Title: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 14, 2019, 01:48:55 PM Self modded as I don't want people to use terms like you are an idiot and don't have a right to an opinion.
as anyone reading the pools section they know Kano and I are having a war over his use of meni rosenfeld's formula for proper reserve for a pps pool. Kano you and anyone else can feel free to post but not free to call people names. I really want to educate people about using statistical formula correctly not solving them correctly. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 14, 2019, 01:49:23 PM to all feel free to have some popcorn.
this is my final post in the other thread I am opening a different thread. Since Kano says I am an idiot and don't have the right to post in this thread. using meni's formula correctly and solving meni's formula correctly are not the same thing. Kano's solving of the formula and getting 4317.375 is a correct number Kano saying this pool needs that reserve to have a low chance 0.1% of going bankrupt is deceptive. In fact he has even deceived his own self and simply refuses to see or agree to what I am saying. So 1) I don't mine here and won't mine here. 2) I don't believe Kano intentionally acted to deceive anyone. 3) I think he is simply applying the formula blindly. 4) I think he believed I accused him of intentional deception 5) I do not think kano post the solution to the formula to deceive people on purpose https://bitcointalk.org/index.php?topic=5109937.msg49738589#msg49738589 I have new thread My intentions is to show that the formula called be solved correctly and used incorrectly. Not to show kano was trying to fool people into not mining with this pool. I will get back to this later today. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 14, 2019, 01:56:25 PM there will be a lot of cut and paste from paper below
Quote from: https://bitcoil.co.il/pool_analysis.pdf Meni Rosenfeld Analysis of Bitcoin Pooled Mining Reward Systems [...] 2.2 Pay-per-share In the PPS system, the operator is not a passive middleman between the participants coordinating the joint effort to reduce individual variance. Rather, he actively absorbs all of the variance each miner is facing. [...] However, this is the riskiest reward system for the pool operator - to be able to offer zero variance to participants, he must take all the variance himself. [...] If the operator doesn't correctly balance the pool's fee with his financial reserves, the pool has a good chance of eventually going bankrupt. As derived in Appendix C, to keep the bankruptcy probability below... (0.1%) that is my number not meni's the operator should keep a reserve of at least R=B ln (0.1)/2f Quote from: https://bitcoil.co.il/pool_analysis.pdf The required reserves are higher than most people anticipate. Operating such a pool is best left for those who know how to manage their risks responsilby, and miners who appreciate stability should shy away from improperly managed PPS pool which could shut down at any minute. I agree with this in principle as no one want to be waiting for their payment for mining and the pool op has gone broke. the formula has R for reserve B for block (0.1) for bankruptcy risk in the case above. 2 as a constant and f as a fee in this example I will use 12.5 for b 6.9079 as the solve for ln 0.1 2 for the constant and 1% as the fee. so 12.5 x 6.9079 / (2x0.01) 86.34875/0.02 = 4317.4375 is the solve this is not wrong or right it is the solve for the formula when you use 12.5 coins a block and use a 1 % fee and use a 0.1% chance of bankruptcy. I can clearly show that more is needed then this to determine if my pool goes broke or does not go broke. Both miners and pps pool ops could use this guidance. As a miner proof of reserves is more important then the exact of amount of reserve needed. So lets say you want to know what number meni's formula give for a 99.9 % chance of payment in the case of this a pool doing a 1% fee via grabbing tx fees which average out you get 4317.... that is a starting point. to further find a correct reserve number you need to understand meni's formula uses B as block size and the formula does not reflect that B is subject to ½ every 4 years. So the day after the latest ½ ing the B is stable for 4 years The day before the next ½ ing the B is stable for only a day. so the formula when solved does not reflect that it must be used as part of your decision process. next is what is the fee is it a flat % or is it a flat % plus tx fees this is very important to use in your decision making process. if a pool does tx fees only and if they are about 1% of the full block + tx fees you use .01 in the formula if you are 4 years away from the ½ ing the 1% won't change for 4 years if you are 1 day from the ½ ing the 1% won't be true in a day. so 12.5 + .125 = 12.625 the .125 tx fees are close to 1% next ½ ing 6.25 + .125 = 6.375 the .125 tx fees are close to 2% so that 4317 number is subject to a change to 1079.25 at next ½ ing thus the correct number for a pool operator to have if they do a 1% fee is a range of from 4317 to 1079 during this current block size of 12.5 there are more factors for the miner to think if they should use a pool next one if pool size. 1ph pps pool 10ph pps pool 100ph pps pool 1000ph pps pool 10000ph pps pool all pay different amount of