DGM - what is wrong with that method?

[Meni Rosenfeld]

DGM is in no way a scam, it pays miners fairly and is IMO the most flexible and elegant single mining pool reward method.

I don't know if using DGM is a cause for pools losing popularity, but there are some things to consider:

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.
3. In its vanilla form, it is not suitable for large-scale parallel implementations; and parallelizable variants such as the hypothetical shift-DGM are even more complicated.
4. The advantages it (and similar methods) has over PPS, which is profoundly simpler in every possible way, will be less pronounced in the future.

I believe the future of pooled mining is PPS, specifically multi-insurance PPS (still need to write a post explaining what that is).

I believe Meni Rosenfeld invented the DGM method.

Guilty as charged.

Here are Ozcoin's last 30, BTC deprived rounds.
http://ozco.in/content/overview-bitcoin

You do know that the blocks which pay less than 25 BTC are those in which the miners received more than if they mined PPS, right?

Specifically for Ozcoin, DGM miners aren't 100% of the pool miners, so they don't get 100% of its rewards on average... They only get their share in the pool.

@organofcorti Correct me if I'm wrong but, every PPLNS pool I've seen has full block payouts, minus the 1-2% fees, for each round.

That is correct. However PPLNS pools don't pay extra during unlucky rounds.

Plzzz show me these numbers and I will stfu.

organofcorti is the empirical pool stats guy, listen to what he has to say.

[os2sam]

Here are Ozcoin's last 30, BTC deprived rounds.
http://ozco.in/content/overview-bitcoin

Where is Ozcoin getting the BTC for the POT payout ?

The page you reference show's exactly where PoT payout comes from.

I just don't understand what your basing your complaint on.  Nothing objective.

I think, that is subjective on my part, that you have trust issues and expect everyone to screw over everyone else.  Well believe it or not, not all of us are out to screw over everyone.  I'm sure you'll chose the not.
Sam

[os2sam]

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.

That's one reason I prefer Proportional payout.  It is fairly easy to verify and the Pool does not need to risk loss due to bad luck.  And with easily verifiable payout system you get enhanced trust.

I believe the future of pooled mining is PPS, specifically multi-insurance PPS (still need to write a post explaining what that is).

I hope your wrong.  If pools are forced into a PPS they will have no guarantee of a sustainable business model since the risk will be too high and will just stop providing the service.  Then only dishonest people will be able afford to run pools by screwing over their user base, selling their users information or using the hashes for something nefarious.

Just my two Satoshi's worth,
Sam

[Meni Rosenfeld]

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.

That's one reason I prefer Proportional payout.  It is fairly easy to verify and the Pool does not need to risk loss due to bad luck.  And with easily verifiable payout system you get enhanced trust.

Wait, what? Proportional is the most broken, hoppable method that exists.

I believe the future of pooled mining is PPS, specifically multi-insurance PPS (still need to write a post explaining what that is).

I hope your wrong.  If pools are forced into a PPS they will have no guarantee of a sustainable business model since the risk will be too high and will just stop providing the service.  Then only dishonest people will be able afford to run pools by screwing over their user base, selling their users information or using the hashes for something nefarious.

Just my two Satoshi's worth,
Sam

I said "multi-insurance PPS". The pool's risk in this arrangement is low.

No one is forced to do anything, I'm just saying this is the best solution for everyone.

[organofcorti]

I said "multi-insurance PPS". The pool's risk in this arrangement is low.

No one is forced to do anything, I'm just saying this is the best solution for everyone.

Do you have a link to what you've done so far? I'm only guessing, but does this have anything to do with sharing the risk over multiple pools ( sort of like a proxy pool does with shares )? Or am I completely off-base?

[Meni Rosenfeld]

I said "multi-insurance PPS". The pool's risk in this arrangement is low.

No one is forced to do anything, I'm just saying this is the best solution for everyone.

Do you have a link to what you've done so far? I'm only guessing, but does this have anything to do with sharing the risk over multiple pools ( sort of like a proxy pool does with shares )? Or am I completely off-base?

That's basically it. The ideas are fairly simple, but I don't have anything written down yet.

