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A new answer on Who gets Bitcoin transaction fees? has spawned discussion on the paradigm shift from selection by priority (= coin age × spent value) to selection by fee rate `(= fee / transaction size).
It's clear that Bitcoin Core v0.12.0 has turned selection by priority off by default, but I am wondering whether it follows that all miners have discontinued using it.
Is it known whether any miners are still selecting the transactions to go into their blocks using selection by priority?
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Generally, no miners still use the priority system for selecting transactions. You can easily test this by spending a very old UTXO (e.g. 1 BTC that has remained unspent for several years) and paying no transaction fee. If miners still are using priority, your transaction should be confirmed relatively quickly (hint: it won't be). Otherwise, your transaction will not confirm for several weeks.
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The answer of this question depends on the setup of the miner who succeeded to solve the block. In general the priority still matters most; only the spare additional resources up to the maximum block size include transactions not paying the recommended amount of network fee(s).
As a miner you can even setup a minimum (or maximum) transaction fee amount needed to get your transaction included into a new block:
At all times, Bitcoin Core will cap fees at
-maxtxfee=<x>(default: 0.10) BTC. Furthermore, Bitcoin Core will never create transactions smaller than the current minimum relay fee. Finally, a user can set the minimum fee rate for all transactions with-mintxfee=<i>, which defaults to 1000 satoshis per kB.
1Hey Flo, thanks for your answer. I'm curios how you arrived at the conclusion that "In general the priority still matters most" and whether you could perhaps provide more evidence for that. I think this is the part of your answer that most directly addresses my question. – I'm surprised by your statement because I've provided evidence that "selection by priority" has been deprecated as recommended selection mode for some time. I'm not sure how min and max fee are supposed to be related to my question. – Murch – 2017-02-10T18:01:41.620
Hi Murch, you have linked to the release notes of bitcoin core v0.12.0: Bitcoin Core has a heuristic ‘priority’ based on coin value and age. This calculation is used for relaying of transactions which DO NOT pay the minimum relay fee, and can be used as an alternative way of sorting transactions for mined blocks... – Flo – 2017-02-12T00:05:47.037
... looking at https://en.bitcoin.it/wiki/Transaction_fees#Priority_transactions you can set priority on your transactions increasing the transaction fee. https://anduck.net/bitcoin/fees/ shows that there are blocks which have been (almost) completely filled up with transactions paying more than 1$ per kB which means vice versa that the transaction fee matters on setting a priority for payment; at least if the number of transactions is larger than the current blocksize limit of 1MB.
Keep in mind mining BTC is a professional business, now. At least the large players for sure take care to make the most profit as possible of every new block mined. – Flo – 2017-02-12T00:27:28.193
It seems to me that there is a misunderstanding of what "priority" is here. It's a term used to describe confirmation age × spent value. Priority was replaced by fee rate as the main selection metric. That's exactly what this question is about. – Murch – 2017-02-20T00:17:35.740
1is it even possible to know for certain? Small time miners can have ridiculous transaction selection algorithms and it'd still be valid by consensus rules. – renlord – 2016-12-14T04:15:22.757
1Of course any selection is valid. However, one could tell by analyzing whether more profitable transactions were available at the time of the block while the block contains less profitable transactions with a higher priority. – Murch – 2016-12-14T15:21:42.350
Nobody ever really proved that turning it on mattered in the first place. – SDsolar – 2017-01-31T06:40:44.163