coin each day a 1ph pays 0.04148 btc a day a 10 ph pays 0.4148 btc a day a 100ph pays 4.148 btc a day a 1000ph pays 41.48 btc a day a 10,000 ph pays 414.80 btc a day meni does address size matters I will find the quote in a minute Quote from: https://bitcoil.co.il/pool_analysis.pdf [from pg 6] His variance is the same as the solo variance of mining with the capacity of the entire pool (in absolute terms, the variance increases proportionally to the hashrate). So miners must take their time and start with meni's formula then tweak it to get the proper reserve number. you can see above that a 10 ph pool holding back just the tx fees as their fees is only paying 0.4148 btc a day so if they do 4317/0.4148 they could pay for 10,407 days and never have to hit a block for all that time and still not be broke. In fact much longer since they would be multiple ½ ings in that time frame as kanos says 1461 days = 4 years there would be 7 ½ ings so rewards given out would last more then forever and that is with out hitting a block ever. so to assess what the pools reserve needs to be to do 99.9 % safe is not a simple matter even if you pick that large number 4317 to be safe you could be wrong because the pool is a big pps pool say 10,000 ph this pool need to pay 414.8 btc a day that comes to the 4317 being gone in under 11 days if the pool never hit a block in that time frame. So meni's number is the starting point to determine a correct reserve. time left before the next ½ in size of the pool and of course what fees are since if tx fees they have been at high points some time as much as 2 coins a block of 12.5 once you have factored this all in as a miner and let us say you are using a reserve of 250 coins or 140 coins due to pool size being small. you need to see real proof that reserve is there and that pool op is will to lose that number of coins. all of the above applies to established pps pools such as viabtc or new pools. and the lower the fee a pool takes the more likely it is to go bankrupt. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: TheYankeesWin! on February 14, 2019, 05:14:13 PM Phil don't you think you simply made Kano feel attacked when you used the word deception?
He just went back at you and called you an idiot. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 14, 2019, 05:18:51 PM yes it was a poor choice of words on my part.
I now prefer to say the 4317 number was calculated by the formula given by meni r. correctly But needs to be correctly applied based on the caveats I listed in the above posts. If they are not addressed the number is not helpful for a miner or for a pool op. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: HagssFIN on February 14, 2019, 05:49:00 PM I just want to say that it is sad to see you two guys fighting, because you are both great guys and very important contributors in btc and here at btctalk.
Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 14, 2019, 07:03:17 PM I just want to say that it is sad to see you two guys fighting, because you are both great guys and very important contributors in btc and here at btctalk. you are correct. and i did read what I said and it does look like I accused kano of deception. I did not mean it that way . simply meant the applying the formula is more difficult then it appears to be. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: Gervunt93 on February 17, 2019, 10:34:02 PM There is a thing I still don't get.
If any of pools declare to have a 4000+ BTC reserve fund (even 1000+ is enough) with a PPS payout - won't this pool get instantly attacked by miners (or even other pools) to get all of these funds? Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 18, 2019, 02:17:03 PM There is a thing I still don't get. If any of pools declare to have a 4000+ BTC reserve fund (even 1000+ is enough) with a PPS payout - won't this pool get instantly attacked by miners (or even other pools) to get all of these funds? Lets try to explain the reserve. 4000 to 1000 for a 1% fee depending how close you are to the ½ ing and the bigger the pool is the more variance risk it takes on. So pretend someone has a pool that the only fee is the tx fees and is giving all of the 12.5 out. this is roughly 1% fee Suppose they put the 4000 reserve it an escrow handled by coinbase. What would happen. Well any miner with an economic understanding of this would move to the pool. why is that? zero variance risk and the 4000 coin reserve is proven. The pool would grow like mad as the miners simply have to track the size of the pool the luck of the pool to see what happens to the reserve. If the pool is having good luck no worries mine on. If the pool is having bad luck the reserve shrinks very quickly. If all is transparent miners can time the jump from the sinking ship. With almost no risk. Basically it is why I got into the argument with kano about 4000 being not accurate for a 1% pool. Wish I phrased deceptive to "applied in error". The truth is no pool paying pps at 1% fee would survive with any proven reserve. reason is the pool would grow as it would be the best pool to mine at. it would grow to 30 or 40 % of the network. and it would be attacked by anyone with the ability to with hold blocks. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: kano on February 18, 2019, 03:07:38 PM That's not correct.
