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Offline bytemaster

Lucky Mining Request for Proposals
« on: November 22, 2013, 09:56:45 PM »

Lucky Mining
Lucky Mining is a new mining incentive designed to encourage solo-mining by gamblers.   With traditional mining there is a fixed average reward per hash that adjusts according to the difficulty to regulate the rate at which blocks are found.  Under this model there is statistically equal expectation for rewards over time whether solo-mining or pool mining.   As the difficulty increases to the point that the expected time for an individual to find a block approaches months, most users prefer to mine in pools at a slight fee rather than mine solo.   For these users there is no meaningful difference between finding one block per year and finding one block per century.  The rewards are small enough and infrequent enough that they might as well be the same.

Lucky Mining allows an individual to optionally mine at a much higher difficulty for a much higher reward.   So a miner may chose to solo-mine at 1000x the default difficulty, if they win they get 900x the default block reward.  If they find a block above the default difficulty but below the lottery difficulty get the 1/1000 the default reward for submitting the block.     

If this were Bitcoin then a Lucky Miner would be playing the Loto in the hopes of hitting a $17 million dollar jackpot.  This changes the economics of mining due to the irrational belief in luck and the intangible value placed on hope.   If enough people decide to buy hope rather than predictable low-margin mining rewards, then their combined hash power will increase the difficulty beyond the point where centralized for-profit miners can make money.   This will truly decentralize mining.

Implementation Details

Add a 16 bit field (odds) to the block header that represents the difficulty multiplier.  Traditional mining this value should be set to 1.
For Lotto Mining this value can be set between 100 and 2^16
The value of the coinbase transaction depends upon the hash of the block:
 
       if( calc_difficulty( hash(blockheader) ) > odds * current_target_difficuty ) 
             output of coinbase is valued at BaseReward * odds * 0.9
       if( calc_difficulty( hash(blockheader) ) > odds/2 * current_target_difficuty ) 
             output of coinbase is valued at BaseReward * odds * 0.9^2
          .... 
      if( calc_difficulty( hash(blockheader) ) > odds/N * current_target_difficuty ) 
             output of coinbase is valued at BaseReward * odds * 0.9^N
   
      else
             output of coinbase is valued at BaseReward / (2*odds)

This coinbase transaction will introduce an ‘external dependency’ on the block header to transactions that wish to spend this output. 

The coinbase transaction may only have 2 outputs: 1 for block rewards and 1 for fees. 

There should be a new Mining Tab added to the LuckyShares user interface that allows the user to select one of 3 mining options:  Traditional 50 Shares,  50,000 Shares Lotto, and 500,000 Shares Lotto Mining.   The underlying protocol will support any number, but the user interface will be kept simple.


I am looking for someone to submit bids on what it would cost to add this feature to ProtoShares.   We intend to fund the development of this with who ever is most qualified.  I am also looking for feedback on the system.
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 Pocket Sand

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Re: Lucky Mining Request for Proposals
« Reply #1 on: November 22, 2013, 10:07:56 PM »
So you plan on adding this to the existing Protoshares Block Chain?

Offline Stan

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Re: Lucky Mining Request for Proposals
« Reply #2 on: November 22, 2013, 10:17:29 PM »
So you plan on adding this to the existing Protoshares Block Chain?

This is a ProtoShares code base extension for potential use by derivatives of ProtoShares - future DACs that honor the ProtoShares Social Contract.

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.

Online Brekyrself

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Re: Lucky Mining Request for Proposals
« Reply #3 on: November 23, 2013, 08:43:41 AM »
I'm not code savvy, but is there any safe guard to prevent against people pooling the new lotto system just like ordinary pools?  Granted they would be all or nothing payout, some pools with lots of hash may find it even more rewarding?

Offline bytemaster

Re: Lucky Mining Request for Proposals
« Reply #4 on: November 23, 2013, 08:49:47 AM »
I'm not code savvy, but is there any safe guard to prevent against people pooling the new lotto system just like ordinary pools?  Granted they would be all or nothing payout, some pools with lots of hash may find it even more rewarding?

Nope, it would not be more rewarding, on average the lottery pays much less than straight up mining.
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 jgorham

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Re: Lucky Mining Request for Proposals
« Reply #5 on: November 26, 2013, 07:05:49 PM »
I think you are overestimating the appeal of a large win with a near zero chance of success. With the current price of Bitcoin, finding a block solo is worth about $20k but is extremely difficult. Miners aren't leaving pools to solo mine even though solo mining is very much a lottery at this point. Gamblers are willing to sacrifice some EV in order to achieve a sure return.

