You can mine BTS with TaPOS... miners of the world rejoice!

[gulu]

What's the motivation for mining? Since no more extra BTXs will be generated to dilute my positions, I will simply off-storage my BTXs and move them once every year, paying one-time tx fee. To be frank, the mining rewards are not that significant, especially when tx fees are split half between mining rewards and dividends. The amount of BTXs that will be engaged in mining is proportional to the significance of tx fee. Therefore the dividend setup will reduce the number of miners by half. After all, mining with BTXs takes extra risk, extra time and extra efforts. I think I personally will chose not to mine but pay the tx fee once every year.


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[toast]

any transaction

[luckybit]

Perhaps something with multi-signature addresses.   If you require 2 signatures to spend a balance, but just 1 to mine with it then you may have additional security.

If the pool operator's signature is required to spend your balance, doesn't that mean you can't get your balance back if the pool operator disappears?

If you're considering this idea, I'm pretty sure you'll wind up exactly where I suggested -- having a way to sign over the authority to mine with your balance, but not to spend it.

Exactly, if you use multisig for this, people can have full control of their own wallets, but send a copy of one key to the pool operator to mine for them.  It's possible most people wouldn't care who mined for them, and would thus make their "mining key" basically public, potentially undermining POS.

If mining income could be directed to an address other than the mining address, that would force people to care who mined for them, but then it seems like you might as well just allow full multiple input multiple output mining transactions.

Here is how I view things... once a year you need to bring your wallet on line if you want to avoid a 5% inactivity fee.  If you 'mine a block' while you are online anyway then you still contribute to the security of the network even if your keys are not 'online' all of the time.

What counts as activity?

[bytemaster]

Perhaps something with multi-signature addresses.   If you require 2 signatures to spend a balance, but just 1 to mine with it then you may have additional security.

If the pool operator's signature is required to spend your balance, doesn't that mean you can't get your balance back if the pool operator disappears?

If you're considering this idea, I'm pretty sure you'll wind up exactly where I suggested -- having a way to sign over the authority to mine with your balance, but not to spend it.

Exactly, if you use multisig for this, people can have full control of their own wallets, but send a copy of one key to the pool operator to mine for them.  It's possible most people wouldn't care who mined for them, and would thus make their "mining key" basically public, potentially undermining POS.

If mining income could be directed to an address other than the mining address, that would force people to care who mined for them, but then it seems like you might as well just allow full multiple input multiple output mining transactions.

Here is how I view things... once a year you need to bring your wallet on line if you want to avoid a 5% inactivity fee.  If you 'mine a block' while you are online anyway then you still contribute to the security of the network even if your keys are not 'online' all of the time.   

[Troglodactyl]

Perhaps something with multi-signature addresses.   If you require 2 signatures to spend a balance, but just 1 to mine with it then you may have additional security.

If the pool operator's signature is required to spend your balance, doesn't that mean you can't get your balance back if the pool operator disappears?

If you're considering this idea, I'm pretty sure you'll wind up exactly where I suggested -- having a way to sign over the authority to mine with your balance, but not to spend it.

Exactly, if you use multisig for this, people can have full control of their own wallets, but send a copy of one key to the pool operator to mine for them.  It's possible most people wouldn't care who mined for them, and would thus make their "mining key" basically public, potentially undermining POS.

If mining income could be directed to an address other than the mining address, that would force people to care who mined for them, but then it seems like you might as well just allow full multiple input multiple output mining transactions.

[theoretical]

Perhaps something with multi-signature addresses.   If you require 2 signatures to spend a balance, but just 1 to mine with it then you may have additional security.

If the pool operator's signature is required to spend your balance, doesn't that mean you can't get your balance back if the pool operator disappears?

If you're considering this idea, I'm pretty sure you'll wind up exactly where I suggested -- having a way to sign over the authority to mine with your balance, but not to spend it.