The point is about limits on the luck - again nothing to do with the size. Nothing to do with losing blocks. It can be a 200PH pool or a 2EH pool. ... That is simply a recipe for disaster.If the pool is having good luck no worries mine on. If the pool is having bad luck the reserve shrinks very quickly. If all is transparent miners can time the jump from the sinking ship. With almost no risk. ... If you want to go down the path of saying that it's OK to have a too small balance thus it's OK for a month coz it's small - well so what? You are just putting people in the position of losing out in a month. You need to look at the history of how this has gone before. As I said in the previous thread, you've not been around for long. Learn from the mistakes of the past (though most people are too stupid to do that) You have some bazaar idea that everyone mining on the pool is going to be able to work out the day that it's gone bust and be able to magically guess in advance when they are going to have a run of bad luck. It wont happen like that. What will happen is the same as every other time before, some people will move on - by luck or by good guessing, others will hang around and keep mining then finally it will all close down and those who stayed around will lose out. Yes just like the altcoin scams - so yeah I guess that's what you are hoping for. Just give up and stop giving people bad advice (and also pretending you said something else ... you do get that what you said is still there ... no one but a fool believes you when you pretend you said something else) Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: DaveF on February 18, 2019, 03:33:16 PM Some other things to think about.
Although it would not change the reserve requirements, frequency of payouts do matter a bit too. Once an hour vs once a day vs once a week etc. i.e how much the pool could wind up owing you if they go broke. If I don't trust you and I only get paid once a week, I'm gone.... Cash / fiat reserves. If I want to start a pool to dominate the mining world and I have a big enough bank account I can do just about anything I want. 105% pay out, no big deal if I don't mind taking a bath buying BTC on the open market. Think venture capitalists throwing money into it. Using the theory of a 10,000 ph paying 415.00 BTC a day at the price of $4k a BTC that is $1,660,000 (using round numbers here for BTC now at $3800 and a 105% payout) So if the pool *never* finds a block in 30 days and I get $50 million USD of venture capital I can still run for a month. How many pools would I kill in the process who saw their hash rate drop to 0. Just my thoughts. -Dave Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 19, 2019, 12:07:08 AM size of pool does matter according to the developer of the reserve formula.
meni says bigger pool = bigger variance risk .. simple enough not to argue with kano about it anymore and once again i did not mean to say you were attempting to mislead people with application of the formula deliberately . facts are very simple here. the formula is a base number subject to multiple linear factors. a 1 ph pool in the case of a 42,000 ph network will lose money slower then a 10 ph pool so at current difficulty 1 ph --------- needs to pay out at 0.04148 btc a day 10 ph --------- needs to pay out at 0.41480 btc a day 100 ph-------- needs to pay out at 4.14800 btc a day 1000 ph------- needs to pay out at 41.48000 btc a day 10000 ph------ needs to pay out at 414.48000 btc a day the formula still reads a reserve of 4000 coins for all of the above but as meni said in his article the larger the pool the more variance risk the pool operator takes on. ie he can lose his reserve of coins faster if he has 20 percent of the network. then is he has 0.01 percent of the network. as day says 1 hour payout 1 day payout 1 week payout matter as does full transparency of the pools hash rate. and of course actual reserve number and who holds it. Sometimes I don't like the internet due to the difficulty one may have in explaining what one means. a flat in the USA ALMOST NEVER MEANS AN APARTMENT. it means your tire has lost its air. Also english can be ambiguous in other ways. I would never mine in a pps pool that only takes the x fees as its fees today. But in 2017 a pps pool doing that was pretty safe from going bankrupt because tx fees were about 1.4 btc so 1.4/13.9 = about a 10% fee. Lots of miners out there but take a 1ph guy that has paid up s9i's set at 80 watts a th. if he has 6 cent power and mines at a tx fee pool only he earns a about 49.78 usd a day in btc. this pool charging only tx fee and paying the 12.5 btc every day looks very good to that miner. so he want to know what chance do I have of the pool tapping out. he plugs in the formula and gets 4000 coins and says to himself damn no pool op will hold that much and moves on. A miner that under stands game theory says if I mine here and get paid 49.78 a day and if I was mining at viabtc getting only 48.2866 a day I gain $1.49 a day if he goes broke since he pays daily I lose what I would have got at viabtc 48.2866 so I need to hope that this pool sticks around for 48.2866/1.49 = 32.4 days and if I do I win. the reserve need for a terrible losing streak causing the pool the quit in under 33 days is what? depends on pool size 1ph or 10ph size pool he may stick around even with a small reserve. 