[organofcorti]

I said "multi-insurance PPS". The pool's risk in this arrangement is low.

No one is forced to do anything, I'm just saying this is the best solution for everyone.

Do you have a link to what you've done so far? I'm only guessing, but does this have anything to do with sharing the risk over multiple pools ( sort of like a proxy pool does with shares )? Or am I completely off-base?

That's basically it. The ideas are fairly simple, but I don't have anything written down yet.

I tried to think of a way for pools to share risk without a central authority (sort of "peer-to-peer" risk management) but I couldn't figure a way to make it work. I'm quite keen to see how you've approached it

[os2sam]

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.

That's one reason I prefer Proportional payout.  It is fairly easy to verify and the Pool does not need to risk loss due to bad luck.  And with easily verifiable payout system you get enhanced trust.

Wait, what? Proportional is the most broken, hoppable method that exists.

There is nothing broken about Proportional Payout.  It is straight forward and it works.

Complicated payout schemes are confusing and make people wonder/distrust pools that use them.  As we have just seen.

I completely trust Eleuthria and therefore his PPLNS payout and the same goes for Graet and his DGM.  But how difficult would it be for an unscrupulous pool/person to take advantage of that complexity for their own advantage?  I'm sure Organofcorti would catch it, but how long would that take?

Anyway as far as hoppable, so what.  People should be free to hop if they want or not.  And users can decide if they want to mine on  pools that are more hoppable or not.  If a person chooses not to be informed how is that everyone else problem?

[os2sam]

I said "multi-insurance PPS". The pool's risk in this arrangement is low.
No one is forced to do anything, I'm just saying this is the best solution for everyone.

That term did not go unnoticed by me.

That implies involvement of third parties, which means involvement of more people which means more error and more distrust, possibly.  It would be interesting to hear/see an explanation, in laymen's terms.

PPS is definitely easy to understand and verify.  But can be risk free?  Pools are businesses and always have been. Pool ops need to approach it as a business as apposed to a hobby.  Even pools that started as an educational exercise for the pool ops should probably draw to a close and take a much more serious business like approach.  With the existing hash rate and really good bitcoin price there is really too much to risk for the Pools and Miners.
Sam

[crazyates]

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.

That's one reason I prefer Proportional payout.  It is fairly easy to verify and the Pool does not need to risk loss due to bad luck.  And with easily verifiable payout system you get enhanced trust.

Wait, what? Proportional is the most broken, hoppable method that exists.

Question for you: would Prop still be hoppable if it used a larger scoring window? Rather than using a single block period, what if it were to use a 5 block period? Or 10? Still keep it simple, but extend the period of time you're looking at.

Rather than (Your shares for current round)/(Total shares for current round), it would be (Your shares over last 10 rounds)/(Pool's shares for last 10 rounds). Does that make sense?

[Hippie Tech]

DGM is in no way a scam, it pays miners fairly and is IMO the most flexible and elegant single mining pool reward method.

I don't know if using DGM is a cause for pools losing popularity, but there are some things to consider:

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.
3. In its vanilla form, it is not suitable for large-scale parallel implementations; and parallelizable variants such as the hypothetical shift-DGM are even more complicated.
4. The advantages it (and similar methods) has over PPS, which is profoundly simpler in every possible way, will be less pronounced in the future.

I believe the future of pooled mining is PPS, specifically multi-insurance PPS (still need to write a post explaining what that is).

I believe Meni Rosenfeld invented the DGM method.

Guilty as charged.

Here are Ozcoin's last 30, BTC deprived rounds.
http://ozco.in/content/overview-bitcoin

You do know that the blocks which pay less than 25 BTC are those in which the miners received more than if they mined PPS, right?

Specifically for Ozcoin, DGM miners aren't 100% of the pool miners, so they don't get 100% of its rewards on average... They only get their share in the pool.

@organofcorti Correct me if I'm wrong but, every PPLNS pool I've seen has full block payouts, minus the 1-2% fees, for each round.

That is correct. However PPLNS pools don't pay extra during unlucky rounds.

Plzzz show me these numbers and I will stfu.

organofcorti is the empirical pool stats guy, listen to what he has to say.

