I don't think there's a "line", there are various courses of action each with its own degree of "unethicalness". But I think that if you start mining for a pool with the intention of obtaining payouts in proportion to the contribution, and then for whatever reason you decide the pool is not for you, you're free to go. The problem starts when the reason you joined the pool in the first place is to obtain a payout greater than your contribution. Clearly if you use hopping software to hop dozens of times a day then this is your intention.

As for the namecoin hopping, a major difference is the lack of a reference "fair" reward. For pooled mining as a phenomenon in the larger Bitcoin mining world, it is clear that the fair payout per share is pB, and that any amount above it is freeloading (remembering that every share submitted to a pool ultimately translates to increased security of the Bitcoin network). But Namecoin and Bitcoin between them are not part of a larger context which defines what the fair payout is. Furthermore, a decrease in a blockchain's difficulty generally means that its security is lesser now, and hence adding capacity to it is more beneficial. So it is acceptable for market forces to drive capacity to where it's most valuable.

...While creating value. Buying Bitcoins leaves the other party with dollars which he finds more valuable than Bitcoins, and buying mining rigs increases Bitcoin's security.

It relies on taking advantage of people who don't know any better. But as I said it's not black and white, and hopping is acceptable if it is accompanied by genuine attempts to educate the public.

You always mine for the pool with the lowest number of shares in the current round. If all pools have >43.5%*difficulty you mine in a fair pool or solo. This is all done automatically of course, using something like the python pool hopping proxy.

If deepbit is half the network, average round length is 20 minutes. So when a round starts (if a block is found from an unknown source, it's probably deepbit), you stick around for 8 minutes which is plenty.

You don't hop one pool, you hop between all proportional pools simultaneously.

Those who earn x2 or so of the normal income will disagree that it's irrelevant.

1. Because you want to be a part of an incredible new technology that could change the world.
2. Because you want to utilize your existing resources to receive a source of income.

It shouldn't slow down your internet at all, the bandwidth needed for pooled mining is negligible.

If you count all shares across different rounds together, then this is definitely what's happening, you get 40 x (your shares/total shares) while the hopper gets 60 x (his shares/total shares)

And with the expectation that this arrangement will lead to the same ratio when calculated for pool work in total, not just within rounds. Just because people are ignorant and don't understand that you're scamming them doesn't mean it's ok.

"Aligned interests" means your interests (of obtaining a steady income, say) are aligned with those of others (that is, there are scenarios where the satisfaction of everyone's interests are improved). It has nothing to do with altruism.

Your peers in the pool are your business partners, you've entered a mutually beneficial agreement to reduce everyone's variance. By hopping you are defrauding your partners of their due reward.

This is exactly the sort of thing I was talking about. This guy is ignorant about the consequences of pool-hopping, and we should educate him, not take advantage of him. But I agree that we've tried talking and it didn't work, so it's the time to educate by action.

This is (the reverse of) the gambler's fallacy. Unless there's something wrong with how a pool is run, a track record of longer than expected blocks has no bearing whatsoever on the length of future rounds.

You're wrong, but thanks for proving my point about the existing confusion.

Tell me this. Let's say the proportional pool has (2*difficulty) shares in the current round. If you mine for it now, then no matter what happens, you will get less than (Block reward)/(2*difficulty) per share you submit. So why do it instead of, say, a PPS pool which gives you (Block reward)/(1.1*difficulty) per share you submit?

If you're 1% of the pool, you'll always get on average 1% of the reward of every block, which is 0.5 BTC. But if a block took longer, it means you got 0.5BTC for a longer period of mining, so it's less per unit of time.

Difficulty only changes once every 2016 blocks. But finding blocks is random so some times it takes longer than others.

Did you mean Proportional instead of PPS?

You're misunderstanding how hopping-proof methods work. They don't encourage anyone to stick out a long round. They just give the same average payout for future shares without regard to the past. So in a long round, the PPLNS part will give normal payment while the proportional part will give less than normal, so the total will be less than normal and a hopper will hop.

Hybrid schemes are possible but they tend to have the disadvantages of both components, plus the complexity disadvantage, without much of their respective advantages.

And, it is a myth that PPLNS has some horrible disadvantage for intermittent miners. They have the same expectation with only a slight increase in variance.

Proportional. PPS is something else entirely.

So it's not like Poker at all. You can still play poker if everyone knows the odds, you can't mine in prop if everyone hops.

This is of course false, given that
1. *MPPS does not fit the goal.
2. Other systems such as PPLNS and the geometric method fit the goal.

