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From: Jeremy <jlrubin@mit.edu>
Date: Tue, 14 Dec 2021 11:50:33 -0800
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To: Bob McElrath <bob_bitcoin@mcelrath.org>,
Bitcoin Protocol Discussion <bitcoin-dev@lists.linuxfoundation.org>
Content-Type: multipart/alternative; boundary="0000000000004a434505d3208145"
Subject: Re: [bitcoin-dev] [Bitcoin Advent Calendar] Decentralized
Coordination Free Mining Pools
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I've received some confused messages that whatever I was replying to didn't
come through, I've reproduced Bob's e-mail below that I was responding to
for context:
*This, quite simply, is not a "pool". A pool is by definition a tool to
reduceprofit variance by miners by collecting "weak blocks" that do not
meet thedifficulty target, so as to get a better statistical measure of
each miner'shashrate, which is used to subdivide profits. These are called
"shares" and areentirely absent here.The only available information here to
decide payouts is the blocks themselves,I do not have any higher statistics
measurement to subdivide payments. If Iexpect to earn 3 blocks within the
window, sometimes I will earn 2 and sometimesI will earn 4. Whether I keep
the entire coinbase in those 2-4 blocks, or I have100 other miners paying
me 1/100 as much 100 times, my payment is the same andmust be proportional
to the number of blocks I mine in the window. My varianceis not
reduced.Further, by making miners pay other miners within the window N,
this results inN^2 payments to miners which otherwise would have had N
coinbase payments. So,this is extremely block-space inefficient for no good
reason. P2Pool had thesame problem and generated giant coinbases which
competed with fee revenue."Congestion control" makes this somewhat worse
since is it is an absoluteincrease in the block space consumed for these
N^2 payments.The only thing this proposal does do is smooth out fee
revenue. While hedging onfee revenue is valuable, this is an extremely
complicated and expensive way togo about it, that simultaneously *reduces*
fee revenue due to all the extrablock space used for miner payouts.*
>
--0000000000004a434505d3208145
Content-Type: text/html; charset="UTF-8"
Content-Transfer-Encoding: quoted-printable
<div dir=3D"ltr"><div dir=3D"ltr"><div class=3D"gmail_default" style=3D"fon=
t-family:arial,helvetica,sans-serif;font-size:small;color:#000000">I've=
received some confused messages that whatever I was replying to didn't=
come through, I've reproduced Bob's e-mail below that I was respon=
ding to for context:</div><div class=3D"gmail_default" style=3D"font-family=
:arial,helvetica,sans-serif;font-size:small;color:#000000"><br></div><div c=
lass=3D"gmail_default" style=3D"font-family:arial,helvetica,sans-serif;font=
-size:small;color:#000000"><i><span style=3D"color:rgb(34,34,34);font-famil=
y:Arial,Helvetica,sans-serif">This, quite simply, is not a "pool"=
. A pool is by definition a tool to reduce</span><br style=3D"color:rgb(34,=
34,34);font-family:Arial,Helvetica,sans-serif"><span style=3D"color:rgb(34,=
34,34);font-family:Arial,Helvetica,sans-serif">profit variance by miners by=
collecting "weak blocks" that do not meet the</span><br style=3D=
"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><span style=3D=
"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">difficulty tar=
get, so as to get a better statistical measure of each miner's</span><b=
r style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><spa=
n style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">hash=
rate, which is used to subdivide profits. These are called "shares&quo=
t; and are</span><br style=3D"color:rgb(34,34,34);font-family:Arial,Helveti=
ca,sans-serif"><span style=3D"color:rgb(34,34,34);font-family:Arial,Helveti=
ca,sans-serif">entirely absent here.</span><br style=3D"color:rgb(34,34,34)=
;font-family:Arial,Helvetica,sans-serif"><br style=3D"color:rgb(34,34,34);f=
ont-family:Arial,Helvetica,sans-serif"><span style=3D"color:rgb(34,34,34);f=
ont-family:Arial,Helvetica,sans-serif">The only available information here =
to decide payouts is the blocks themselves,</span><br style=3D"color:rgb(34=
,34,34);font-family:Arial,Helvetica,sans-serif"><span style=3D"color:rgb(34=
,34,34);font-family:Arial,Helvetica,sans-serif">I do not have any higher st=
atistics measurement to subdivide payments. If I</span><br style=3D"color:r=
gb(34,34,34);font-family:Arial,Helvetica,sans-serif"><span style=3D"color:r=
gb(34,34,34);font-family:Arial,Helvetica,sans-serif">expect to earn 3 block=
s within the window, sometimes I will earn 2 and sometimes</span><br style=
=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><span style=
=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">I will earn=
4. Whether I keep the entire coinbase in those 2-4 blocks, or I have</span=
><br style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><=
span style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">1=
00 other miners paying me 1/100 as much 100 times, my payment is the same a=
nd</span><br style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-=
serif"><span style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-=
serif">must be proportional to the number of blocks I mine in the window.=
=C2=A0 My variance</span><br style=3D"color:rgb(34,34,34);font-family:Arial=
,Helvetica,sans-serif"><span style=3D"color:rgb(34,34,34);font-family:Arial=
,Helvetica,sans-serif">is not reduced.</span><br style=3D"color:rgb(34,34,3=
4);font-family:Arial,Helvetica,sans-serif"><br style=3D"color:rgb(34,34,34)=
;font-family:Arial,Helvetica,sans-serif"><span style=3D"color:rgb(34,34,34)=
;font-family:Arial,Helvetica,sans-serif">Further, by making miners pay othe=
r miners within the window N, this results in</span><br style=3D"color:rgb(=
34,34,34);font-family:Arial,Helvetica,sans-serif"><span style=3D"color:rgb(=
34,34,34);font-family:Arial,Helvetica,sans-serif">N^2 payments to miners wh=
ich otherwise would have had N coinbase payments. So,</span><br style=3D"co=
lor:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><span style=3D"co=
lor:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">this is extremely=
block-space inefficient for no good reason. P2Pool had the</span><br style=
=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><span style=
=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">same proble=
m and generated giant coinbases which competed with fee revenue.</span><br =
style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><span =
style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">"=
Congestion control" makes this somewhat worse since is it is an absolu=
te</span><br style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-=
serif"><span style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-=
serif">increase in the block space consumed for these N^2 payments.</span><=
br style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><br=
style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif"><span=
style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-serif">The o=
nly thing this proposal does do is smooth out fee revenue. While hedging on=
</span><br style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-se=
rif"><span style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica,sans-se=
rif">fee revenue is valuable, this is an extremely complicated and expensiv=
e way to</span><br style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica=
,sans-serif"><span style=3D"color:rgb(34,34,34);font-family:Arial,Helvetica=
,sans-serif">go about it, that simultaneously *reduces* fee revenue due to =
all the extra</span><br style=3D"color:rgb(34,34,34);font-family:Arial,Helv=
etica,sans-serif"><span style=3D"color:rgb(34,34,34);font-family:Arial,Helv=
etica,sans-serif">block space used for miner payouts.</span></i><br></div><=
/div><div class=3D"gmail_quote"><blockquote class=3D"gmail_quote" style=3D"=
margin:0px 0px 0px 0.8ex;border-left-width:1px;border-left-style:solid;bord=
er-left-color:rgb(204,204,204);padding-left:1ex"><div dir=3D"ltr"><div styl=
e=3D"font-family:arial,helvetica,sans-serif;font-size:small;color:rgb(0,0,0=
)"></div></div>
</blockquote></div></div>
--0000000000004a434505d3208145--
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