Sorry but that PPS excuse is laughable. Thanks for agreeing with me that the miners coulda, shoulda and would have made ALOT more, if they were 25 BTC rounds. lol

I've been waiting months for oganofcorti's or anyone's stats on how much bad luck will be needed for any of these pools to pay back the miners.

Oh. My. God.

Ozcoin offers 2 payout methods. It doesn't matter if its DGM/PoT or PPS/Prop. Its the same pool. Same servers. Users get paid from the same addy. Its not like OzcoinDGM and OzcoinPOT are separate pools.

No one single payout method is going to equal the entire pools income. Ozcoin did not short DGM users because they have paid out less than all the blocks they've earned. That discrepancy you pointed out are the coins it takes to pay PoT users, which you then proceeded to wonder where they get their funds from. Did you think DGM users get all the blocks and Pot users get paid with imaginary coins from ground up unicorn hooves?

PROVE that the BTC is returned to its rightful owners in a timely fashion.

What is Ozcoin's official explanation of where/how the mixed reward methods are calculated ? Is it possible to tell who it is that is being soo lucky ?

POT or no POT. The projected deficit is monsterous AND JUST AS UGLY.

WARNING !! VIEWER DISCRECTION ADVISED !! THE FOLLOWING CONTAINS SCENES OF EXTEMELY LOW ROUND PAYOUTS !



 

[Hippie Tech]

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.

That's one reason I prefer Proportional payout.  It is fairly easy to verify and the Pool does not need to risk loss due to bad luck.  And with easily verifiable payout system you get enhanced trust.

I believe the future of pooled mining is PPS, specifically multi-insurance PPS (still need to write a post explaining what that is).

I hope your wrong.  If pools are forced into a PPS they will have no guarantee of a sustainable business model since the risk will be too high and will just stop providing the service.  Then only dishonest people will be able afford to run pools by screwing over their user base, selling their users information or using the hashes for something nefarious.

Just my two Satoshi's worth,
Sam

+1 eg. props to your view on Prop.

'Pool-hopper' and 'hop-proof' are terms used to fear monger miners into staying away from Prop. Its unfortunate that most can't see past that.

Next to finding my first and second BTC blocks, nothing has given me more crypto happiness than seeing the hoppers get burned at BTCmine over the months. I almost feel obligated to tip them something. 

[Turbor]

'Pool-hopper' and 'hop-proof' are terms used to fear monger miners into staying away from Prop. Its unfortunate that most can't see past that.

Yeah and while the fools were mining prop you hopped their pool ?

[crazyates]

Oh. My. God.

Ozcoin offers 2 payout methods. It doesn't matter if its DGM/PoT or PPS/Prop. Its the same pool. Same servers. Users get paid from the same addy. Its not like OzcoinDGM and OzcoinPOT are separate pools.

No one single payout method is going to equal the entire pools income. Ozcoin did not short DGM users because they have paid out less than all the blocks they've earned. That discrepancy you pointed out are the coins it takes to pay PoT users, which you then proceeded to wonder where they get their funds from. Did you think DGM users get all the blocks and Pot users get paid with imaginary coins from ground up unicorn hooves?

PROVE that the BTC is returned to its rightful owners in a timely fashion.

What is Ozcoin's official explanation of where/how the mixed reward methods are calculated ? Is it possible to tell who it is that is being soo lucky ?

POT or no POT. The projected deficit is monsterous AND JUST AS UGLY.

WARNING !! VIEWER DISCRECTION ADVISED !! THE FOLLOWING CONTAINS SCENES OF EXTEMELY LOW ROUND PAYOUTS !
[IMG ]http://img.techpowerup.org/130809/uberripped.jpg[/img]

First of all, do you have an issue with DGM or Ozcoin? You started out attacking DGM, but you're using Ozcoin to do so. However, your arguments are missing key facts, and you've resorted to just blindly shoveling useless information that has no relevance.

