCR/year).
  • q=0 (self-censorship): 0 DCR/hour.
• Annual Cost: q=1: 116,592 ÷ 4,320,256 × 100 ≈ 2.70% APR; q=0: 0% APR.

Miner’s Cost and Fee Requirement

• Orphaning Loss: p=0.50 reduces revenue to (1 - p) × R_base = 0.5 × 1.90 = 0.95 DCR/block.
• Break-Even Fee Delta: (1 - p)(R_base + Δf) ≥ R_base → Δf ≥ R_base = 1.90 DCR.
  • New fees: 0.05 + 1.90 = 1.95 DCR/block.
  • Fee increase: 1.90 ÷ 0.05 × 100 = 3800%.
• Per-TX Impact: ~100 TXs/block, fees rise from 0.0005 to 0.0195 DCR/TX (~3800%).
• Targeted TX Fee: Δf_min = (p × R_base)/(m - p) ≈ (0.5 × 1.90)/(0.6 - 0.5) ≈ 9.5 DCR/TX (m=0.6).

Cost Dynamics

• Censor Advantage: Low cost (0–2.70% APR) enables sustained vetoes, especially if q→0 (self censorship). Censor tolerates ~$1.86M USD/year (DCR=$16).
• Miner Pressure: 50% revenue loss (0.95 DCR/block) pushes self-censorship unless Δf ≥ 1.90 DCR/block (~3800% fee hike, ~$0.31/TX).
• Fee Realism: ~3800% increase or ~9.5 DCR/TX for targeted TXs is impractical, favoring self-censorship.

Streak Misapplication

The Is Decred censorship-resistant? analysis incorrectly applies "any-streak" probability in probRunAtLeastL(N, P, L) to assess a censor's ability to sustain vetoes for L consecutive blocks when miners persistently include targeted transactions (q=1). This calculates the chance of at least one L-length veto streak occurring anywhere in 288 blocks (1 day), overestimating the censor’s success (e.g., ~90.36% for L=6, α=0.50). In reality, censoring a specific transaction requires vetoing consecutive blocks starting from its inclusion, governed by a geometric probability (p^L ≈ 0.50^6 ≈ 1.56% for L=6). This misapplication actually increases the perceived effectiveness of censorship under the assumptions. However, as the above analysis shows, streak analysis is not relevant.

Conclusion

Decred’s censorship resistance is limited against a 50% stake censor (α=0.50). Low cost (0 – 2.70% APR) and infeasible fee increases (~3800%) make self-censorship likely, pushing actual 50% state censor cost toward 0%.