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<div class="moz-cite-prefix">On 6/19/2014 12:58 PM, Sergio Lerner
wrote:<br>
</div>
<blockquote cite="mid:53A316BE.5040508@certimix.com" type="cite">
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<p>I propose a setting that prevent mining pools AND reduce payoff
variance which requires two changes: increasing the block-rate
and changing the Bitcoin PoW (but still allowing current Bitcoin
ASICs to work (as far as I know)). The block rate must be
increased at least 20 times and block must still be near full
(e.g. there must be at least 20 more transactions/second than
there is today)<br>
</p>
<p>BlockPow is kind of PoW that only practically prevents mining
pools for certain cryptocurrency settings based on concepts
similar to parmacoin, but in a much simple degree. The idea is
that if miners try to join a pool, then they incur in overhead
of transmitting information and earn less than working solo. Let
b (the payload) contain a full block. b must contain all the
transactions and the header, and not only the transaction
hashes. b should not hide anything. Let h be the block header
(which contains the previous block hash and the Merkle tree root
of the transactions). Let d be the difficulty.
hash-block-length(b) returns the number of blocks processed by
the hash function when fed with the block b. The target is
divided by hash-block-length(b) so that the difficulty does not
depend on the length of the block. Some other function can be
used to encourage nodes to add more or less transactions.</p>
<p><span data-mce-style="text-decoration: underline;">Def</span>:
Basic BlockPoW concept<br>
</p>
<p>For each r in the nonce-range: if H ( H( r || b ) || h || r) )
< 2^-d/ hash-block-length(b) then return r</p>
<p>return null</p>
<p>The header (h) is appended to the hashed message to allow SPV
clients to verify the PoW without requiring the full block to be
downloaded. Peers can send only (x,r,h) to SPV nodes, where x =
H( r || b ), so they can verify the PoW. The verification
procedure is obvious, and is skipped here. r is inserted at the
beginning of the message to prevent pool administrators from
keeping a secret mid-state of the hash function secret in order
to prevent block stealing and also to force the miner to know b
in the inner mining loop.</p>
<p>So now mining requires the knowledge of the block b to be
mined, and b must be received at each block-chain epoch. This
could create an incentive not to include any transaction and use
an almost empty b, because that way the bandwidth requirements
is decreased. But this incentive should not exists normally,
since by including transactions the solo miner gets an
additional revenue from fees, which is lost if the block is
empty. Anyway, to prevent this possible incentive we can append
to b a subset of previous blocks (e.g 100 blocks). The block
subset to include could be derived from a peudo-random function
seeded by the previous block hash. Then a node would still need
to download part or all the block-chain in order to mine.</p>
<p>Now if the miner wants to be a dumb node and take part of a
pool, then the current working unsolved block (the template)
must be sent each time from the pool admin to each miner. If the
pool admin hosts 1000 miners, then to serve them with fresh
block templates he needs 1000 times more bandwidth that the
miners, making this much more expensive. If miners create
another network topology to distribute templates, they are
incurring in the same overhead as being actively part of the
cryptocurrency network, so they gain nothing.</p>
<p>For example, in a block-chain with a 5 seconds block-rate, such
as in <a moz-do-not-send="true" href="http://nimbleCoin.org"
data-mce-href="http://nimbleCoin.org">NimbleCoin</a>, each
block can be as large as 200 Kbytes (100 tps are allowed). A
miner will require the block template to be ready as fast as
possible, say before 3 seconds, so as not to loose more than 60%
of the times the transaction fees present in the block template.
This means that a pool admin serving 1000 clients must have a
upload bandwidth of at least 60 Mbytes/sec, and load balance
servers, because all miners will demand the block template at
the same time and will compete for it.</p>
<p>The same miner, working solo, will not loose the 60% of block
fees. If block fees are 10% of block reward, then solo miners
earn 6% more than pool miners. Also, having a block rate of 5
seconds allows solo miners to receive payments more often and so
it reduces the payment variance.</p>
<p>This method to discourage mining pools only work as long as
time is takes to transmit a block is comparable to the block
interval time, e.g. 20%. This seems not to be a problem since if
the cryptocurrency becomes popular, then we can expect blocks to
be near full, while if is is not, then nobody will care about
mining pools.</p>
<p>For this method to work for Bitcoin, Bitcoin should reduce the
block rate to at least 1 minute, and keep blocks of at least 10
Mbytes. Or go the NimbleCoin way, and reduce the block interval
to 5 seconds. The sole reduction of the block rate from 10
minutes to 5 seconds would reduce notably the mining reward
variance, which is the main reason miners don't mine solo.<br>
</p>
<p>BitcoinBlockPow<br>
</p>
<p>The basic BlockPoW is incompatible with Bitcoin ASICs as is but
it can be made partially compatible with some tweaks: The value
b is replaced by a a a subset or an integrity check of the
block.</p>
<p>Using a subset: <br>
</p>
<p>First the hashMerkleRoot and hashPrevBlock fields are replaced
by the fields: ChildBlock (32 bytes) and ScatteredBlockBytes (32
bytes). ChildBlock is the hash of a message with stores the old
hashMerkleRoot and hashPrevBlock. ScatteredBlockBytes is a
pseudo-random subset of bytes taken from the block template
being mined. The seed for the pseudo-random function that
selects the subset is the hashMerkleRoot plus the block time.
When a miner scans all the 32bit nonce space, then a new
hashMerkleRoot must be created to increase the extra-nonce field
or the time must be updated. When this happens, a new subset of
pseudo-random 32 block bytes must be collected. If the miner
only stores 10% of the block template (e.g. 100 Kbytes instead
of 1 Mbyte), then the probability he can build the
ScatteredBlockBytes by brute-forcing the seed is 10^-32. If the
miner performs 100 GH/sec, then the 32-bit nonce will overflow
every 20 msec and the miner could request the
ScatteredBlockBytes from the pool admin using a bandwidth of 1
Kbyte/s. A pool hosting 6 PH/sec (such as Eligious, which has
8%) would need to stream more than 60 Mb/s of
ScatteredBlockBytes fields. A mining pool having 50% would need
to stream 500 Mb/s, which is quite challenging. So miners will
download the block normally, and become active part of the
network.<br>
</p>
<p>Using an integrity check:<br>
</p>
<p>ScatteredBlockBytes is replaced by a field BlockHash defined
as H( full-block-with-zero-nonce ). Obviously the header must be
at the beginning of the block to force the re-hash.<br>
</p>
<p>Best regards,<br>
Sergio.<br>
</p>
<br>
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</blockquote>
Why do you want to punish pools?<br>
<br>
<br>
<pre class="moz-signature" cols="72">--
Kevin
</pre>
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