Second, PoT or no PoT DOES make a difference. If you don't take PoT stats into consideration, it looks like Ozcoin is underpaying miners. However, if you DO take PoT stats into consideration, as I did in post #15, you'll see that there is no deficit. Your proof is right there! They're compensating miners just fine. Again, this is an Ozcoin specific scenario, not a DGM issue, so I'm having a hard time figuring out who you're angry at.

And lastly, look at the date of the rounds in that picture. They're from December of 2012, almost 9 months ago! That picture was from less than 2 weeks after Ozcoin announced PoT, and they did not have the website reporting the stats properly. See this response from Graet:

Initial investigations points to PoT payout being deducted and the remainder shown, this was not how it should be, looking to fix it now.

Please stop vomiting biased mindless FUD all over the place, esp when everyone is telling you you're wrong. Oh, and those pesky facts aren't helping your case either.

[-ck]

Don't let facts get in the way of a good old fashioned right royal trolling.

[Meni Rosenfeld]

1. It is not trivial to implement correctly.
2. While its principles are simple, the results that follow from these principles are fairly complicated.

That's one reason I prefer Proportional payout.  It is fairly easy to verify and the Pool does not need to risk loss due to bad luck.  And with easily verifiable payout system you get enhanced trust.

Wait, what? Proportional is the most broken, hoppable method that exists.

Question for you: would Prop still be hoppable if it used a larger scoring window? Rather than using a single block period, what if it were to use a 5 block period? Or 10? Still keep it simple, but extend the period of time you're looking at.

Rather than (Your shares for current round)/(Total shares for current round), it would be (Your shares over last 10 rounds)/(Pool's shares for last 10 rounds). Does that make sense?

It would still be hoppable, perhaps not as much.

[Hippie Tech]

Oh. My. God.

Ozcoin offers 2 payout methods. It doesn't matter if its DGM/PoT or PPS/Prop. Its the same pool. Same servers. Users get paid from the same addy. Its not like OzcoinDGM and OzcoinPOT are separate pools.

No one single payout method is going to equal the entire pools income. Ozcoin did not short DGM users because they have paid out less than all the blocks they've earned. That discrepancy you pointed out are the coins it takes to pay PoT users, which you then proceeded to wonder where they get their funds from. Did you think DGM users get all the blocks and Pot users get paid with imaginary coins from ground up unicorn hooves?

PROVE that the BTC is returned to its rightful owners in a timely fashion.

What is Ozcoin's official explanation of where/how the mixed reward methods are calculated ? Is it possible to tell who it is that is being soo lucky ?

POT or no POT. The projected deficit is monsterous AND JUST AS UGLY.

WARNING !! VIEWER DISCRECTION ADVISED !! THE FOLLOWING CONTAINS SCENES OF EXTEMELY LOW ROUND PAYOUTS !
[IMG ]http://img.techpowerup.org/130809/uberripped.jpg[/img]

First of all, do you have an issue with DGM or Ozcoin? You started out attacking DGM, but you're using Ozcoin to do so. However, your arguments are missing key facts, and you've resorted to just blindly shoveling useless information that has no relevance.

Second, PoT or no PoT DOES make a difference. If you don't take PoT stats into consideration, it looks like Ozcoin is underpaying miners. However, if you DO take PoT stats into consideration, as I did in post #15, you'll see that there is no deficit. Your proof is right there! They're compensating miners just fine. Again, this is an Ozcoin specific scenario, not a DGM issue, so I'm having a hard time figuring out who you're angry at.

And lastly, look at the date of the rounds in that picture. They're from December of 2012, almost 9 months ago! That picture was from less than 2 weeks after Ozcoin announced PoT, and they did not have the website reporting the stats properly. See this response from Graet:

Initial investigations points to PoT payout being deducted and the remainder shown, this was not how it should be, looking to fix it now.

Please stop vomiting biased mindless FUD all over the place, esp when everyone is telling you you're wrong. Oh, and those pesky facts aren't helping your case either.

Funny how THE FACTS can be that way.

And now I'm angry ?! lmao

If you honestly missed why the Dec 2012 rounds screenie was posted, then we should end this conversation right here.

[BTC-engineer]

Another question regarding DGM which is addressed to Meni.

