Author Topic: Decentralizing Mining - The future of BitShares Mining  (Read 56368 times)

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Offline bytemaster

What if the invested period was varied. Not sure how hard this would be to program in, but say, every block's reward would have one of six maturity dates from one to six months. Kind of like a CD. That way there would be capital interest in the market right away, but long term investors, too.

You could have a 'random maturity date' based upon the hash of the block found such that the average maturity date is 6 months.  This would have almost no effect on pools who's average maturity date would be 6 months, but individuals solo-mining may get lucky and have a 1 day or week maturity.

This would keep the mining loto effect for solo-miners without enabling pools!
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Offline spoonman

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What if the invested period was varied. Not sure how hard this would be to program in, but say, every block's reward would have one of six maturity dates from one to six months. Kind of like a CD. That way there would be capital interest in the market right away, but long term investors, too.

Offline bytemaster

I wish there was a way for mining to not be a lottery but rather a process that everyone who participates is rewarded for per their contribution.  We do that now, but it's like a game of bingo when it should be more like renting your computer by the hour to the needs of the protocol.   Solo mining and distribution that makes people happy are flatly at odds with mass adoption, so while the incentives line up all over this beast here they very much do not - For each new person who I convince to mine makes it that much harder for me to find a block, and past a certain point, say a million solo miners, it seems like an impossibility for everyone to find a block so you limit your potential success.

Correct me if i'm wrong, but isn't Keyhotee going to have a system where you get an increase in reputation points for both solving a block in the blockchain of Keyhotee ID's, and for getting close to solving a block? If this is correct, then it might be possible for Bitshares or some other crypto-currency to work like that, where people can earn coins both by solving a block, and by getting a difficulty close to the required difficulty.

Keyhotee ID has you merge-mine name registration transactions along with the block.   This is good for a network with no other incentive for mining, but would slow down payments if you had to spend 8 hours to merge-mine every transaction.  A down side to this is that it increases the size of every transaction and thus the block chain.

But I suspect there may be something along these lines that could be employed.

So what exactly is on the Keyhotee Block chain besides the name registrations?

Keyhotee ID only has name registrations and was designed to support 1 billion users with a little bandwidth and storage requirements as possible.    I want everyone to have the Keyhotee ID blockchain locally so they can lookup names in an anonymous and secure manner without having to trust a 3rd party.   You can still have light-weight clients, but they would reveal the name lookups to snoops.
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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 phoenix

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I wish there was a way for mining to not be a lottery but rather a process that everyone who participates is rewarded for per their contribution.  We do that now, but it's like a game of bingo when it should be more like renting your computer by the hour to the needs of the protocol.   Solo mining and distribution that makes people happy are flatly at odds with mass adoption, so while the incentives line up all over this beast here they very much do not - For each new person who I convince to mine makes it that much harder for me to find a block, and past a certain point, say a million solo miners, it seems like an impossibility for everyone to find a block so you limit your potential success.

Correct me if i'm wrong, but isn't Keyhotee going to have a system where you get an increase in reputation points for both solving a block in the blockchain of Keyhotee ID's, and for getting close to solving a block? If this is correct, then it might be possible for Bitshares or some other crypto-currency to work like that, where people can earn coins both by solving a block, and by getting a difficulty close to the required difficulty.

Keyhotee ID has you merge-mine name registration transactions along with the block.   This is good for a network with no other incentive for mining, but would slow down payments if you had to spend 8 hours to merge-mine every transaction.  A down side to this is that it increases the size of every transaction and thus the block chain.

But I suspect there may be something along these lines that could be employed.

So what exactly is on the Keyhotee Block chain besides the name registrations?
Protoshares: Pg5EhSZEXHFjdFUzpxJbm91UtA54iUuDvt
Bitmessage: BM-NBrGi2V3BZ8REnJM7FPxUjjkQp7V5D28

Offline bytemaster

I wish there was a way for mining to not be a lottery but rather a process that everyone who participates is rewarded for per their contribution.  We do that now, but it's like a game of bingo when it should be more like renting your computer by the hour to the needs of the protocol.   Solo mining and distribution that makes people happy are flatly at odds with mass adoption, so while the incentives line up all over this beast here they very much do not - For each new person who I convince to mine makes it that much harder for me to find a block, and past a certain point, say a million solo miners, it seems like an impossibility for everyone to find a block so you limit your potential success.

