Complete dezentralisation of mining possible ?

[monsterer]

This is an interesting idea; certainly gets rid of mempool issues too doesn't it   and TX relaying incentivization.  And TX fees, well sorta. 
However, totally impractical for a normal-use coin.  Might be interesting to see what happened though are you planning to start one to see? 

What do you think about just making it so that the miner of a block must have the coinbase private key?  Doesn't that get rid of pools?   

Yes, that would enforce the condition that only you can mine your own blocks. I don't think it's totally impractical, necessarily. What makes you say that?

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[funkenstein]

This is an interesting idea; certainly gets rid of mempool issues too doesn't it   and TX relaying incentivization.  And TX fees, well sorta. 
However, totally impractical for a normal-use coin.  Might be interesting to see what happened though are you planning to start one to see? 

What do you think about just making it so that the miner of a block must have the coinbase private key?  Doesn't that get rid of pools?   

Yes, that would enforce the condition that only you can mine your own blocks. I don't think it's totally impractical, necessarily. What makes you say that?

A couple of reasons .  One is that if there were ever more than a TX per 20 seconds or so, then this becomes too fast.. block times of one per 20 seconds have issues from what I hear.  And what if the number of TX increases?  There are no fees if you always mine your own TX.  Perhaps a balance would be reached as people simply won't be able to use the network so will stop trying to submit their TXs.   Anyway at this point there are too many people trying, the difficulty is high.. and if I want to submit a TX it becomes "run your computer for a month and there's a 50% chance your TX goes through".  That is not totally impossible to use but I called impractical because I'm spoiled  

As to enforcing that only you can mine your own blocks, this would still allow trusted pools, that is, pools where participants are honest (and don't try to cheat the pool).  In some sense, the possiblility of a trustless pool as bitcoin offers is a feature and not a bug.  What do you think?

[monsterer]

A couple of reasons .  One is that if there were ever more than a TX per 20 seconds or so, then this becomes too fast.. block times of one per 20 seconds have issues from what I hear.  And what if the number of TX increases?  There are no fees if you always mine your own TX.  Perhaps a balance would be reached as people simply won't be able to use the network so will stop trying to submit their TXs.   Anyway at this point there are too many people trying, the difficulty is high.. and if I want to submit a TX it becomes "run your computer for a month and there's a 50% chance your TX goes through".  That is not totally impossible to use but I called impractical because I'm spoiled  

As to enforcing that only you can mine your own blocks, this would still allow trusted pools, that is, pools where participants are honest (and don't try to cheat the pool).  In some sense, the possiblility of a trustless pool as bitcoin offers is a feature and not a bug.  What do you think?

Such a system would not have regular block intervals, for sure, and indeed it would be a requirement that a sent transaction not become orphaned, otherwise you would have to manually resend transactions if you weren't quick enough.

You might design it to have no fees, because the spam protection is built in, but there are also blockchain storage costs to consider.

Difficulty wise, what if you can set your own difficulty for the transactions you mine (with proportional block reward)?

A trusted pool, as you put it, would own your private keys and would essentially be an online wallet with none of the security of even blockchain.info.

[funkenstein]

Such a system would not have regular block intervals, for sure, and indeed it would be a requirement that a sent transaction not become orphaned, otherwise you would have to manually resend transactions if you weren't quick enough.

You might design it to have no fees, because the spam protection is built in, but there are also blockchain storage costs to consider.

I was thinking that because you always mine your own TX, any fees you include: go back to you  

Difficulty wise, what if you can set your own difficulty for the transactions you mine (with proportional block reward)?

Hmm that's another interesting idea   I guess in the end there will be a network-wide difficulty-per-satoshi-reward, so it might not change all that much. 

A trusted pool, as you put it, would own your private keys and would essentially be an online wallet with none of the security of even blockchain.info.

I was thinking more like 20 friends get together and agree that if any one of them finds a block they share the proceeds proportionally to everyone's hash rate.  Not that they would use this kind of thing to store any personal funds.  To check the hash rate they all show regularly "shares" which prove they are mining to some coinbase or another.  If anyone mines a block and grabs the funds for themselves without saying anything, the others will be able to see that cheating occured.  They won't be able to get the money back for distributing to their pool of course but they can at least see what happened. 