Your mistake is assuming that the goal of a pool is to reward each share with the statistical average, exactly.

The real goal of a pool is, however, to reward each share with the statistical average, on average (while reducing variance as much as possible). On the one hand you have PPS, which is 0 variance for the miner (with maximal risk to the operator); on the other hand, solo mining which has the highest variance; and a variety of methods in between.

PS. If MPPS is what I think it is, then it is just as bad as the *SMPPS.

Pooled mining is an agreement among miners to jointly work on finding blocks and splitting the rewards in proportion to the contribution of each, with the pool operator as middleman. Pool-hopping is an attempt to gain more than the fair share of a pool's rewards for the work done, breaching the agreement, and as such is unethical.

The claim that "people were warned and still mine for proportional pools, so they consent to it" is understandable, but problematic because:
1. Not everyone reads the forum. I wouldn't be surprised if most of the users of Deepbit have never looked at its forum thread. You are taking advantage of those users who don't know any better.
2. Pool-hopping is hard enough to understand as it is. I think there is virtually nobody who has commented about the statistical properties of mining and isn't guilty of having made an error at some point. Add to it the people who actively deny that it works or is harmful to honest miners (rarer these days) and the FUD against hopping-proof methods, and an average miner doesn't know if to believe Random Internet User A or Random Internet User B. It is clear that anyone would avoid proportional pools if he had a good understanding of pool-hopping and the alternatives, so staying with the pool should not be seen as consent to pool-hopping.

However.

It is clear that the real problem is not with the hoppers, but with the pool operators who allow this to happen and deceive their customers. Abstaining from hopping will not solve the problem, as there will always be those won't even be bothered by the question of whether this is ethical, and silently eat at the due rewards of miners.

The only way to expose the corrupt proportional pools for what they really are is to openly mount a massive pool-hopping attack, demonstrating a statistically significant drop in the payouts of honest miners. One would hope that this will create an outcry leaving operators with no other choice than to back down and adopt an unbroken scoring method (such as PPLNS). To the extent that openly pool-hopping helps bring about this brighter future, I would say that it is acceptable.

You are correct. This is a fundamental problem with all *MPPS pools. When the balance is negative, miners know that their payment has a good chance to be delayed. It doesn't matter if the pool pays recent first (RSMPPS), strives for equal payment for all shares (ESMPPS) or pays all unsaturated shares every round (SMPPS). And, since this should quickly cause the collapse of the pool, "delayed" really means "gone forever".

You're right, actually I didn't think a lot about solution to this problem, I was focusing on preventing double-spending. In any case I think solving this will be easier if we solve double-spending via other means.

If you need to receive a large transfer from someone, you know that it may be profitable for him to mount a >50% attack in other to double-spend it, so you need some sort of guarantee that the transaction is secure before you accept it.

When you receive a smaller transfer it is much less likely that the sender will be willing or able to double-spend it, and much less risky if he does.

We don't know. I estimate it's higher than necessary. But the security sustainable without either coinbase or prohibitive tx fees will be much, much lower, and we don't want to roll the dice thinking maybe the sustainable amount will be sufficient.

I think you'll be disappointed, AFAIK this was mentioned late in this thread. You may want to search for the post about proof of stake by QuantumMechanic, from which I got the general idea.


I need to research this more, yes. But what I had in mind is a targeted attack against a particular node, trying to isolate it from the network and feeding it blocks distinct from those known to the rest of the network. I think it's possible to do that, and while I don't know if such an attack can be lucrative, the victim node can never recover if it adheres to your protocol rigorously.

But if it turns out to be a viable means for increasing security of large transfers (for which a day of waiting would be acceptable) then by all means, proof of stake won't be needed.

No. With hopping-proof methods (geometric, PPLNS) the expected payout per share is the same no matter when it was submitted.

This throws away exactly what the "longest chain" rule was supposed to prevent - a node being unable to catch up with the rest of the network after a period of isolation. You'll want some way to recover by checking which branch is the real one... From a "trusted" source, whose signature you'll want. So might as well make it part of the design.

As I mentioned you don't need the private key required to sign proof-of-stake to be the same one needed to send coins. You'll keep your sending key well hidden offline, while the stake key will be online doing signatures. If someone steals your stake key, you just move the coins to a new address.

Given the distribution of bitcoins, I don't think 3.5M BTC is that many addresses.

Of course it's not the only risk. But the risk due to to variance can be calculated and planned for.

Could work, but it will probably have a lot of false positives, and what stops the attacker from creating a new account once in a while?

That's what we're talking about.

I don't have millions of dollars to fund this experimental attack.