Correct me if i'm wrong, but isn't Keyhotee going to have a system where you get an increase in reputation points for both solving a block in the blockchain of Keyhotee ID's, and for getting close to solving a block? If this is correct, then it might be possible for Bitshares or some other crypto-currency to work like that, where people can earn coins both by solving a block, and by getting a difficulty close to the required difficulty.

Keyhotee ID has you merge-mine name registration transactions along with the block.   This is good for a network with no other incentive for mining, but would slow down payments if you had to spend 8 hours to merge-mine every transaction.  A down side to this is that it increases the size of every transaction and thus the block chain.

But I suspect there may be something along these lines that could be employed.
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

I think you've nailed it here Bytemaster - Most of the cloud miners I deal with have been selling PTS to fund ongoing mining operations, if you force them to not churn onto the market with a 6 month maturity period you chase out anyone who isn't willing to have a long time horizon.  I wouldn't buy cloud computing, but I would have my desktop mining in the background.

I wish there was a way for mining to not be a lottery but rather a process that everyone who participates is rewarded for per their contribution.  We do that now, but it's like a game of bingo when it should be more like renting your computer by the hour to the needs of the protocol.   Solo mining and distribution that makes people happy are flatly at odds with mass adoption, so while the incentives line up all over this beast here they very much do not - For each new person who I convince to mine makes it that much harder for me to find a block, and past a certain point, say a million solo miners, it seems like an impossibility for everyone to find a block so you limit your potential success.

With 100,000 blocks per year, and a million users, you have a 1 in 10 chance of hitting the jackpot and winning a block worth $10,000 or more (assuming BTS are valuable like Bitcoin).  The point is people feel no pain for running the software (Keyhotee) which they will be doing as part of their email client, but they have this chance of getting a bonus equal to 25% the median income.   

This system does not prevent pools, it just forces pools to invest in the protocol for 6 months.   Anyone with a long-term commitment to the protocol, such as Invictus, could run a very profitable pool by charging high fees to those who want 'instant payouts'.  The pool would have to buy mature shares on the market to payout pool miners and then see a profit 6 months later when the blocks mature.  This is kind of like investing in a fixed interest CD on the part of the pool operator and the interest is paid from mining fees which I suspect would be near 15% or more.  In a network the size of Bitcoin, worth $5 billion dollars and mining $1 billion dollars per year worth of new BTC a pool (ASIC or otherwise) would have to lock up $500 million dollars for 6 months to perform a 51% attack in addition to the cost of the hardware.   

This significantly increases the security of the network from 51% attacks by greatly increasing the cost.

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 phoenix

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I wish there was a way for mining to not be a lottery but rather a process that everyone who participates is rewarded for per their contribution.  We do that now, but it's like a game of bingo when it should be more like renting your computer by the hour to the needs of the protocol.   Solo mining and distribution that makes people happy are flatly at odds with mass adoption, so while the incentives line up all over this beast here they very much do not - For each new person who I convince to mine makes it that much harder for me to find a block, and past a certain point, say a million solo miners, it seems like an impossibility for everyone to find a block so you limit your potential success.

Correct me if i'm wrong, but isn't Keyhotee going to have a system where you get an increase in reputation points for both solving a block in the blockchain of Keyhotee ID's, and for getting close to solving a block? If this is correct, then it might be possible for Bitshares or some other crypto-currency to work like that, where people can earn coins both by solving a block, and by getting a difficulty close to the required difficulty.
Protoshares: Pg5EhSZEXHFjdFUzpxJbm91UtA54iUuDvt
Bitmessage: BM-NBrGi2V3BZ8REnJM7FPxUjjkQp7V5D28

Offline Lighthouse

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I think you've nailed it here Bytemaster - Most of the cloud miners I deal with have been selling PTS to fund ongoing mining operations, if you force them to not churn onto the market with a 6 month maturity period you chase out anyone who isn't willing to have a long time horizon.  I wouldn't buy cloud computing, but I would have my desktop mining in the background.