Cheers and thanks  --  funkenstein_the_dwarf 

[anthonycamp]

the mining will be not decentrilized into several low power hash phones its to be used by clouds and big miner farms of PH for future into the development of HW

[monsterer]

I was thinking that because you always mine your own TX, any fees you include: go back to you  

An excellent point! In that case, storage fees would be burned by the sender, thereby reducing supply.

I was thinking more like 20 friends get together and agree that if any one of them finds a block they share the proceeds proportionally to everyone's hash rate.  Not that they would use this kind of thing to store any personal funds.  To check the hash rate they all show regularly "shares" which prove they are mining to some coinbase or another.  If anyone mines a block and grabs the funds for themselves without saying anything, the others will be able to see that cheating occured.  They won't be able to get the money back for distributing to their pool of course but they can at least see what happened.

Yes, this is possible. Not entirely sure it would be scalable to the extent pools in bitcoin are, tho.

[clemahieu]

For the largest amount of decentralization we'd want to distribute to people rather than hardware so if we could find a method that can differentiate people from automation we could have better decentralization.  Web programmers have a similar problem and they invented captchas to solve this problem.  For https://raiblocks.net/ we're distributing 100% through a captcha hoping this is a more egalitarian way to distribute rather than skewing toward enthusiasts.

[NewBTCGuy]

IMO the key to total decentralisation would be a mining revard system which pays equal reward to each miner, no matter how much hash the miner contributes. Of course there should be a minimum hashrate to get rewards.

This would kill the arms race, but I dont think its possible.

This can never work over the long run.  It will fail for the same reason that all socialist/communist schemes fail - hashrate costs resources.  If you create a system where resource/productivity investment is not rewarded based on a free-market curve, investment in resources and productivity lags behind he efficient frontier and generally declines until everyone is poor.  Attempting to "fix" that problem by setting an arbitrary minimum resource investment (presumably decided by some central committee) will forestall the ultimate failure of the system, but not prevent it.  Committees setting arbitrary investment/production quotas have historically proven to be horrendously unreliable market price setting mechanisms.

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[funkenstein]

For the largest amount of decentralization we'd want to distribute to people rather than hardware so if we could find a method that can differentiate people from automation we could have better decentralization.  Web programmers have a similar problem and they invented captchas to solve this problem.  For https://raiblocks.net/ we're distributing 100% through a captcha hoping this is a more egalitarian way to distribute rather than skewing toward enthusiasts.

Lol, you know that captchas are inherently broken right?  I can always build a decaptcha service if the product is worthwhile.  Granted captchas have their use as script kiddie deterrents but they don't work for things like Ticketmaster and they certainly wouldn't work for securing a currency. 

The Sybil problem is not solvable.  There is no way to distinguish and individual person -  dna, fingerprints, etc. can all be forged in tests or manipulated by testers. 

[clemahieu]

For the largest amount of decentralization we'd want to distribute to people rather than hardware so if we could find a method that can differentiate people from automation we could have better decentralization.  Web programmers have a similar problem and they invented captchas to solve this problem.  For https://raiblocks.net/ we're distributing 100% through a captcha hoping this is a more egalitarian way to distribute rather than skewing toward enthusiasts.

Lol, you know that captchas are inherently broken right?  I can always build a decaptcha service if the product is worthwhile.  Granted captchas have their use as script kiddie deterrents but they don't work for things like Ticketmaster and they certainly wouldn't work for securing a currency. 

The Sybil problem is not solvable.  There is no way to distinguish and individual person -  dna, fingerprints, etc. can all be forged in tests or manipulated by testers. 

The Sybil problem is giving a voting stake to an inherently unlimited resource e.g. a pseudonymous identity.  The key is to not give votes to an unlimited resource i.e. give votes to proof of work or stake.  With RaiBlocks the only way to forge a vote would be to have the private key of an account with a balance.