10,000 ph pool that big reserve is needed. AS A miner that now is doing multiple joint ventures in solar arrays I can't take excess risk. I have buysolar myself on one venture I have buysolar myself a warehouse owner his son on another venture. we are soon to do another solar array joint venture. So pps pools must be what I do. with most of the hash power . I won't use a tx fee only pool as I believe it will fail with the current rate a tx fee pool really is 1% lots of reasons for me to not mine on one and mine on a pool like viabtc.com via pps as for 5n I mine some private hash on ckpool I also mine on mmpool using a system design by meni rosenfeld. but that hash is trivial and is exclusively mine. As much as I want all of the hash I manage on a pool using 5n I can't and I must decide which pps pool works for my multiple partners. if you look at viabtc they are 3% + tx fee or about 4% they pay daily so I simply do not fear bankruptcy and just look towards steady payments. In hard times like now I put some of the profit to regular pools here I am on mmpool http://mmpool.org/statistics Estimated Payout Rank Id DGM Estimate PPS Shares Rate (MHash/s) 1 06ae84f6 3.55057111 0.00000000 1,171,509,380,517 0 2 2d0ba29d 0.51050521 0.00000000 130,638,721,300 117,281 3 a5d78fff 5.73805197 0.00000000 130,161,014,576 0 4 b0d22e5b 0.37382912 0.00000000 121,152,709,055 0 5 c932f3ed 0.37382913 0.00000000 90,817,204,703 0 6 71602a00 0.37382912 0.00000000 45,557,299,863 0 7 c03a6b93 0.09342429 0.00000000 32,332,000,000 0 8 67076efc 0.15285052 0.00000000 26,758,862,431 0 9 a60330ba 0.05375181 0.00000000 19,990,766,359 0 10 49ecce78 0.09328962 0.00000000 17,375,959,894 0 11 eb4a7fcb 0.05036050 0.00000000 15,152,643,537 0 12 d7ec4cdf 0.07419160 0.00000000 14,289,498,257 0 13 dad84f7a 0.07854794 0.00000000 13,424,228,895 0 14 1fa7a7f0 0.06336479 0.00000000 11,609,886,265 0 15 d17ab73b 0.03541869 0.00000000 10,567,830,845 0 16 8f21a6e7 0.05854443 0.00000000 10,125,655,014 0 17 29501a4c 0.01845540 0.00000000 5,369,606,803 31,254,156 18 b14f3c1d 0.01281848 0.00000000 4,414,315,691 0 Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: TheYankeesWin! on February 19, 2019, 12:24:48 AM Some other things to think about. Although it would not change the reserve requirements, frequency of payouts do matter a bit too. Once an hour vs once a day vs once a week etc. i.e how much the pool could wind up owing you if they go broke. If I don't trust you and I only get paid once a week, I'm gone.... Cash / fiat reserves. If I want to start a pool to dominate the mining world and I have a big enough bank account I can do just about anything I want. 105% pay out, no big deal if I don't mind taking a bath buying BTC on the open market. Think venture capitalists throwing money into it. Using the theory of a 10,000 ph paying 415.00 BTC a day at the price of $4k a BTC that is $1,660,000 (using round numbers here for BTC now at $3800 and a 105% payout) So if the pool *never* finds a block in 30 days and I get $50 million USD of venture capital I can still run for a month. How many pools would I kill in the process who saw their hash rate drop to 0. Just my thoughts. -Dave This is the best reason not to mine on a pps pool that is over paying. Better then Phil or Kano Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on February 19, 2019, 12:27:08 AM This is the best reason not to mine on a pps pool that is over paying. Better then Phil or Kano I gave this a few merits and with this idea by DaveF I will close the thread as it is a better reason than any that I gave ;D Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on April 25, 2019, 05:04:18 PM DaveF asked me to open this thread. In a pm
Looking back at this thread: https://bitcointalk.org/index.php?topic=5109937.0 We were talking about something similar at lunch. Came up with the wall of text below. I don't know if you want to unlock the thread and have me post it, or copy & paste and you post it or leave it locked and let it just sit out there as is. -Dave he will be posting his refined idea soon. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: DaveF on April 25, 2019, 05:16:21 PM Taking this to the limit.
