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Offline bytemaster


We have been on a major kick to eliminate mining from way the network provides security and to maximize profitability; however, we still rely upon mining for one function:  decentralized selection of who gets to produce the next block.  This means that while BTS is not created by mining, miners can still EARN BTS through mining.

To produce a block you must include the minimal number of 'votes' (CoinDaysDestroyed) as proof of stake.   However, network security depends upon how quickly votes can be accumulated on top of every block.   It is in the networks best interest if a large percentage of BTS shares can sign off on every block in an efficient manner. 

We want to pay people for voting with their BTS shares by leaving their wallet 'open' and actively producing blocks.   Further more we want to encourage rapid prioritization of blocks that include as many possible voting transactions using as few bytes as possible. 

Every block generates fees, and these fees must be split between miners and shareholders as dividends.   The network can significantly enhance its security by paying miners who include the most possible votes in the most timely manner.  I am contemplating how to set the mining reward as a percentage of transaction fees and have the following proposal:

MIN_VOTES        = min CDD required to produce a BLOCK
ACTUAL_VOTES  = total CDD by the block
BLOCK_INCOME  = total fees paid by all transactions included in the block.
DIVIDEND_RATE = 50% ?? 
MAX_REWARD    = DIVIDEND_RATE * BLOCK_INCOME

REWARD = MAX_REWARD * (1 - (MIN_VOTES / ACTUAL_VOTES))

The result is that as the number of ACTUAL_VOTES approaches infinity, the percentage of MAX_REWARD actually payable to the miner goes to 100%

So how does one maximize their mining efforts?   By including as much of their own VOTES per block as possible and insuring the REWARD for their block is > than the cost of including their own transaction to up the CDD.   

What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Because mining difficulty and reward are independent of who makes the transaction, everyone has incentive to include as many transactions as possible and no one has incentive to not relay transactions.   Keeping transactions secret and failing to relay will not hurt your competitions mining ability, though it may hurt their profits while increasing the dividends paid to all shareholders.   So selfish nodes benefit the network at the expense of other miners.   No node has any incentive to exclude transactions because the transaction their income depends upon including as many as possible.

Mining is profitable for all, but you can increase your profits by owning more and using it to produce blocks.

 

 

For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline santaclause102

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Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #1 on: March 16, 2014, 10:59:18 PM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

Offline Troglodactyl

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Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #2 on: March 16, 2014, 11:08:34 PM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

It seems like a combination of P2Pool and CoinJoin might be possible if this is a concern.

Offline santaclause102

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Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #3 on: March 16, 2014, 11:15:53 PM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

It seems like a combination of P2Pool and CoinJoin might be possible if this is a concern.

I never mined anything... Is p2pool what it sounds like? A pool in which voting power is completely distributed?

Offline toast

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #4 on: March 16, 2014, 11:23:39 PM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

Yeah isn't this why you didn't like NXT forging?

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Offline bytemaster

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #5 on: March 16, 2014, 11:41:12 PM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

Yeah isn't this why you didn't like NXT forging?

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It is something I didn't like about Nxt.   In fact there is a lot to be said for Nxt... so lets consider our goals and see how well each solution achieves the goals:

1) Minimize waisted Resources (electric bills).. Nxt wins hands down by using deterministic selection of who gets to sign the block.
2) Maximize the percentage of shareholders contributing to security  (TaPOS = 100%, Nxt = 10-20%?).... TaPOS advantage...
3) Maximize the rate at which shareholders contribute to security... the minimum POS per block would require 6 months to have 51% of shareholders 'vote' for the block that included your transaction.   
       Best case a shareholder with 51% would simply move their funds every block and make it irreversible...
       We want to minimize the number of blocks it takes to get a statistically significant voting advantage over an attacker... the minimum rate is .001% of votes get cast per block.... we would like this to be much higher if possible.

