Bitcoin Miner Transaction Fee Collection Efficiency Analysis

Executive Summary

This report examines a newly proposed mining pool expected to implement transaction censorship policies, potentially causing detectable deviations from typical profit-maximizing transaction selection strategies. Using Bitcoin Core's getblocktemplate command without actual hashing, we generated candidate Bitcoin blocks every 20 seconds over 15 days, comparing results across Bitcoin Core versions and real-world miner performance.

Key Findings:

• Modern Bitcoin Core (2020) shows 40.3% higher fee income than 2015 versions
• Local simulations outperformed real miners by 0.15% in hypothetical fee collection
• Significant variance exists between mining pools, with F2Pool showing superior performance
• Proposed censorship pools may fundamentally alter Bitcoin's economic incentives

Methodology Overview

Block Template Generation Process

Bitcoin miners construct candidate blocks by:

1. Gathering transactions from mempool
2. Optimizing for maximum fees within block weight limits
3. Adding proof-of-work via hashing

We replicated this process using:

getblocktemplate

with these technical specifications:

Data Collection Period: January 3-18, 2021

Version Comparison: Bitcoin Core Evolution

Fee Collection Improvements

• 2020 version (0.20.0): 0.777 BTC/block avg
• 2015 version (0.10.3): 0.554 BTC/block avg

• +40.3% increase attributed to:

  • SegWit implementation
  • Opt-in RBF (Replace-by-Fee)
  • CPFP (Child-Pays-For-Parent)

👉 See how Bitcoin transaction efficiency impacts mining profitability

Real-World Network Benchmarking

Miner Performance Variations

Key Observations:

• 10-second timestamp advantage for real miners didn't translate to superior performance
• Empty blocks (potentially from SPV mining) contributed to real-world underperformance
• Local blocks maintained consistent fee advantage throughout testing period

Emerging Threat: Miner Censorship

Case Study: DMG Blockchain Initiative

• Announced October 2020 censorship-focused pool
• Partnered with Marathon Patent Group (January 2021)
• Proposed blacklisting "non-compliant" transactions

Potential Implications:

1. Initial blacklists targeting economically insignificant UTXOs
2. Gradual expansion to whitelist systems
3. Possible chain splits from non-standard blocks

"Censorship resistance is the result of transaction fees... The state must consume taxes no less than the fee premium to sustain censorship."

— Eric Voskuil

👉 Understand how transaction fees shape Bitcoin's censorship resistance

Frequently Asked Questions

How accurate are these simulations?

Our local blocks matched real miner performance within 0.15%, validating the methodology's accuracy despite the 10-second latency disadvantage.

Why does Bitcoin Core 2020 outperform older versions?

SegWit's block space optimization and improved transaction selection algorithms account for most of the 40.3% improvement.

Could censorship pools significantly impact Bitcoin?

Early-stage blacklisting may have minimal economic impact, but systematic censorship could:

• Alter Bitcoin's value proposition
• Create ideological divides within the community
• Potentially lead to chain splits

Conclusion

This analysis establishes baseline metrics for:

• Miner transaction selection efficiency
• Protocol improvements' economic impact
• Censorship policies' potential consequences

Ongoing monitoring will be crucial as:

• New mining pools (Foundry, DMG) enter the ecosystem
• Regulatory pressures increase
• The community debates Bitcoin's fundamental properties

The network's censorship resistance may increasingly depend on transaction fee premiums rather than systemic design—a development requiring careful evaluation by all stakeholders.