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Offline bytemaster

PowerBall, DAC - Lottery Based Mining Experiment
« on: November 20, 2013, 09:09:50 AM »

I have a theory that turning mining into a lottery ticket with a life-changing payout disproportional to the odds of winning would result in an increase in the number of solo-miners.    These miners don't mine for the steady $30/month they could get from constant pool mining, but for the off chance that they could win the million dollar jackpot.   The existence of the jackpot would not change those who traditionally mine in pools because they would have to divide the jackpot among everyone in the pool and thus not be life-changing.   However, once the pot for the lottery grew large enough they would defect from pools in a bid to win big.

This will also change the trust relationship with pools.  Suppose an normally honest pool operator suddenly wins big, do you trust him to divide it among his pool members?   

So here is how you would modify ProtoShares to enable a lottery base mining reward:

1) the value of a coinbase transaction is not known until the block hash is found.
2) calculate ratio (R) of block_difficulty / target_difficulty which should be a number greater than 1
3) if R > 100  && < 1000  then R = 100
4) if R <= 100 then
         COINBASE = MIN_BLOCK_REWARD * R
         POT +=  100 * MIN_BLOCK_REWARD - COINBASE
5) else R > 1000
         COINBASE = 0.5 * POT
         POT -= COINBASE

This system should result in a POT that constantly grows with a predictable maximum average inflation rate.   

Now assuming this coin had other utility and thus a non-0 value, then this incentive structure would motivate gamblers to solo-mine... for the benefit of the large payout.   The higher the value of the pot the more miners would solo-mine.   If no-one solo-mines then the reward system is little different than current coins using large pools.  By this theory I conclude the result is more decentralized.

Now to make this a free-standing DAC you must create a demand for the coins so that can be achieved by adjusting the payout of the POT proportional to the number of PowerBall shares are held at the coinbase address.  0 shares results in 0 payout and the more shares you own the larger the cut of the payout you get but never exceeding 50%. 

As a free-standing system this coin will only be of interest to gamblers and the value of the POT will be proportional to the demand for the coin.    You buy the coin so you can gamble on getting more coins by mining and selling your winnings to future gamblers! 

If you don't solo-mine then your profits are limited to the appreciation of the coin and a small margin above electric costs.  If you solo-mine however, then you could win big in a life-changing way :) 

Thoughts?






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Offline phoenix

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #1 on: November 20, 2013, 02:47:10 PM »
This is a great idea, but it hinges very heavily on the coins having a practical use. Any ideas what that could be?
Edit: Also, the idea of the pot payout depending on the coins already at the address is a great idea to help encourage adoption among people trying to mine the coin, but not among people looking for a use for the coin
« Last Edit: November 20, 2013, 05:25:08 PM by phoenix »
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Offline cass

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #2 on: November 20, 2013, 05:27:54 PM »
sounds like a great idea ... a great benefit for solominers surely
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Offline barwizi

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #3 on: November 20, 2013, 06:04:49 PM »
Let's experiment then.
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Offline Stan

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #4 on: November 20, 2013, 07:15:14 PM »
This is a great idea, but it hinges very heavily on the coins having a practical use. Any ideas what that could be?
Edit: Also, the idea of the pot payout depending on the coins already at the address is a great idea to help encourage adoption among people trying to mine the coin, but not among people looking for a use for the coin

Well, if it were a real corporation, the corporation would keep half of the proceeds for itself and award the other half in some structured array of big and little prizes.  It would then pay out those profits to its shareholders. That would be one reason to hold the shares - as a simple investor in a for-profit enterprise.

So, if like any DAC you could either mine or buy your lottery tickets, er, I mean, PowerShares.  This implies that perhaps PowerShareholders should have a chance to win too.  Then there would two reasons to buy PowerShares:

  • As a currency for playing the lottery
  • As stock in the business that runs the lottery

There could also be two reasons for only little guys to mine:

  • To earn a steady paycheck in PowerShares useful for either of the above reasons
  • To have a chance to win an "employee jackpot" useful for either of the above reasons

Do I sell my winnings or double down by holding them for a chance to win bigger?
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline bytemaster

Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #5 on: November 20, 2013, 07:22:28 PM »
Let's experiment then.

