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Block size adjustment idea - expedience fees + difficulty scaling proportional to block size (+ fee pool) | Natanael | Mar 30 2017
Natanael on Mar 30 2017: I had these following ideas as I was thinking about how to allow larger blocks without incentivizing the creation of excessively large blocks. I don't know how much of this is novel, I'd appreciate if anybody could link to any relevant prior art. I'm making no claims on this, anything novel in here is directly released into public domain. In short, I'm trying to rely on simple but direct incentives to improve the behavior of Bitcoin. Feedback requested. Some simulations requested, see below if you're willing to help. Any questions are welcome. Expedience fees. Softfork compatible. You want to really make sure your transaction gets processed quickly? Transactions could have a second fee type, a specially labeled anyone-can-spend output with an op_return value defining a "best-before" block number and some function describing the decline of the fee value for every future block, such that before block N the miners can claim the full expedience fee + the standard fee (if any), between block N+1 and N+X the miner can claim a reduced expedience fee + standard fee, afterwards only the standard fee. When a transaction is processed late such that not the full expedience fee can be claimed, the remainder of the expedience fee output is returned to the specified address among the inputs/outputs (could be something like in#3 for the address used by the 3rd UTXO input). This would have to be done for all remaining expedience fees within the last transaction in the block, inserted there by the miner. These additional UTXO:s does increase overhead somewhat, but hopefully not by too much. If we're going to modify the transaction syntax eventually, then we could take the chance to design for this to reduce overhead. My current best idea for how to handle returned expedience fees in multiuser transactions (coinjoin, etc) is to donate it to an agreed upon address. For recurring donation addresses (the fee pool included!), this reduces the number of return UTXO:s in the fee processing transaction. The default client policy may be to split the entire fee across an expedience fee and a fee pool donation, where the donation part becomes larger the later the transaction gets processed. This is expected to slow down the average inclusion speed of already delayed transactions, but they remain profitable to include. The dynamics here is simple, a miner is incentivized to process a transaction with an expedience fee before a standard fee of the same value-per-bit in order to not reduce the total value of the available fees of all standing transactions they can process. The longer they wait, the less total fees available. Sidenote: a steady stream of expedience fees reduces the profitability of block withholding attacks (!), at some threshold it should make it entirely unprofitable vs standard mining. This is due to the increased risk of losing valuable expedience fees added after you finished your first block (as the available value will be reduced in your block #2, vs what other miners can claim while still mining on that previous block). (Can somebody verify this with simulations?) Fee pool. Softfork compatible. We want to smooth out fee payments too for the future when the subsidy drops, to prevent deliberate forking to steal fees. We can introduce a designated P2SH anyone-can-spend fee pool address. The miner can never claim the full fees from his block or claim the full amount in the pool, only some percentage of both. The remainder goes back into the pool (this might be done at the end of the same expedience fee processing transaction described above). Anybody can deliberately pay to the pool. The fee pool is intended to act as a "buffer" such that it remains profitable to not try to steal fees but to just mine normally, even during relatively extreme fee value variance (consider the end of a big international shopping weekend). The fee value claimed by the miners between blocks is allowed to vary, but we want to avoid order-of-magnitude size variation (10x). We do however want the effect of expedience fees to have an impact. Perhaps some logarithmic function can smooth it out? Forcing larger fees to be distributed over longer time periods? Block size dependent difficulty scaling. Hardfork required. Larger blocks means greater difficulty - but it doesn't scale linearly, rather a little less than linearly. That means miners can take a penalty in difficulty to claim a greater number of high fee transactions in the same amount of time (effectively increasing "block size bitrate"), increasing their profits. When such profitable fees aren't available, they have to reduce block size. In other words, the users literally pay miners to increase block size (or don't pay, which reduces it). (Sidenote: I am in favor of combining this with the idea of a 32 MB max blocksize (or larger), with softforked scheduled lower size caps (perhaps starting at 4 MB max) that grows according to a schedule. This reduces the risk of rapidly increasing load before we have functional second layer scaling in place.) In order for a miner to profit from adding additional transactions, their fees must exceed the calculated cost of the resulting difficulty penalty to make it worth it to create a larger block. Such loads are expected during international shopping weekends. With only a few available high value transactions the incentive becomes the reverse, to create a smaller block with lower difficulty to faster claim those fees. To keep