[alkan]

Mining is profitable because the miner is rewarded for every created block by the assignment of a certain amount of coins (fiat coins, transaction fees). The rewards therefore consist in (a) a direct financial gain that is (b) more or less proportional to the number of mined coins. If we were able to build an incentive scheme for mining that acts in an indirect manner and doesn’t generate profit on its own, we might be able to put an end to commercial mining and decentralize the blockchain.

To that end, we could leverage transaction fees in a completely different way than most existing cryptocurrencies do. Instead of allowing the miner to collect the fees paid by other users as a financial reward, we should shift the focus on the transaction fees that a miner has to pay when making a transaction himself. Let’s assume that each newly created address must pay a fixed percentage of the transferred amount to get his transaction acknowledged by the chain. This constitutes a financial burden that we can lower by a certain rate, every time a valid block is mined by the given address. Hence, after mining a couple of blocks, the address will benefit from very low transaction fees.

With such a scheme, users who want to actively use their address for sending payments have a strong incentive to mine blocks, even though they don’t receive any direct reward by creating the block itself. On the other hand, the system doesn’t offer any business opportunity for commercial miners who are seeking profit out of mining. The only possible thing they might try is creating and selling accounts with low transaction fees to new users. But since accounts can only be transferred by revealing the corresponding private key, such transactions will always be very risky.

Another twist to the system would please to users who stand on the receiving side of the transactions, like merchants. In addition to lowering the fees as a reward for every mined block, we could introduce an increasing fee discount linked to the receiver's address. So, when a sender wants to pay money to a receiver, he will end up paying the standard fee * sender's discount * receiver's discount. Both discounts will grow with every block created by the miner.

The drawback of the described incentive mechanism is the fact that due to the lack of professional miners it would need a lot of active users to reach the current hash rate of Bitcoin. Furthermore, every user would need to have a realistic chance of getting some discounts by mining on a regular PC or smartphone for some time. With the current block time of Bitcoin it's impossible to realise such a system for more than maybe a few 1000 users.

[ImHash]

It will never be possible just think about it, those who have the big mines are the one centralized mines in the world, then how can you hope for anything else?

[monsterer2]

Last year I finally got around to writing up the system I was alluding to in this old thread. It proposes creating a new consensus mechanism inspired by the core values of bitcoin but solving the major problems inherent in the current bitcoin concensus model:

* centralisation of mining
* transaction throughput
* confirmation times

The key to solving the problem is to create a trustless, total order for all transactions in a system where every user is the only person who can mine their own transactions.

The paper is a draft with all the proofs missing and there is still an open question related to the claim that miners are incentivised to include uncle references. With that said, I think it could inspire some debate and maybe be useful in general. In any case, I think it's better to share this work even in it's current incomplete state than to let it vanish into obscurity.

https://github.com/wildbunny/docs/blob/master/T.E.T.O-draft.pdf

Cheers, Paul.

[deuteragenie]

Maybe the PoW function should be made as simple as possible, so that ASICs can be devised for it very easily.
The design of such ASIC could be open sourced - removing the barrier of entry, ensuring a level playing field.
Then, every device on the planet can easily be fitted with these ASICs and the overhead of doing would be negligible for HW manufacturer.
I do not think it would be necessary to reward miner in a heavily decentralized scenario (say, > 100M miners) - the fact that you would get secure transactions for the cost of the energy you spend seems to be enough of incentive.
Then, I also believe that any user node should (must) be a mining node.
That is, it should not be possible to use the system without contributing to mining.

[ranochigo]

The design of such ASIC could be open sourced - removing the barrier of entry, ensuring a level playing field.

Hence, removing the competition for ASIC manufacturers. Open sourced does not mean that they will follow that design in their ASIC.

Then, every device on the planet can easily be fitted with these ASICs and the overhead of doing would be negligible for HW manufacturer.

Uhh. No. There is definitely some overhead to this. It isn't possible for you to fit an ASIC chip into your phone together with your CPU. The hashpower is negligible too.

I do not think it would be necessary to reward miner in a heavily decentralized scenario (say, > 100M miners) - the fact that you would get secure transactions for the cost of the energy you spend seems to be enough of incentive.