[Troglodactyl]

Do you think people will be reluctant to mine, because they don't want to have their wallet open and private keys on a networked computer? (no cold storage protection)  Is there any way to allow more peace of mind than I am imagining?

I think NXT had a problem that not many people ran nodes and not many people bothered to mine.

Perhaps something with multi-signature addresses.   If you require 2 signatures to spend a balance, but just 1 to mine with it then you may have additional security.

This would open us up to a new kind of mining pool, also.

[bytemaster]

Do you think people will be reluctant to mine, because they don't want to have their wallet open and private keys on a networked computer? (no cold storage protection)  Is there any way to allow more peace of mind than I am imagining?

I think NXT had a problem that not many people ran nodes and not many people bothered to mine.

Perhaps something with multi-signature addresses.   If you require 2 signatures to spend a balance, but just 1 to mine with it then you may have additional security.

[Agent86]

Do you think people will be reluctant to mine, because they don't want to have their wallet open and private keys on a networked computer? (no cold storage protection)  Is there any way to allow more peace of mind than I am imagining?

I think NXT had a problem that not many people ran nodes and not many people bothered to mine.

[sumantso]

Is it possible to have a system where the mining reward is shared by all the active nodes? This will incentivize keeping nodes running.

[bitbadger]

Can someone first clarify the meaning of 'mining' in the context of TaPOS?

It is not something similar to POW that performs hashing computation.

For TaPOS, I don't think it is hashing or anything computational intensive. That is not the purpose of POS. Is this  'mining' just 'leave the wallet process running'?

Even in 'standard' POS such as Peercoin, there is a "mining" process.  This is to create a random/stochastic process for the minting of PoS blocks, similar to the mining of PoW coins.  If it were deterministic in a sort of round-robin process, this would create security problems.  So there is still a "race" to "discover" the "best" block among all peers.... nobody can guess beforehand who will mint the next PoS block.

Each client works constantly on a hashing problem.  The PoS block contains only a single transaction, the miner sending his staked coins to himself.  The difficulty is very easy compared to PoW, but it is still a hashing problem.  Peercoin keeps the hashrate low by having the hashrate limited to 1 hash per second.  The hash is based only on the present timestamp, and some essentially static data (the PoS transaction inputs, and the hashes of previous blocks).  So the equivalent to a PoW nonce is the timestamp, which changes only once per second!  I suppose somebody could "cheat" by calculating ahead, but the utility of this is limited to the next couple of minutes -- by that time, the next block will be found, which will change the data to be hashed.  And the required difficulty decreases according to the number of stake-days included in the block.  The stake-days, of course, can be verified by anybody on the network.

So you can still be "lucky" or "unlucky" in PoS mining.  There is still a hashing problem, and a difficulty level to be met.

It appears that bytemaster has a different idea in mind for TaPoS mining, which would allow those with greater hashpower to mine blocks more readily.  I am not 100% sold on the idea, as it could lead to another hardware arms-race, but the PoS rewards are not likely to be high enough to really matter.

EDIT: It is *necessary* to have mining rewards on top of TaPoS, as simple TaPoS does not require one to participate in the "minting" of blocks in order to obtain one's PoS/"dividends" (unlike Peercoin).  Each transaction includes fees which are burned.  This increases every stakeholder's proportional interest in the BitShares ecosystem, whether they are connected to the network or not; whether they are mining or not.  This greatly simplifies the PoS part, but it requires the addition of mining rewards in order to incentivize mining.  If this can be achieved without creating a hardware arms-race, that would be great.

[ffwong]

Can someone first clarify the meaning of 'mining' in the context of TaPOS?

It is not something similar to POW that performs hashing computation.

For TaPOS, I don't think it is hashing or anything computational intensive. That is not the purpose of POS. Is this  'mining' just 'leave the wallet process running'?

[oco101]

Selling Bitshares to buy mining hardware seems to be pointless if PoS can secure the network. I thought Bytemaster was going with Ripple consensus and if that is the case why do we need mining via PoW at all?