I wish there was a way for mining to not be a lottery but rather a process that everyone who participates is rewarded for per their contribution.  We do that now, but it's like a game of bingo when it should be more like renting your computer by the hour to the needs of the protocol.   Solo mining and distribution that makes people happy are flatly at odds with mass adoption, so while the incentives line up all over this beast here they very much do not - For each new person who I convince to mine makes it that much harder for me to find a block, and past a certain point, say a million solo miners, it seems like an impossibility for everyone to find a block so you limit your potential success.
Before you say the price of PTS is too high, take a look at theThe Reason.  Protoshares are an entirely new type of Cryptocurrency, one that pays to hold.

Offline bytemaster

I really like the vesting idea. However, my major concern is that with something like BitShares, you want a bigger market at first for a prediction market to work well. If you think the people who hold ProtoShares will be enough to give BitShares the momentum it needs to maintain good markets in basic BitAssets like BitUSD, BitBTC, etc. then I am all for it. If we don't have enough volume for these markets to be efficient, then it will be very hard to convince the others after 6 months that the idea will work with a bigger pool. Just my 2 cents.

There is always ample supply of currency on the markets and transaction fees are available to all miners with the normal 120 block maturity.   I don't see anything that would limit the user base.
Not limit the user base, but limit the initial supply of BitAssets. Consider say 1 million BitShares in existence at launch (several people won't convert their ProtoShares to BitShares and use it immediately, right?) It would be hard to predict what % of initial BitShares will be converted to BitAssets, but I am guessing 10% (may be I am off?) so you have 100,000 BitShares out. At today's market rate, that's the equivalent of 1000 BitBTC but then not everyone is going to play the BitBTC market, there are several others. So say 500 BitBTC in the system at launch. Do you think this is enough supply for the prediction market to work well and not skew towards heavy longs/shorts for extended periods? I don't know the answer, just saying it's something you should consider.

There is no 'conversion' between ProtoShares and BitShares... everyone will immediately have BOTH ProtoShares and BitShares.  Your BitShares are kind of a 'dividend payment' on your ProtoShares :).    Therefore, there is no cost or conversion to create BitShares from ProtoShares and in fact your ProtoShares will remain valuable for future DACs.
Convert was a wrong word to use, I didn't mean that, just meant the people who would 'redeem' their protoshares for bitshares will not be 100%. Still, you didn't answer the main question, which is, with the current volume, do you think the prediction market can be maintained?

Just like Bitcoin can operate with ANY SUPPLY because they are divisible, the value of BitShares will rise to support any amount of trading volume using smaller and smaller units.   
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 ruletheworld

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I really like the vesting idea. However, my major concern is that with something like BitShares, you want a bigger market at first for a prediction market to work well. If you think the people who hold ProtoShares will be enough to give BitShares the momentum it needs to maintain good markets in basic BitAssets like BitUSD, BitBTC, etc. then I am all for it. If we don't have enough volume for these markets to be efficient, then it will be very hard to convince the others after 6 months that the idea will work with a bigger pool. Just my 2 cents.

There is always ample supply of currency on the markets and transaction fees are available to all miners with the normal 120 block maturity.   I don't see anything that would limit the user base.
Not limit the user base, but limit the initial supply of BitAssets. Consider say 1 million BitShares in existence at launch (several people won't convert their ProtoShares to BitShares and use it immediately, right?) It would be hard to predict what % of initial BitShares will be converted to BitAssets, but I am guessing 10% (may be I am off?) so you have 100,000 BitShares out. At today's market rate, that's the equivalent of 1000 BitBTC but then not everyone is going to play the BitBTC market, there are several others. So say 500 BitBTC in the system at launch. Do you think this is enough supply for the prediction market to work well and not skew towards heavy longs/shorts for extended periods? I don't know the answer, just saying it's something you should consider.