I am willing to pay someone to create this provided it honors the holders of ProtoShares in the genesis block.    I am looking for a full-time DAC developer that can quickly put together interesting new DACs like this to experiment with various incentive models.   I will offer a 1 BTC referral bounty to anyone who can give me a lead that results in the hiring of someone with the skills necessary to develop variations on Bitcoin in a rapid manner.
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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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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #6 on: November 20, 2013, 07:48:35 PM »
This is a great idea, but it hinges very heavily on the coins having a practical use. Any ideas what that could be?
Edit: Also, the idea of the pot payout depending on the coins already at the address is a great idea to help encourage adoption among people trying to mine the coin, but not among people looking for a use for the coin

Well, if it were a real corporation, the corporation would keep half of the proceeds for itself and award the other half in some structured array of big and little prizes.  It would then pay out those profits to its shareholders. That would be one reason to hold the shares - as a simple investor in a for-profit enterprise.

So, if like any DAC you could either mine or buy your lottery tickets, er, I mean, PowerShares.  This implies that perhaps PowerShareholders should have a chance to win too.  Then there would two reasons to buy PowerShares:

  • As a currency for playing the lottery
  • As stock in the business that runs the lottery

There could also be two reasons for only little guys to mine:

  • To earn a steady paycheck in PowerShares useful for either of the above reasons
  • To have a chance to win an "employee jackpot" useful for either of the above reasons

Do I sell my winnings or double down by holding them for a chance to win bigger?

So by holding onto my powershares, I can earn dividends from the lottery rewards, or I could sell them to make money immediately.
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Offline Stan

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #7 on: November 20, 2013, 07:59:00 PM »
This is a great idea, but it hinges very heavily on the coins having a practical use. Any ideas what that could be?
Edit: Also, the idea of the pot payout depending on the coins already at the address is a great idea to help encourage adoption among people trying to mine the coin, but not among people looking for a use for the coin

Well, if it were a real corporation, the corporation would keep half of the proceeds for itself and award the other half in some structured array of big and little prizes.  It would then pay out those profits to its shareholders. That would be one reason to hold the shares - as a simple investor in a for-profit enterprise.

So, if like any DAC you could either mine or buy your lottery tickets, er, I mean, PowerShares.  This implies that perhaps PowerShareholders should have a chance to win too.  Then there would two reasons to buy PowerShares:

  • As a currency for playing the lottery
  • As stock in the business that runs the lottery

There could also be two reasons for only little guys to mine:

  • To earn a steady paycheck in PowerShares useful for either of the above reasons
  • To have a chance to win an "employee jackpot" useful for either of the above reasons

Do I sell my winnings or double down by holding them for a chance to win bigger?

So by holding onto my powershares, I can earn dividends from the lottery rewards, or I could sell them to make money immediately.

... and be eligible for the ticketholder, er, shareholder jackpot as well.

PowerShares could be like season tickets for the lottery.  As long as you hold them the full period between each jackpot, you are eligible for every new shareholder jackpot event.



« Last Edit: November 20, 2013, 08:08:56 PM by Stan »
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

Offline phoenix

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #8 on: November 20, 2013, 08:00:47 PM »
This is a great idea, but it hinges very heavily on the coins having a practical use. Any ideas what that could be?
Edit: Also, the idea of the pot payout depending on the coins already at the address is a great idea to help encourage adoption among people trying to mine the coin, but not among people looking for a use for the coin

Well, if it were a real corporation, the corporation would keep half of the proceeds for itself and award the other half in some structured array of big and little prizes.  It would then pay out those profits to its shareholders. That would be one reason to hold the shares - as a simple investor in a for-profit enterprise.

So, if like any DAC you could either mine or buy your lottery tickets, er, I mean, PowerShares.  This implies that perhaps PowerShareholders should have a chance to win too.  Then there would two reasons to buy PowerShares:

  • As a currency for playing the lottery
  • As stock in the business that runs the lottery

There could also be two reasons for only little guys to mine:

  • To earn a steady paycheck in PowerShares useful for either of the above reasons
  • To have a chance to win an "employee jackpot" useful for either of the above reasons

Do I sell my winnings or double down by holding them for a chance to win bigger?

So by holding onto my powershares, I can earn dividends from the lottery rewards, or I could sell them to make money immediately.

... and be eligible for the ticketholder, er, shareholder jackpot as well.

Is the shareholder jackpot separate from the miners jackpot?
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Offline Stan

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #9 on: November 20, 2013, 08:12:30 PM »
Why not?  The company can balance the products it offers to achieve multiple goals as long as it results in a profit for powershareholders.

Incentivize people to keep mining and keep holding their winnings as both players and owners.

(This gives those of us who are too sophisticated to play the lotto an excuse to buy PowerShares as an investment, you see...)
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Offline Stan

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #10 on: November 20, 2013, 08:22:27 PM »
PowerBall, DAC is a lottery within a lottery.

