Cool, if you're bored, dumb idea no.2, could someone tell me why just speeding up the blocks isn't an option?
As I understand it a big incentive of pool mining is consistency of earnings.
The blocks come around so infrequently that unless you're in a decent size pool you will experience a lot of volatility.
How hard is it to change the block reward to 0.25 and have a new block found every 6 seconds?
That way you're 100X more likely to find a block and it will decrease volatility of earnings, thereby dis-incentivising pool mining.
(Of course you would probably need to wait for 300 confirmations vs. 3 but it would take the same amount of time.)
When you solve a block, all the other nodes on the network aren't instantaneously aware of it through any sort of quantum entanglement. Instead, you have to broadcast the block to your peers (who then relay it to their peers, who then relay it to ...). This means it can take a little bit of time for the entire network to hear about a recently solved block.
Until they've heard about the recent block any miner (or mining pool) will still be diligently working on their own block. If difficulty is such that blocks come very quickly, then it is far more likely that several people will all solve blocks before all the solved blocks have been relayed throughout the entire network.
This then creates a temporary fork in the blockchain with various sections of the network each working on a block for a different fork. Eventually one of the forks will win out, but in the meantime, anyone who put any effort into any of the other forks will have wasted effort on orphaned chains.