There is no 'conversion' between ProtoShares and BitShares... everyone will immediately have BOTH ProtoShares and BitShares.  Your BitShares are kind of a 'dividend payment' on your ProtoShares :).    Therefore, there is no cost or conversion to create BitShares from ProtoShares and in fact your ProtoShares will remain valuable for future DACs.
Convert was a wrong word to use, I didn't mean that, just meant the people who would 'redeem' their protoshares for bitshares will not be 100%. Still, you didn't answer the main question, which is, with the current volume, do you think the prediction market can be maintained?
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Offline bytemaster

I really like the vesting idea. However, my major concern is that with something like BitShares, you want a bigger market at first for a prediction market to work well. If you think the people who hold ProtoShares will be enough to give BitShares the momentum it needs to maintain good markets in basic BitAssets like BitUSD, BitBTC, etc. then I am all for it. If we don't have enough volume for these markets to be efficient, then it will be very hard to convince the others after 6 months that the idea will work with a bigger pool. Just my 2 cents.

There is always ample supply of currency on the markets and transaction fees are available to all miners with the normal 120 block maturity.   I don't see anything that would limit the user base.
Not limit the user base, but limit the initial supply of BitAssets. Consider say 1 million BitShares in existence at launch (several people won't convert their ProtoShares to BitShares and use it immediately, right?) It would be hard to predict what % of initial BitShares will be converted to BitAssets, but I am guessing 10% (may be I am off?) so you have 100,000 BitShares out. At today's market rate, that's the equivalent of 1000 BitBTC but then not everyone is going to play the BitBTC market, there are several others. So say 500 BitBTC in the system at launch. Do you think this is enough supply for the prediction market to work well and not skew towards heavy longs/shorts for extended periods? I don't know the answer, just saying it's something you should consider.

There is no 'conversion' between ProtoShares and BitShares... everyone will immediately have BOTH ProtoShares and BitShares.  Your BitShares are kind of a 'dividend payment' on your ProtoShares :).    Therefore, there is no cost or conversion to create BitShares from ProtoShares and in fact your ProtoShares will remain valuable for future DACs.

But if the number of Bitshares available for trading stays the same for 6 months, then suddenly starts increasing as the blocks mature, won't there be a massive opportunity for people to short the market? Because the demand probably won't increase very much from halfway through month five to halfway through month six, but the supply will, making the value of any individual bitshare drop.

The supply in 6 months will only increase at the rate of '1 block per 5 minutes' and so this does nothing to change the inflation rate that would other wise exist with traditional mining other than delay it for 6 months.   
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 phoenix

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I really like the vesting idea. However, my major concern is that with something like BitShares, you want a bigger market at first for a prediction market to work well. If you think the people who hold ProtoShares will be enough to give BitShares the momentum it needs to maintain good markets in basic BitAssets like BitUSD, BitBTC, etc. then I am all for it. If we don't have enough volume for these markets to be efficient, then it will be very hard to convince the others after 6 months that the idea will work with a bigger pool. Just my 2 cents.

There is always ample supply of currency on the markets and transaction fees are available to all miners with the normal 120 block maturity.   I don't see anything that would limit the user base.
Not limit the user base, but limit the initial supply of BitAssets. Consider say 1 million BitShares in existence at launch (several people won't convert their ProtoShares to BitShares and use it immediately, right?) It would be hard to predict what % of initial BitShares will be converted to BitAssets, but I am guessing 10% (may be I am off?) so you have 100,000 BitShares out. At today's market rate, that's the equivalent of 1000 BitBTC but then not everyone is going to play the BitBTC market, there are several others. So say 500 BitBTC in the system at launch. Do you think this is enough supply for the prediction market to work well and not skew towards heavy longs/shorts for extended periods? I don't know the answer, just saying it's something you should consider.