the average 10 minute block rate and to let this mechanism shift the "block size bitrate" as according to the fee justified block size changes, we set an Expected blocksize value that changes over time, and we change the difficulty target into the Standard difficulty target, where each block must reach a Scaled difficulty target . In terms of math we do something like this: Scaled difficulty = Standard difficulty * f(blocksize), where f would likely be some logarithmic function, and blocksize is defined in terms of units of Expected blocksize (a block 1.5x larger than Expected blocksize gets a value of 1.5). When we retarget the Standard difficulty and Expected blocksize we do this: Standard difficulty = Network hashrate per 10 minutes (approximately same as before, but now we take the Scaled difficulty of the last period's previous blocks into consideration) Standard blocksize = Recent average effective block bitrate = (sum of recent (weighted!) block sizes / length of timeperiod) / number of blocks in a retargeting period. Thus, generating larger blocks drives up the long term standard block bitrate, smaller blocks reduces it, in both cases we strive to average 1 block per 10 minutes. Combining this with expedience fees makes it even more effective; There's always a cutoff for where a miner stops including unprocessed transactions and let the rest remain for the next block. For standard fees, this would result in a fairly static block size and transactions backlog. With expedience fees your transaction can bypass standard fees with same value-per-bit, as explained above, because otherwise the miners reduces the value of their future expected fees. The more people that do this, the greater incentive to not delay transactions and instead increase the blocksize. (Can somebody help with the math here? I want simulations of this.) (Sidenote: I'm in favor of RBF, replace-by-fee. This makes the above work much more smoothly. Anybody relying on the security of unconfirmed transactions for any significant value have to rely on some kind of incentive protected multisignature transaction, including LN type second layer schemes. The other option is just not secure.) If load is low then you can add a high expedience fee to incentivize the creation of a smaller block with your transaction, since difficulty will be reduced for the smaller block. This means the miner has a higher chance of beating the competition. Adding additional lower fee transactions may reduce his average value-per-bit to become less profitable. Miners simply aim to maximize their fees-per-bit, while also paying as little as possible in mining costs. To make this work as intended for those willing to explicitly pay to reduce block size, one could tag such an expedience fee with a maximum allowed blocksize (where the fee will be claimed in such a smaller block if it is the more profitable option), such that it won't be countered by others making more high expedience fees to increase blocksize. Note: I'm not particularly in favor of this idea, just mentioning the possibility. -------------- next part -------------- An HTML attachment was scrubbed... URL: http://lists.linuxfoundation.org/pipermail/bitcoin-dev/attachments/20170330/823b7763/attachment.html original: https://lists.linuxfoundation.org/pipermail/bitcoin-dev/2017-March/013885.html
Mining in a small pool is statistically as profitable as in a big pool, regardless of difficulty increases
I've performed the following simulations in response to http://www.reddit.com/Bitcoin/comments/2828s9/i_own_a_large_mining_operation_ill_explain_why_i/, where it was claimed that exponentially increasing difficulty shifts the advantage towards larger pools. Variance for a smaller pool is bigger: http://imgur.com/PX4WEpT but average earnings are the same: http://imgur.com/d7kUOPu Code: http://pastebin.com/vighJ8MZ Update: there doesn't seem to be that big of a difference in variance for pools of different sizes either: standard deviation for 50% pool, 15% increase, total btc after 4 months = +/- 1.11% std dev for 20% pool, 15% increase, total btc after 4 months = +/- 2.03% std dev for 50% pool, 15% increase, total btc after 36 months = +/- 0.97% std dev for 20% pool, 15% increase, total btc after 36 months = +/- 1.7% Update: as nmgafter pointed out in his comment, this is a simplified model. In practice, larger pools benefit slightly from network latency (regardless of changes in difficulty), and I attempted to estimate this effect in my reply to him:
an 8 second network-wide lag would cause 8/600 = 1.33% orphaned block rate. In turn, assuming all pools are honest and not withholding blocks, this would make the 50% pool mine ~0.4% faster than the 20% pool (0.0133 * (0.5-0.2) = 0.00399)
Update: results with no difficulty increase for comparison: std dev for 50% pool, no increase, total btc after 4 months = +/- 0.79% std dev for 20% pool, no increase, total btc after 4 months = +/- 1.57%
BTCC pretends to have 220 PH/s . However, the total hashrate is 1734 PH/s and they have mined about 10.6% of the blocks over the past 7 days. According to haw many block they found, they have 184 PH/s. On the other hand, with their announced hashrate, they should find 12.7% of the blocks. There are 36PH/s missing, or about 2% of the global hashrate. Over 7 days, variance CANNOT explain such discrepancy. This is especially rich from a pool that describe itself as
BTCC Pool is the most reliable and transparent bitcoin mining pool, offering low fees, guaranteed payments, and detailed statistics. We are also one of the top ranking mining pools worldwide with more than 15 percent of the network's hashing power.