Now if solo mining offered a higher EV than pooled mining more people would take the chance, even if in practice it was very boom or bust. Offering 900x rewards at 1000x difficulty creates a situation where the EV is lower than in a mining pool, as well as creating a situation where most of the time the miner will see 0 return for their investment.

Offline bytemaster

Re: Lucky Mining Request for Proposals
« Reply #6 on: November 26, 2013, 07:48:59 PM »
With bitcoin lucky mining would pay out 20 million for the jackpot with varying degrees of success when a block is found.  So it isn't all or nothing.   


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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 mf-tzo

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Re: Lucky Mining Request for Proposals
« Reply #7 on: November 26, 2013, 09:49:26 PM »
Just some thoughts...

I think that the idea of lucky mining in order to decentralise mining is a very good one and will atract a lot of people.

However, the real problem for decentralising mining lies in making more simple the mining procedure for people with limited IT knowledge.
Personally, I want to mine but it is impossible for me to understand how to do this. It requieres a lot of time, which I unfortunatelly don't have, to go around forums and ask for instructions and explanation how to do things. It is very difficult for simple people to understand how to create conf files, what they do, what are the nodes that you mention, where and how to put the different commands and all that...

If you really want to decentralise mining, you will need to come up with a solution and with proper analytical instructions that one can easily read and understand when they download their qt wallet. It should be as simple as with a click of a button. The user should be able with one click to choose between the different mining options available...

If you guys manage to make simple the process of mining I can assure you that a lot more people around the world will mine with their pcs whenever they open them... Personally i have been thinking for the last 6 months to buy a new pc and some GPUs in order to mine cryptos but I haven't done so far since I wouldn't know how to use it.. Try to make mining easy for everyone and and then you will be able to decentralise mining for real...And then cryptocurrencies will trully rule the world and people will forget to use fiat currencies..







Offline bytemaster

Re: Lucky Mining Request for Proposals
« Reply #8 on: November 26, 2013, 11:06:52 PM »
Just some thoughts...

I think that the idea of lucky mining in order to decentralise mining is a very good one and will atract a lot of people.

However, the real problem for decentralising mining lies in making more simple the mining procedure for people with limited IT knowledge.
Personally, I want to mine but it is impossible for me to understand how to do this. It requieres a lot of time, which I unfortunatelly don't have, to go around forums and ask for instructions and explanation how to do things. It is very difficult for simple people to understand how to create conf files, what they do, what are the nodes that you mention, where and how to put the different commands and all that...

If you really want to decentralise mining, you will need to come up with a solution and with proper analytical instructions that one can easily read and understand when they download their qt wallet. It should be as simple as with a click of a button. The user should be able with one click to choose between the different mining options available...

If you guys manage to make simple the process of mining I can assure you that a lot more people around the world will mine with their pcs whenever they open them... Personally i have been thinking for the last 6 months to buy a new pc and some GPUs in order to mine cryptos but I haven't done so far since I wouldn't know how to use it.. Try to make mining easy for everyone and and then you will be able to decentralise mining for real...And then cryptocurrencies will trully rule the world and people will forget to use fiat currencies..

I agree mining must be easy which is where we aim to go.
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 jgorham

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Re: Lucky Mining Request for Proposals
« Reply #9 on: November 27, 2013, 04:56:21 AM »
Is it possible to create variable block rewards? People choose pools because they want to reduce variance, and the variance comes from one miner getting 100% of block rewards. Could a coin be designed that awarded, say, 10C to the miner who creates the block, and a proportional share of an additional 10C to all miners on the network based on hash speed?

If so the coin would effectively create a pool with 0 fees which is an attractive alternative.

Offline gnarl

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Re: Lucky Mining Request for Proposals
« Reply #10 on: November 28, 2013, 12:23:18 AM »
I agree mining must be easy which is where we aim to go.

The Megacoin wallet miner is a good example of making it simple enough for the masses. The mining tab shows Stop/Start and shows speed in kh/s, one click and you're off...

I think that wallet is the best looking one out there, it has an updated display with a couple neat features like "Messages from Megacoin" and a sort-able transaction page.

An interface like that would do a lot to differentiate Protoshares & Bitshares from the rest of the market.

 

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