There is no 'conversion' between ProtoShares and BitShares... everyone will immediately have BOTH ProtoShares and BitShares.  Your BitShares are kind of a 'dividend payment' on your ProtoShares :).    Therefore, there is no cost or conversion to create BitShares from ProtoShares and in fact your ProtoShares will remain valuable for future DACs.

But if the number of Bitshares available for trading stays the same for 6 months, then suddenly starts increasing as the blocks mature, won't there be a massive opportunity for people to short the market? Because the demand probably won't increase very much from halfway through month five to halfway through month six, but the supply will, making the value of any individual bitshare drop.
Protoshares: Pg5EhSZEXHFjdFUzpxJbm91UtA54iUuDvt
Bitmessage: BM-NBrGi2V3BZ8REnJM7FPxUjjkQp7V5D28

Offline bytemaster

I really like the vesting idea. However, my major concern is that with something like BitShares, you want a bigger market at first for a prediction market to work well. If you think the people who hold ProtoShares will be enough to give BitShares the momentum it needs to maintain good markets in basic BitAssets like BitUSD, BitBTC, etc. then I am all for it. If we don't have enough volume for these markets to be efficient, then it will be very hard to convince the others after 6 months that the idea will work with a bigger pool. Just my 2 cents.

There is always ample supply of currency on the markets and transaction fees are available to all miners with the normal 120 block maturity.   I don't see anything that would limit the user base.
Not limit the user base, but limit the initial supply of BitAssets. Consider say 1 million BitShares in existence at launch (several people won't convert their ProtoShares to BitShares and use it immediately, right?) It would be hard to predict what % of initial BitShares will be converted to BitAssets, but I am guessing 10% (may be I am off?) so you have 100,000 BitShares out. At today's market rate, that's the equivalent of 1000 BitBTC but then not everyone is going to play the BitBTC market, there are several others. So say 500 BitBTC in the system at launch. Do you think this is enough supply for the prediction market to work well and not skew towards heavy longs/shorts for extended periods? I don't know the answer, just saying it's something you should consider.

There is no 'conversion' between ProtoShares and BitShares... everyone will immediately have BOTH ProtoShares and BitShares.  Your BitShares are kind of a 'dividend payment' on your ProtoShares :).    Therefore, there is no cost or conversion to create BitShares from ProtoShares and in fact your ProtoShares will remain valuable for future DACs.
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

There is another added cost the 6 month vesting adds to pools, interest.   If a pool operator must borrow funds to pay out immediately they are forgoing all of the interest they could have earned on those funds.   This makes the cost of pool mining easily 5% higher even without the fees.   As a result pools would have to charge around 10% or more if they want to profit from their operation and they would have to hedge their bets against any fall in the value of the currency.   

Overall, pool operators would be highly committed to the future success of the currency.
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 ruletheworld

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I really like the vesting idea. However, my major concern is that with something like BitShares, you want a bigger market at first for a prediction market to work well. If you think the people who hold ProtoShares will be enough to give BitShares the momentum it needs to maintain good markets in basic BitAssets like BitUSD, BitBTC, etc. then I am all for it. If we don't have enough volume for these markets to be efficient, then it will be very hard to convince the others after 6 months that the idea will work with a bigger pool. Just my 2 cents.

There is always ample supply of currency on the markets and transaction fees are available to all miners with the normal 120 block maturity.   I don't see anything that would limit the user base.
Not limit the user base, but limit the initial supply of BitAssets. Consider say 1 million BitShares in existence at launch (several people won't convert their ProtoShares to BitShares and use it immediately, right?) It would be hard to predict what % of initial BitShares will be converted to BitAssets, but I am guessing 10% (may be I am off?) so you have 100,000 BitShares out. At today's market rate, that's the equivalent of 1000 BitBTC but then not everyone is going to play the BitBTC market, there are several others. So say 500 BitBTC in the system at launch. Do you think this is enough supply for the prediction market to work well and not skew towards heavy longs/shorts for extended periods? I don't know the answer, just saying it's something you should consider.
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