Maybe cointelegraph wants to report about this ? They were happy showing they have no fucking idea about how variance in mining works: http://archive.is/QXMUt Hopefully I do, and there is indeed some pool screwing up seriously. This pool is BTCC.
edit: Apparently I'm wrong about some of the technical details below. The general gist is still the same (p2pool.org is misleading people into thinking that it's something it's now, people on bitcoin are helping them in that "for the good of the community"), but I was wrong about exactly what p2pool is. Read the comments for a long technical discussion on this. I'm not the only one who made this mistake. This shit is confusing. So as you've all read through this ghashing of teeth, p2pool mining is the new savior to the bitconomy. It offers the benefits of pool mining (lower variance and thus higher payout given difficulty increases) while not giving centralized control of the pool to any single actor. However, p2pool his wicked hard to set up. As far as I can tell, it requires actually writing custom code to get most nodes mining on p2pool. So as usual, the perfect technology is done in due to major user experience design flaws; in this case, requiring that users be software engineers. But, as you've also noticed, posts are popping up saying how easy it is to set up p2pool. What gives? Well, p2pool.org is the first google hit for "p2pool". It's a website that explains in simple terms that all you have to do to start mining on p2pool.org is point your miner at their address, just as you would with any other pool. Easy peasy! Fuck you and your "hard to connect" FUD. But did you see the trick? It's hidden right in front of you. P2pool.org is not the same thing as p2pool. It's another centralized mining pool just like any other, except it adopted the name of a decentralized technology! It's as easy to use as a regular pool because it is one Yes, the anonymous titans of SEO who run p2pool.org claim to point their node to the p2pool network, but this just forces another trust issue, the very thing Bitcoin was meant to solve, because they can change that at any time. Is it better than running on ghash? Yes for now, and that's why even those bitcoiners who know better still point to p2pool.org whenever p2pool difficulty comes up. But regardless of their intentions, they're shilling for a scam pool. A pool that purposefully misleads it's users into thinking that it is something that it is not. And that's the beautiful irony of p2pool mining.
P2Pool is a distributed mining pool. First, consider checking out the P2Pool Wiki for the latest information. I think it would help to briefly explain it in terms of differences between p2pool, traditional pools, and solo mining. Solo Mining When you solo mine Myriadcoin, you have control of all aspects of mining. You decide which transactions get included in your block and you decide where the block reward goes (usually you decide to send it to one of your own addresses). However, unless you have a very large mining operation, you'll be highly affected by variance. For example: At a the current difficulty (sha256)(516419), the average time for a 15 GH/s miner to find a block is just over 2 weeks. And it is not uncommon for you to take 3-4x longer than the average occasionally when you are unlucky. As a result, you can go long stretches without earning anything. Traditional Pooled Mining To solve the problem of high variance, the mining pools were created. In a traditional mining pool, many people all agree to combine their mining efforts and split the rewards according to their contributions. A sufficiently large pool may then have enough combined mining power that their average time to find a block may only be a couple hours instead of a couple weeks. As each block is found the block reward is distributed between the pool's miners. Each miner then gets smaller payments more regularly instead of one large 500 myriadcoin payment every few weeks. In a traditional pool, the pool operator sets up a website that miners connect to to receive mining work at a much lower difficulty so that each miner will find a valid solution every few seconds. These easy solutions, or "shares" are counted and rewards are distributed based on the proportion of shares that each miner found using one of several reward schemes. In the traditional pool, the pool operator is the one who decides what transactions go into each block and how the rewards are distributed. Typically, the pool sends all rewards to itself and then pays miners out of the pool's funds periodically. P2Pool P2Pool is sort of a cross between these two worlds. Like solo mining, p2pool miners are creating their own blocks and choosing which transactions go into blocks. Like pooled mining, rewards are shared between everyone who is part of the pool. With p2pool, each miner runs a p2pool node and these nodes form a peer to peer network amongst themselves similar to how crypto's, itself, does. Participants then connect their mining software to their local p2pool node and is given low difficulty work just as with a traditional pool. As each share is found, it is communicated to other miners on the p2pool p2p network so that all nodes are aware of who is contributing to the collective mining effort and in what capacity. Each share also includes the reward transaction that will be used in the event that a share ends up being a valid block. That reward transaction includes directly payments to all of the recent contributors to the p2pool network. So as blocks are found, contributors directly receive their payment just as they would have with solo mining. To ensure that everyone is playing fair, shares are assembled into a share chain in the same way that bitcoin blocks are assembled into a block chain. Each share that someone finds builds on all of the previous shares. All miners that are following the same set of established rules end up creating shares that other miners are willing to include in the share chain. Miners that don't follow the rules end up creating shares that get excluded from the main share chain and so they don't get paid when blocks are found by the other miners. In order to make it practical for nodes to be constantly passing shares around the p2p network, the share difficulty is tuned so that shares are only found 1 every 10 seconds across the entire p2pool network. The result is higher variance than at a traditional pool, but still much less variance than with solo mining. Summary In summary, the benefits over a traditional pool include...
