And where did you get these 40 LTC? Whether you got them from a mining pool or somewhere else, you got them in several separate payments. These payments need to be combined.

Presumably LWPf3ztftYMsj8bwXNAbX6n2C22atvB7Eo is the address you use to withdraw from your mining pool. Each time that you receive a payment from the pool is a separate output, they are not combined automatically. They are only combined when you use some of them for a transaction, which is exactly what happens in the linked transaction - it combines several outputs into one bigger output.

I like to think of it as a capacitor. If you have a light bulb and capacitor in parallel connected to a DC source, the bulb won't be lit right away. As the capacitor charges more current is routed through the bulb and it becomes brighter, until it reaches its maximum brightness as if there was no capacitor. If the power source is disconnected, the bulb gradually fades as the capacitor discharges its stored energy through the bulb. No energy is lost.

Of course there are many other real-life examples of this dynamic. Electric radiative space heaters come to mind - you turn them on and only after a while they become hot and heat the room. The dynamic is the same also quantitatively - in all 3 cases it can be modeled with (dx / dt) = a - bx, where a becomes 0 when the source is discontinued, and where x is itself the derivative of some quantity of interest.

This comment confused me until I realized you meant that you stop mining and resume sometime later.

Can you link to a discussion of using contracts for this? Does this application solve the problem of the counterparty keeping logs and releasing information? Or do you simply mean a transaction with 2 inputs and 2 outputs so neither party can steal the money? Maybe OpenTransactions can do something about the anonymity.

For reference, This is the post ripper234 had in mind.


The first problem is that video footage of the server doesn't give any information about what it is doing internally. (Then again, as I recall, immersing a computer chip in ketchup and putting it in the microwave does reveal information on internal state, so you never know.)

You can only lose money if you make a blunder on your end, you're not at the mercy of other nodes in this regard.

By "fair reward" I mean pB per share, where p = 1/difficulty at the time the share was submitted and B is the block reward at the time the share was submitted. This is what you'd get with PPS (disregarding fees).

If you use a mining reward calculator to find what you'll get per day for mining with your hashrate, then for mining 18 hours per day you'll get on average exactly 3/4 of that amount - the reward is proportional to the work you put in. If you mine for a minute a day you'll get on average 1/1440 (1440 minutes in a day) of what you'd get for mining the whole day with the same hashrate, though your variance will be high (though not nearly as high as with high-variance methods like Geometric).

This indicates a misunderstanding of how these methods work. DGM doesn't care at all when you started or stopped mining. It doesn't try to detect hoppers and punish them. It rewards each share separately, in a way that is independent of the past and thus does not offer any incentive to hop.

Correct.

I think you'll find that my interpretation of "fair" as described above is reasonable.

On average you get exactly your fair reward, with a relatively low variance.

Proportional isn't the only bad method.

There are other methods than proportional and PPS, you know. I don't think you understand how bad proportional is. You can use PPLNS for example.

Cool. Good luck.

Miners are the customers of a pool. Running an honest business means maximizing your profits under the constraint that you do not deliberately mislead your customers - which is exactly what you're doing when you do merged mining when turned off by the miner, unless you've gone to some efforts to clarify this is what you do.

If someone thinks he can increase his profits by running a dishonest business, I can only argue with him on ethical grounds, not socio-economical.

This is kind of moot because optimally you do it with as many pools as possible. You distribute your hashing power among all available pools, and whenever you find a block in one you direct all hashrate to it. In AoBPMRS I only analyzed the case that all pools have the same hashrate, but I have reasons to believe that you need to distribute your hashrate in proportion to each pool's size.

If 10% of the reward is subject to full solo variance, it means the total variance is about (10%)^2 = 1% of solo variance, which is a lot. Let's say you have 500 MH/s, then it will be like mining for a normal pool with 50 GH/s. If you've mined in such a pool lately you know that its variance leaves a lot to be desired, especially for someone who went with PPS because he wants no variance.

With the protocol modification I proposed here. This is also discussed in subsection "6.2.3 Proposed solution - Oblivious shares" of AoBPMRS.

The extent to which they can be separated is very small for the purpose of evaluating the OP's core idea. Fiat currency is very liquid and has more or less steady purchasing power, so it just simplifies the discussion to talk about exchange rates and I don't think it takes away anything meaningful.

This is a terrible way. It greatly increases the reward variance for miners thus defeating the purpose of the pool. An attacker who is bent on destroying a pool will not be fazed by a 1% reduction.

The best way to solve block withholding is oblivious shares.

This can work but it's sort of a band-aid solution, there are many potential problems.

The payments are delayed, but broadcasting the block to the network is not.

This is a myth I wish would have been rooted already.

"X is backed by Y" means there is a guarantee that you can hand over X and receive a specified amount of Y. In the "electricity / hardware power" this is reversed - a mining rig can transform electricity to bitcoins, not the other way around. If someone finds a machine that can convert bitcoins to electricity, let me know. Also, the conversion ratio isn't fixed.

"Math / proof of work" only guarantee that a bitcoin is a bitcoin, it doesn't guarantee that it has any sort of value. To be of value, Bitcoin needs both the math to protect it from loss, theft, inflation, counterfeit and double-spending, and the people offering goods, services and other currencies for it and believing in its long-term prospects. If you take just the first without the second you get something worthless (see also testnet bitcoins).


Now for the OP... Even if you could somehow make it scale, attempts to put a floor on the exchange rate can backfire due to anchoring effects. Suppose "The Bitcoin Floor Company" enters into a legally binding agreement to always offer $0.01 per bitcoin. This only requires a $210K reserve and presumably is a net positive - people will be guaranteed that no matter what happens, a bitcoin will always be worth at least $0.01. But when people will try to form an opinion on what a bitcoin really is worth, they'll think (whether consciously or subconsciously) "Well, this company backs bitcoins by $0.01, so I guess they're worth just a little bit above that". This can cause a decrease in its valuation.

This is just inane. First he spams his pool everywhere saying he deliberately wants to be hopped. Then he switches to PPLNS?

Either your hashrate is 1GH/s, in which case 5567 KH/s is indeed near 0, or you're mining on a CPU at 1MH/s, in which case the stats are indeed weird.

I wonder if it will be easier to do some approximation of DGM with PSJ. I haven't figured out the details but shift-DGM should work, and might be possible depending on what you have to work with.

Great news!

It's too bad about PayPal, I still think the ability to easily sell bitcoins for PayPal is crucial for Bitcoin's growth. I hope that even so there will be people who benefit from your service and that you'll make some profit from it as well.

Any idea about the friendliness of Amazon payments to Bitcoin exchange?

Both are correct. "Donor" is much more common, it always bothered me that the word "donator" was chosen here instead.

No, a proper PPS pool has a reserve and pays out of it. If the pool shuts down for any reason (bankruptcy included) it still pays for the work already done.