No rewards=Lesser people having incentive to mine = easily attacked. You cannot assume that there would be 100Million miners at any time. If you can fit it into a phone, the will be very insignificant due to the low TDP design.

Then, I also believe that any user node should (must) be a mining node.
That is, it should not be possible to use the system without contributing to mining.

No No No. If every node IS a mining node, everyone would have to fork out their resources to the network. If I have a phone and I want to use Bitcoin, do I have to risk overheating my phone just to use it? The idea is frankly impossible.

[deuteragenie]

150pcs of A3233-q48 are fitted in a 1TH/s Avalon Miner.
See https://bitcointalk.org/index.php?topic=523309.0
Cost per unit is ca 0.1 USD
Consumption is about 5 watts

So it seems that if each user/miner would be equipped with one chip, the number of users/miners necessary to achieve the same hash power as of today would be 5000000 TH/s * 150 = 750 millions.  That is much less than the number of facebook users !

[ranochigo]

150pcs of A3233-q48 are fitted in a 1TH/s Avalon Miner.
See https://bitcointalk.org/index.php?topic=523309.0
Cost per unit is ca 0.1 USD
Consumption is about 5 watts

So it seems that if each user/miner would be equipped with one chip, the number of users/miners necessary to achieve the same hash power as of today would be 5000000 TH/s * 150 = 750 millions.  

Do remember to factor in: the additional cost of miniaturizing the chips such that the performance of the phone is not affected, the heat output is eliminated, every company in the world is willing to redesign their board. Honestly, if you were to launch a phone with this feature, the only people that may even be interested (not necessarily buying) in it are hardcore Bitcoin enthusiast. It simply doesn't make sense for manufacturers to do this especially if they don't gain anything, neither do most people that is using the phone.

That is much less than the number of facebook users !

Nice. Divide that by 750 and that might be 1/2 of the Bitcoin users.

Yeah I forgot this: In comparison, a phone's battery is about 3000mAH.

[deuteragenie]

BM1387 ASIC inside the Antminer S9: 189 pcs per unit, each unit 14 TH/s
So, each BM1387 is capable of ca 0.07 TH/s, consumption roughly 5 watts as well
To achieve the current 5.000.000 TH/s, you would need 71 millions of those.
Assume 50% mobile users with one chip, and 50% desktop users with two chips, that means a completely fully decentralized network of roughly 50 millions users.
The issues would seem to be more on the network bandwidth / latency etc side than on the ASIC side I believe.

[freemanjackal]

Last year I finally got around to writing up the system I was alluding to in this old thread. It proposes creating a new consensus mechanism inspired by the core values of bitcoin but solving the major problems inherent in the current bitcoin concensus model:

* centralisation of mining
* transaction throughput
* confirmation times

The key to solving the problem is to create a trustless, total order for all transactions in a system where every user is the only person who can mine their own transactions.

The paper is a draft with all the proofs missing and there is still an open question related to the claim that miners are incentivised to include uncle references. With that said, I think it could inspire some debate and maybe be useful in general. In any case, I think it's better to share this work even in it's current incomplete state than to let it vanish into obscurity.

https://github.com/wildbunny/docs/blob/master/T.E.T.O-draft.pdf

Cheers, Paul.

i will give it a read.

I see some good ideas here. remember that many great things nowadays were considered impossible many many years ago

[deuteragenie]

Hahaha, well no i really think it's a great idea, but how to reach all those potential miners?
I could finnaly join the miners club :d

The BM1387 ASIC chip is capable of ca 0.07 TH/s and consumes roughly 5 watts.
You would need some 70 millions of those installed to match the current total network hash rate.  No need for billions or users.

Phone and PC/laptop manufacturers could add an ASIC to their boards for example.
Or dongles could be made (possibly combining OTP generation with mining killing two birds with one stone...).
Quite honestly the "price" to pay (ie device + energy costs) is well worth it !

I believe that the major issue would be rather on the network bandwidth / latency side of things.
I do not know if bitcoin has been designed with such a heavily decentralized mining in mind.