Miners get paid directly and so do not have to trust a pool operator to eventually pay them.
Miners get to choose their own transactions.
There is no single person that has centralized control of the pool that can abuse the power of the combined mining capacity of the pool.
The drawbacks are higher variance than at traditional pools (particularly for small miners), and extra complexity in initial setup because miners have to install myriadcoin wallet instead of sending straight to exchange
I didn't really start a clothing line per-say, at least not in the typical fashion. It all started with these 4chan shirt mockup threads and people wanting them. So, I made a survey to see which ones people wanted and the rest is history at this point.
I also plan to continue growing this as a platform to submit shirt concepts rather than just retail.
I would suggest coming up wth a concept, approaching whatever your market is with that, and see what the interest is. If you can get 1000 responses, then you may have something. I would also suggest not spending any money until you have to. I had made $10k before having an LLC or any expenses really. We designed the original website from scratch and it sucked.
USPS gives you free supplies to send priority mail. Order that shiz.
Buy polymailer bags.
Think twice before accepting most international. There are rules and special shipping stuff that applies to it. I had to learn all that the hard way. I was a shipping noob and opened to all countries from day 1.
Shopify + Shipstation (synced) is God mode.
Don't listen to your manufacturer. Find the way you want to create shirts and the materials yourself. If I listened to him, I wouldn't have the repeat business I have or happy customers... he wanted me to print on shit shirts he was used to.
Always be kind, reward, and be positive with the manufacturer. At least for me.. we're constantly racing to get orders out, and I may be upset with a ton of defect products or something. There is a way to commend someone on their hard work while also moving forward on getting problems solved.
I'm sure I could go on. A lot of that advice is operations-based.
EDIT: 7. Be organized ahead of most else. I've invested a lot of time and money to make things better organized. It's worth it.
It was mostly operational finance. Lots of custom model building and reporting on specific time periods like Quarterly. We reported directly to the CFO which is cool. I enjoyed the finance job a lot, it just wasn't for me. Casino finance is all-encompassing. I'm pretty confident I coudl start a bar, restaurant, pool, arcade, theater, maybe a gaming hall, etc.
The hours and my skillset wasn't being utilized. I don't like wearing a suit everyday. I, again, disliked the hours. I work more now but it's a lot more interesting. Hate is a strong word, I know I used it, but that job formed a lot of really important skills that I now possess.
I'm not a manufacturer myself but I can speak on local manufacturers. A lot of them don't know how to price their stuff. Even mine also makes probably the best jerseys I've ever seen for local leagues and he doesn't charge them anywhere near what he should.
If I had listened to what others told me when I started without doing ym own research into fabrics and brands, then I wouldn't have as many repeat customers as I do.
Also price will vary a lot with what type of printing they're doing. If it's sublimation - the cost is higher compared to silk screening but silk screening has minimum order requirements.
The best answer I guess is to do some research, know what printing method you want and potentially the shirt blank itself unless you want it cut and sewn custom. Then you'll cut out the variances in how they'd do it and have a better baseline price.