4) Distribute control as far and wide as possible
       A large pool is bad for this, but good for #3...  pool size is mitigated by risking your funds to a 3rd party holding them in a 'live wallet'.
5) Maximize the rate at which transactions are included in blocks
6) Prevent Denial of Service by not including transactions or failure to produce blocks.
     - Nxt forgers can exclude transactions from the network.. though they are paid by including them.
   
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline toast

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #6 on: March 16, 2014, 11:43:41 PM »
I just realized this is a natural side effect of having tx fee be per-byte. Carry on.

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Offline maqifrnswa

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Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #7 on: March 17, 2014, 12:11:37 AM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

It seems like a combination of P2Pool and CoinJoin might be possible if this is a concern.

I never mined anything... Is p2pool what it sounds like? A pool in which voting power is completely distributed?

yes, p2pool for BTC has its own separate chain of shares people found that are a part of the p2pool network. When a block is found, the p2pool network includes payouts to the last N number of shares. It is entirely decentralized and trustless. The downside, lately, is that the difficulty to find a share is thousands of times harder than a normal pool, so variance is larger - especially for small miners (<10GH/s).
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Offline santaclause102

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Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #8 on: March 17, 2014, 12:36:09 AM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

It seems like a combination of P2Pool and CoinJoin might be possible if this is a concern.

I never mined anything... Is p2pool what it sounds like? A pool in which voting power is completely distributed?

yes, p2pool for BTC has its own separate chain of shares people found that are a part of the p2pool network. When a block is found, the p2pool network includes payouts to the last N number of shares. It is entirely decentralized and trustless. The downside, lately, is that the difficulty to find a share is thousands of times harder than a normal pool, so variance is larger - especially for small miners (<10GH/s).

Also there is no adavantage to use p2p pools for miners if you assume the centralized pools work / are trustworthy which should not be such a big issue a pool admin could max take 25 btc and run before he is not trusted anymore. So there is no incentive for miners to decentralize mining in POW (AND Tapos?).

Offline phoenix

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Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #9 on: March 17, 2014, 12:54:08 AM »
So, will people start to create customized miners that allow them to maximize the efficiency that they spend their CDD?
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Offline bytemaster

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #10 on: March 17, 2014, 01:32:16 AM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

Pools would not get too large because you have to trust them with your shares.  The payout would be small given the risk.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline bytemaster

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #11 on: March 17, 2014, 01:52:25 AM »
I think that in addition to adjusting the fees earned based upon CDD... that the difficulty of the block should factor in CDD of the miner.

Assuming equal hashing power, someone with 1% of the shares should find a block 1% of the time.   This will combat the problem of outside miners (non-shareholders) being able to control the network. 
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

Offline luckybit

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #12 on: March 17, 2014, 02:26:23 AM »
Quote
What does this mean for mining pools?   It means that they can be very profitable so long as someone is willing to trust the pool with their shares.  A mining pool would be able to cast a large number of ACTUAL VOTES for the least number of bytes (individual transactions).   

Wouldnt this centralize the whole thing again into the handy of the pool adminds?

Pools would not get too large because you have to trust them with your shares.  The payout would be small given the risk.

So if we make it trustless what would stop the pools from getting too large then?
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Offline toast

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #13 on: March 17, 2014, 02:46:44 AM »
If you make it trustless there is no possinle harm from large pools. There are efforts to get all btc miners on p2pool, for example

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Offline bytemaster

Re: You can mine BTS with TaPOS... miners of the world rejoice!
« Reply #14 on: March 17, 2014, 02:56:00 AM »
If you make it trustless there is no possinle harm from large pools. There are efforts to get all btc miners on p2pool, for example

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Trustless is not possible if difficulty is driven by the CDD on a single output... this single output would be in the hands of a single individual.
For the latest updates checkout my blog: http://bytemaster.bitshares.org
Anything said on these forums does not constitute an intent to create a legal obligation or contract between myself and anyone else.   These are merely my opinions and I reserve the right to change them at any time.

 

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