What about the benefit of DGM over let's say PPS, from a miners point of view, especially in a time periode like now, where the difficulty is rapidly going up for the next months?

Case 1:
A Miner is just bringing up his investment into new (ASIC) mining equipment. Because of the rapidly increasing difficulty rate he knows he could make the most Bitcoins in the first days, maybe few weeks.

Case 2:
A Miner has its mining equipment already stable running.

Let's say a DGM pool doesn't take any fee, and the PPS pool does take a 3% fee. Let's say the difficulty is going up +30% every step.
Wouldn't the miner in case 1&2 'loose' bitcoins because of the slow/delayed adaption of DGM to the rapidly increasing difficulty?
Couldn't it be more wise to choose the disadvantage of 3% pps fee, instead of loosing more % by delayed adaption by DGM based on a specific difficulty increase rate?

I'm not an DGM expert and would like to know the option of a DGM expert.
  
 

[Meni Rosenfeld]

Another question regarding DGM which is addressed to Meni.

What about the benefit of DGM over let's say PPS, from a miners point of view, especially in a time periode like now, where the difficulty is rapidly going up for the next months?

Case 1:
A Miner is just bringing up his investment into new (ASIC) mining equipment. Because of the rapidly increasing difficulty rate he knows he could make the most Bitcoins in the first days, maybe few weeks.

Case 2:
A Miner has its mining equipment already stable running.

Let's say a DGM pool doesn't take any fee, and the PPS pool does take a 3% fee. Let's say the difficulty is going up +30% every step.
Wouldn't the miner in case 1&2 'loose' bitcoins because of the slow/delayed adaption of DGM to the rapidly increasing difficulty?
Couldn't it be more wise to choose the disadvantage of 3% pps fee, instead of loosing more % by delayed adaption by DGM based on a specific difficulty increase rate?

I'm not an DGM expert and would like to know the option of a DGM expert.

No. He would still get more on average with fee-free DGM.

The payment itself will be at some future time, but the scoring for the work is immediate. If right now the difficulty is D=40M and B=25, the score he will get for each share is pB = B/D = 0.000000625, which guarantees he will get on average pB for it, no matter what the difficulty will be in the future when he actually receives the payment - just like in fee-free PPS.

What you're suggesting is essentially hopping based on anticipated difficulty changes - anticipating the increase, the miner would want to hop to a PPS pool. But DGM was carefully designed to be immune to this kind of hopping. Compare this to some naive implementations of PPLNS, which are not robust to difficulty adjustment hopping.

[BTC-engineer]

Another question regarding DGM which is addressed to Meni.

What about the benefit of DGM over let's say PPS, from a miners point of view, especially in a time periode like now, where the difficulty is rapidly going up for the next months?

Case 1:
A Miner is just bringing up his investment into new (ASIC) mining equipment. Because of the rapidly increasing difficulty rate he knows he could make the most Bitcoins in the first days, maybe few weeks.

Case 2:
A Miner has its mining equipment already stable running.

Let's say a DGM pool doesn't take any fee, and the PPS pool does take a 3% fee. Let's say the difficulty is going up +30% every step.
Wouldn't the miner in case 1&2 'loose' bitcoins because of the slow/delayed adaption of DGM to the rapidly increasing difficulty?
Couldn't it be more wise to choose the disadvantage of 3% pps fee, instead of loosing more % by delayed adaption by DGM based on a specific difficulty increase rate?

I'm not an DGM expert and would like to know the option of a DGM expert.

No. He would still get more on average with fee-free DGM.

The payment itself will be at some future time, but the scoring for the work is immediate. If right now the difficulty is D=40M and B=25, the score he will get for each share is pB = B/D = 0.000000625, which guarantees he will get on average pB for it, no matter what the difficulty will be in the future when he actually receives the payment - just like in fee-free PPS.

What you're suggesting is essentially hopping based on anticipated difficulty changes - anticipating the increase, the miner would want to hop to a PPS pool. But DGM was carefully designed to be immune to this kind of hopping. Compare this to some naive implementations of PPLNS, which are not robust to difficulty adjustment hopping.

Thanks a lot for your answer, which is clarifying this thing to me.