I never wanted to be in apparel actually. While working the corporate finance job, I was constantly doing startups. My previous was a bitcoin company that couldn't land funding.
I don't really tell people what I do and I don't go out much anymore. I've seen some people wearing our shirts out now and I just tell them I've seen it and ask to take a pic. I've stayed completely anon about this for the most part - which I prefer since I can do this without any personal agenda.
So - mostly I tell people I started a company that is doing well and I am anonymous about it. I'll maybe say it's a user-submitted design website. All of our designs are submitted, voted, and then I license what I can and create the actual designs that we sell.
I have both a licensing professional I work with and a local entrepreneur that has been licensing major brands for 20+ years. He's kinda taken me under his wing which is exciting.
There is a book I have with all of the relevant licensing contact information I could ever need. It's given out to specific people at some convention but I got it from that guy I mentioned. If something has no trace-able OP or is created anonymously, then it is generally public domain at that point. While we source and vote images, I constantly get incontact with the artists.
If something has an OP on reddit, I contact them and wait. I have several designs like that up. I also recreate a lot of them. Blowing up pictures from the internet doesn't work on shirts, so I have to do a lot of deisgn work.
Famous people / musicians I mostly just don't have on the website right now. I'm talking to Lil B and Xzibit and stuff though.
Copyright is mostly just a business proposition, so it's different basically every time. Unlike most of my competitors it seems... I do this legit as possible. I don't even want cease and desists, that shit gives me anxiety. So It's a pain in the ass but I get the licenses I need, give the money out from it, and sleep well at night. That was a personal decision I made early on and artists thank me for it when I talk to them.
It's okay. The China news hit and the ups-and-downs constantly effected investors. At the end of the day though - I had a lot of professional experience in the industry it was and investors just didn't seem to invest in anything that used bitcoin over buy/sell them.
Everything is sourced to an ecompassing and reasonable extent, which also holds up in court. I wouldn't be afraid of a lawsuit, if anything I'd get a cease and desist, which I haven't becuase I'm careful. I also recreate a ton of the images by the time they hit the shirts. A majority of our shirts are using licensed pictures I either have agreements for or buy outright online.
For example: The bearstronaut is a mix of public domain NASA picture and a bear head I bought and formed onto it to resemble what was orignally submitted.
Mining pools have become dominant in today's bitcoin mining network, where miners can pool their powers together for reduced variance of block mining and steadier stream of potential income. The higher the hashrate of one individual Bitcoin mining machine, the more bitcoin that machine will mine. The higher the hashrate of the entire Bitcoin network, the more machines there are in total and the more difficult it is to mine Bitcoin. Another way of looking at it, is that hashrate is a measure of how healthy the Bitcoin network is. Imagine that you are solo mining with a single AntMiner S9, with 13TH. It would take about 700 days to find one block at the current difficulty! For most people, thats too much of a gamble. The reward would be pretty significant, but is it worth the wait? Small pools have much more variance than large pools, so payouts will be very inconstant. On average, no, bitcoin mining in a mining pool is not more profitable than bitcoin mining solo. But, in another sense, yes it is. On a long enough timeline, the variance of solo mining should work itself out, and a solo miner should earn at least as much as they would in a mining pool. Bitcoin Pooled Mining (BPM), sometimes referred to as "slush's pool", follows a score-based method. Older shares (from beginning of the round) have lower weight than more recent shares, which reduces the motivation to cheat by switching between pools within a round.
As requested an overview of shares, difficulty and luck. Excuse my appearance as I am still under the weather a bit. More detailed vids to the series coming. Plotting Rig Build: ASRock X399 TAICHI ... Bitcoin MINING POOL EXPLAINED! Bitcoin Explained & BitClub Network Opportunity - EARN Bitcoin DAILY in Bitclub Network mining pool, when you buy into one of ... Agenda: Livestream for how mining pools work. What is a mining pool, how's it work, what is pool luck? What are the various payout types and how do they work? How do we know the pool isn’t cheating? Start trading Bitcoin and cryptocurrency here: http://bit.ly/2Vptr2X Bitcoin mining is the process of updating the ledger of Bitcoin transactions known as th... Bitcoin & Cryptocurrency Mining Pools Explained Best Mining Pools PPS vs PPLNS - Duration: 18:17. VoskCoin 6,118 views. ... How to choose a Bitcoin mining pool - Duration: 6:02. bitcoin master ...