Unfortunately he's not going with Ripple consensus anymore. He mention that he'll maybe look in to it for the next Dac's witch I hope he does !! In the meantime we are stuck with mining and all the problems drltc mentioned.

[theoretical]

For what purpose is hashing power used?

This is an excellent question.  The answer is provided by the thread's opening post.

we still rely upon mining for one function:  decentralized selection of who gets to produce the next block.

It's not that including PoW mining is desirable.  From what I've seen, all Invictus / bytemaster marketing materials, forum posts, etc. about BitShares have suggested that PoW is undesirable.

But the network must have a means of selecting one node to produce the next block.  And PoW mining is a known algorithm to have the network select a single node in a decentralized fashion.

Using PoW in this way has some traps for the unwary protocol designer.  I'm skeptical about the specific way bytemaster proposed to use PoW.  I'm still open-minded about whether a PoW-based scheme, or a PoW/PoS hybrid, could be workable.

I've suggested looking at Peercoin for design ideas.  I'm not very familiar with its inner workings, but since it's a PoS currency which has been proven in the real world, it seems like a natural place to look.

[luckybit]

The equation in my previous post,

    R = h * c * f(t)

has an interesting consequence.  Let's assume you can trade US dollars for either hardware or coins.  In particular you have a budget of W dollars.  You spend x dollars on coins, and W-x dollars on hardware.  Then your rate becomes:

    R = k * (W - x) * x * f(t)

where k is a constant factor (the product of the hps-per-dollar and coins-per-dollar exchange rates).

This is a parabola with two zeros, at x=0 and x=W; the maximum occurs at a vertex halfway between them.  The practical interpretation is that profit-maximizing miners will desire to have equal investments in coins and hardware.  This means miners will serve as a buffer that will stabilize the USD exchange rate.  If BitShares start to lose value, miners will be able to increase their profits by selling hardware and buying BitShares; if BitShares value starts to increase, miners will sell BitShares and buy more hardware to maintain that 1:1 investment ratio.

There are significant downsides, however.  If BitShares market capitalization becomes big, it seems wrong to believe that investments in mining hardware will keep pace.  That means people who have hardware will play a disproportionate role in securing the network.  Also, it seems reasonable to assume BitShares will experience a rise in value after launch as people join the ecosystem due to its features.  The stabilization effect above will act as a brake on this increase in value; miners will sell BitShares to invest in hardware.  Presumably AGS / PTS genesis block investors will be particularly annoyed.  I would assume such investors would prefer not to have any brakes on the early expansion of BitShares' market capitalization, and would be willing to pay the price of increased exchange rate volatility in the long run.

I think Peercoin solves these issues by a complex mechanism that amounts to putting a very small upper bound on the hashpower a single address is allowed to have.  I'm not sure off the top of my head how Peercoin deals with sybil whales.  But Peercoin is surely a good place to look for proof-of-stake design ideas.  I would go so far as to say that deviations from Peercoin's design should require significant justification.

I think the goal should be the constant upward increase in price of Bitshares stock. It's not a currency so volatility is irrelevant. How can you provide an incentive to make people want to hold and avoid selling Bitshares unless absolutely necessary?

Selling Bitshares to buy mining hardware seems to be pointless if PoS can secure the network. I thought Bytemaster was going with Ripple consensus and if that is the case why do we need mining via PoW at all?

Do your equations alter the incentive? Remember Bitshares is a stock not a currency, and Bitshares is supposed to resemble a profitable corporation, not a precious metal.

Think of Bitshares as Birkshares (like Berkshire Hathaway). How can we make it the penultimate store of value? If miners can sell their hardware then you want them to buy more Bitshares. If they sell Bitshares to buy mining hardware then something is critically wrong.

This would mean the network would be insecure if they don't mine with better hardware. Is that really the case?