We are using it to test out concepts for lottery-based mining by implementing an Unmanned Lottery Company whose lottery tickets are PowerShares themselves.

And ProtoShare holders start out with a matching set of PowerShares as a share in the DAC and a share in the recurring chances to win - thereby demonstrating to one and all how ProtoShares will actually work.

Absolutely poetic!

 :)
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Offline phoenix

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #11 on: November 20, 2013, 08:26:52 PM »
Very interesting. Of course like any good investment there will be different strategies, such as holding all mined shares, selling some of them, or even buying more than you can mine

So here is how you would modify ProtoShares to enable a lottery base mining reward:

1) the value of a coinbase transaction is not known until the block hash is found.
2) calculate ratio (R) of block_difficulty / target_difficulty which should be a number greater than 1
3) if R > 100  && < 1000  then R = 100
4) if R <= 100 then
         COINBASE = MIN_BLOCK_REWARD * R
         POT +=  100 * MIN_BLOCK_REWARD - COINBASE
5) else R > 1000
         COINBASE = 0.5 * POT
         POT -= COINBASE


I have a feeling that there will also be different strategies in mining, ranging from mine out a block then release it asap, to continuing to mine to try to hit a higher reward.
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Offline Riverhead

Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #12 on: November 20, 2013, 08:34:00 PM »
PowerBall, DAC is a lottery within a lottery.

We are using it to test out concepts for lottery-based mining by implementing an Unmanned Lottery Company whose lottery tickets are PowerShares themselves.

And ProtoShare holders start out with a matching set of PowerShares as a share in the DAC and a share in the recurring chances to win - thereby demonstrating to one and all how ProtoShares will actually work.

Absolutely poetic!

 :)

As a holder of ProtoShares do I automatically get a piece of the action of the Powerball DAC with no action required?  If this is the case than I'm starting to understand the value of being a PTS owner.

Once someone wins and the DAC pays out its shareholders their cut how would that payment look?  Would I need a separate wallet for PowerShares or would I receive an amount of PTS to my existing wallet/address?

Offline phoenix

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #13 on: November 20, 2013, 08:41:31 PM »
PowerBall, DAC is a lottery within a lottery.

We are using it to test out concepts for lottery-based mining by implementing an Unmanned Lottery Company whose lottery tickets are PowerShares themselves.

And ProtoShare holders start out with a matching set of PowerShares as a share in the DAC and a share in the recurring chances to win - thereby demonstrating to one and all how ProtoShares will actually work.

Absolutely poetic!

 :)

As a holder of ProtoShares do I automatically get a piece of the action of the Powerball DAC with no action required?  If this is the case than I'm starting to understand the value of being a PTS owner.

Once someone wins and the DAC pays out its shareholders their cut how would that payment look?  Would I need a separate wallet for PowerShares or would I receive an amount of PTS to my existing wallet/address?

My understanding is that you would download the Powerball DAC wallet, and then you import your PTS wallet data into it, and you get your Powerball shares. Then, you do indeed get the dividends from people winning the lottery, but you get them in Powerball shares. It's up to you to decide whether to keep them for a better chance of winning and more dividends, or to sell them for BTC/PTS
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Offline Stan

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Re: PowerBall, DAC - Lottery Based Mining Experiment
« Reply #14 on: November 20, 2013, 08:45:12 PM »
PowerBall, DAC is a lottery within a lottery.

We are using it to test out concepts for lottery-based mining by implementing an Unmanned Lottery Company whose lottery tickets are PowerShares themselves.

And ProtoShare holders start out with a matching set of PowerShares as a share in the DAC and a share in the recurring chances to win - thereby demonstrating to one and all how ProtoShares will actually work.

Absolutely poetic!

 :)

As a holder of ProtoShares do I automatically get a piece of the action of the Powerball DAC with no action required?  If this is the case than I'm starting to understand the value of being a PTS owner.

Once someone wins and the DAC pays out its shareholders their cut how would that payment look?  Would I need a separate wallet for PowerShares or would I receive an amount of PTS to my existing wallet/address?

Yes, if the implementer of this DAC agrees to honor the ProtoShares Social Contract.  That would of course be a condition for Invictus to sponsor it, which bytemaster has offered to do under those terms.

Winnings would be paid out according to the terms of the final lottery design and published rules. 

They would automagically show up with all your other shares/coins in your Keyhotee wallet and presumably any compliant third party wallets.
Anything said on these forums does not constitute an intent to create a legal obligation or contract of any kind.   These are merely my opinions which I reserve the right to change at any time.

 

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