6 blocks an hour * 24 hours in a day * 12.5 coins per block = 1800 BTC generated per day. 1800 * 5500 (USD value of BTC at the moment) = 9,900,000 USD Lets round that up to 10,000,000. Let’s give everyone a 10% bonus so 11 Million USD a day in our PPS pool in outgoing BTC. Let’s do this for the 3rd quarter so 90 days. That is $990 million USD. Just shy of 1 Billion USD out of pocket if this killer pool mines 0 blocks and has to buy all the BTC that they are giving out. Since it’s a PPS pool that they control, they can point the hash to ANY SHA coin. Kiss every SHA256 coin that is not BTC goodbye. Then they point it back to BTC for 2 or 3 difficulty increases. And then in the end they point the hash rate nowhere. And the block chain comes to a crashing halt. Are you seriously going to mine at CKpool or Slush or P2Pool when it’s going to take forever to find a block because difficulty spiked because with an extra 10% marginal hardware gets turned back on? And just about everyone else is mining here? Or are you going to mine here with the rest and get your extra 10% all day every day? And then they shut off and go away. How long will it take us to recover? Who would do this? I don’t know. Do you think if I went to Chase / Bank Of America / HSBC / CitiBank / Western Union / Wells Fargo and said “Hey, each of you cough up $175 million and I’ll set Bitcoin / crypto back 5+ years.” They would ask how or just write me a check? It's also petty cash for just about any government. Even after the divorce settlement Bezos probably still has it in cash in his safe at home. -Dave Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on April 25, 2019, 06:15:46 PM I will leave this open for a bit as I think Dave F. has discovered a weakness with this idea.
I want to give him some credit for this ideas are welcome. I do have one idea if this attack was done it would appear bitmain would be best suited to defend btc from this kind of attack. then the other top asic builders would be next choice to fight this kind of attack. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: kano on April 25, 2019, 10:59:15 PM [...] While that all being off topic ... ... ... you do realise don't you that most of mining on the large pools will never change away to another pool? They are mostly either clients locked into mining on those pools, or are the pool owners mining on those pools. Title: Re: PPS pools what is proper reserve number for a pps pool? Post by: philipma1957 on April 26, 2019, 02:27:51 AM While that all being off topic ... ... ... you do realise don't you that most of mining on the large pools will never change away to another pool? They are mostly either clients locked into mining on those pools, or are the pool owners mining on those pools. yep which is why bitmain would need to be the greatest defender of BTC if the attack occurs. Not liking that very much at all. Sometimes an argument over point a being right or wrong can lead to point b or point c. If this attack occurs and bitmain chooses to support BCH and not BTC we could see a big shift in this game. In fact it seems pretty easy to do maybe 90 days of work at it and cost would not be that high. I don't want to start another thread as this thread was closed more then a month ago. I opened it as a direct request from Dave. With this I will close the thread and thank Dave for further expanding points B and C I would also like to thank Kano for expanding on point C. point B the attack could be done point C the defenders of would be mostly asic builders/farmers point D bitmain could switch sides and move to BCH. I will lock this again and if someone wants to start a thread about these ideas which sprung from Kano and I arguing about Meni's Formula and the proper application of it when it came to this pool. Please feel free to do it as it is more of a speculation thread. |