How to eliminate Large mining pools

[miner2251]

I again see that we have a massive miner 0xa1b586 is making 5 blocks at 10 mined ratio can You please decrease a little number of nodes, please ?

It also may be some mining pool. For example when many people are mining to the same address, it will be no difference between one miner owning 1000 CPU's and 1000 miners mining to the pool's address. And since Ethereum has an account-based system, all inputs to the same addresses are automatically merged, so they have less size. Also, it is very convenient to do this merging at a coinbase level, because it has less bytes than a normal transaction and is also cheaper, because there is no risk of getting transaction fees by someone else.

My suggestion is not to beg the miner to reduce the number of nodes/miners, but for the dev to find a solution to this issue, since the whole purpose of this coins is now doomed.

But there is no solution to this problem. For example everyone can start mining to the same address, what then? Banning some address is not a solution, since it will be against freedom. People start trying making pools the simplest possible way, just when anyone can notice it. If they will be punished, the situation will be the same, just people will try making pools in a different ways.

Also, what if there is some hidden sidechain under the hood? And what if mining to this address is necessary to get access to some coins on this sidechain?

[Sherlock.Holmes]

I again see that we have a massive miner 0xa1b586 is making 5 blocks at 10 mined ratio can You please decrease a little number of nodes, please ?

It also may be some mining pool. For example when many people are mining to the same address, it will be no difference between one miner owning 1000 CPU's and 1000 miners mining to the pool's address. And since Ethereum has an account-based system, all inputs to the same addresses are automatically merged, so they have less size. Also, it is very convenient to do this merging at a coinbase level, because it has less bytes than a normal transaction and is also cheaper, because there is no risk of getting transaction fees by someone else.

My suggestion is not to beg the miner to reduce the number of nodes/miners, but for the dev to find a solution to this issue, since the whole purpose of this coins is now doomed.

But there is no solution to this problem. For example everyone can start mining to the same address, what then? Banning some address is not a solution, since it will be against freedom. People start trying making pools the simplest possible way, just when anyone can notice it. If they will be punished, the situation will be the same, just people will try making pools in a different ways.

Also, what if there is some hidden sidechain under the hood? And what if mining to this address is necessary to get access to some coins on this sidechain?

There is no need to stop big miners, his gains are in full proportion to his efforts.
There are still many essential differences between mining pools and large miners.
For example, in traditional POW, there are 10 nodes in the entire network, the 5 are solo, and the other 5 are alliances, then the chance of the alliance winner is not 5/10, but 27/32, which is much greater than 5/10 , this is the key to unfairness.
In our network, your chance of winning is always equal to the proportion of your contribution to the entire network.
In addition, since there is no profit advantage in cooperation, there will be no mining pools. In the end, there will be more large miners without alliance and some free small miners, and the system will be more decentralized, and thus more safety

some hidden sidechain under the hood? there is no way to stop selfish mining, only by building a more reliable network to increase their attack costs

[hextobig]

This will enable 2 groups to continue mining, with ASIC mining specialists on the one side and your smaller CPU/GPU group on the other. 

The algorithm in this project seems to be anti-asic, you can use FPGA/GPU to mine it.

[vjudeu]

Well, you can check this coin now, how it rolled out after few months. Just FPGA miners dominated the whole mining scene. And this coin had a failed hard fork, which splitted the chain into two separate chains after block 388,000. Devs are trying to fix it, but for now it turned out that it is not pool resistant at all, because some hidden pools were created and were more profitable than solo mining, at least for me. Now it is not clear what will happen after another hard fork, but as of now we have two competing chains, frozen deposit/withdraw options on qTrade and in general people think this coin is dead.

But because hard forks can change everything dramatically, I don't know if this coin will be even similar to what we have now. We will see, the situation will probably be different after the fork, because we reached ATH at 25k satoshi per coin, then it dropped to a few hundred satoshis per coin and now, when people are switching to other coins and the price is low, it has some potential for growing.

About pools: well, it is still not pool resistant, so some improvements are needed to make it really pool resistant. The most problematic thing for most users is still that they cannot mine less than blockReward without using pools. If I would be able to mine Bitcoin and earn even one satoshi per day on my CPU, I would do it. And as this coin still don't have anything like this, pools are needed to achieve such goal, because there is no better way of getting just that. If people would earn even the smallest coins by solo mining, all pools will be gone instantly. But of course doing such things on-chain is not scalable at all, because if you have 0.01 BTC as a block reward and million miners, then sending one satoshi to every single miner is a lot of dust. Maybe some second layer solution could solve that, but solving it on-chain seems to be very inefficient.

[garlonicon]

Some thoughts on making truly pool resistant coin:

1) Making it anti-GPU or anti-ASIC would not work. Sooner or later, miners would adjust their machines to any consensus, be it Proof of Work, double-phase Proof of Work, Proof of Stake, Proof of Capacity or anything else. For that reason, reusing sha256d seems to be the right way to go. If that's the case, then some hypothetical truly-pool-resistant-altcoin should just be based on pure 80-byte Bitcoin headers. The very reason why pools are created seems to be based on that it is impossible to mine some fraction of the block.
2) The best way of achieving true pool resistance would be combining shares into one, single, easy to verify share. So far, I have no idea, how to make things tick and technically construct something like that. If joining shares is impossible, then the only way to go is collecting all shares from all miners. To start with, there should be some limit to prevent spamming. Storing something like 65,536 best shares should be good enough for the start.
3) Keeping last 65,536 80-byte shares would take 5,242,880 bytes, we could reduce it almost by half by assuming that all shares should have the same previous block hash and the same difficulty. That leaves us with 44-byte shares, occupying 2,883,584 bytes, so pesimistically speaking around 3 MB per block. However, miners should receive their rewards as soon as possible, because as time passes and the chain is extended with more and more blocks, miners should be incentivized to mine shares based on the latest blocks. In other case, all miners would start sending shares with the Genesis Block set as the previous block (or other low-difficulty blocks). To prevent that, the value of the coin should be set when the next block in the Bitcoin chain is found and all rewards should be based on the whole chain work from the previous block hash to the chain tip.
4) Shares should be detached when the reward drops below single satoshi. That should make "Genesis-based shares attack" impossible and force people to distribute shares as soon as possible. Also, shares already paid should attach the proof of payment to prevent claiming reward for the same share twice. Anyway, as rewards would be covered by many blocks, they sooner or later would drop below single satoshi and would be removed from the chain.

[Wind_FURY]

Or just implement BetterHash, and bring power, that can be used politically, away from the mining pools and back to the actual entities who actually controls the hashing power. You can’t “fix” pooling for financial advantage, but BetterHash can disable “exploits” used by mining pools.

[topcoin360]

Or why not just create a PoS sidechain and let the hodlers reject a fork if they are not satisfied with it? Since almost 100% of bitcoin hodlers are not mining it, how would that be less fair? How would that be against bitcoin's principles (from what we know communicating info outside the blockchain isn't forbidden)? Did propose the idea on this forum but the devs didn't seem to like it (or understand it)..

OP's post is right on time. There's no easy way to solve the large mining pools problem but there is an easy way to flip things and make the miners work for the hodlers rather than the opposite. BTC is losing momentum in the crypto market as we speak, maybe the devs will come up with something before it's too late...

[pooya87]

Or why not just create a PoS sidechain and let the hodlers reject a fork if they are not satisfied with it?

You are erasing the problem and replacing it with a much bigger problem.
First of all sidechains are their own chain and have nothing to do with bitcoin as they can also operate without bitcoin. Bitcoin also doesn't care about what is happening on a sidechain so you'll have to create a hard fork to significantly change the protocol for that to happen!
Secondly this will centralize bitcoin to whoever is "richest" and also is willing to risk participating in a centralized sidechain.
Not to mention that PoS itself is severely flawed since it can be manipulated by someone with a large amount of money.

Since almost 100% of bitcoin hodlers are not mining it

Then who are all these miners? Are they coming from outer space?

The "problem" is that when a miner that has the actual hashrate connects to a pool that doesn't have any hashrate, they don't have any control over what they mine. To solve this problem all we have to do is to change the pool protocol not bitcoin.
There are also proposals in that regard like better-hash that I've mentioned in this topic long ago.

[zbig001]

Are these stories of the harmfulness of specialized mining equipment and mining pools not beating a long dead horse?

No PoW coin has ever been successfully attacked/censored due to the fact that its mining algorithm allowed for the construction of an efficient, specialized hardware for mining this coin.

On the other hand, many coins were attacked (although typically for PoW coins, with a limited depth of damage) due to the fact that it was possible to use the computing power of universal purpose (available in rental companies) for the attack.

The fact that miners buy costly, specialized hardware means that they go long on the mined asset without the possibility of closing the long at all, or at most with a large loss.
In no imaginable way it has a negative impact on the security of this asset, on the contrary, it pays for the miner to ensure the success of the opened long.

The same is true of mining pools.

Mining pools are created virtually solely by the need to reduce the granularity of reward and reduce the likelihood of rejecting the valid block (such a risk always exists).
No small mining company can afford the uncertainty of whether it will mine 10 blocks in a given year, or it won't mine any.
Mining pools compete with each other as do the miners themselves. You can always create a new pool, and there is no obligation to participate in any specific pool.

Moreover, the pools are transnational and this can be seen as a factor beneficial for security.

[zbig001]

If the supporters of large blocks won the Bitcoin scalability debate, we might start to worry about the possible mining centralization.

But the "bigblockers" have lost the debate and the threats of mining centralization are gone.

[topcoin360]

Or why not just create a PoS sidechain and let the hodlers reject a fork if they are not satisfied with it?

You are erasing the problem and replacing it with a much bigger problem.
First of all sidechains are their own chain and have nothing to do with bitcoin as they can also operate without bitcoin. Bitcoin also doesn't care about what is happening on a sidechain so you'll have to create a hard fork to significantly change the protocol for that to happen!

The market value of the coin is not recorded on the blockchain but it does determine the network's hashrate. The blockchain itself is controlled by the community. A hard fork could happen but I'm not proposing to change the protocol. A PoS sidechain is just a tool that nodes can use to agree on certain things.

Secondly this will centralize bitcoin to whoever is "richest" and also is willing to risk participating in a centralized sidechain.
Not to mention that PoS itself is severely flawed since it can be manipulated by someone with a large amount of money.

How would it be more centralized than the actual system where most people don't even participate in the process of validating new blocks? Could we say the same about PoW and the hashrate?

Since almost 100% of bitcoin hodlers are not mining it

Then who are all these miners? Are they coming from outer space?

I totally agree with you, with a PoS sidechain miners could retain their voting power by holding their coins so what should they be afraid of?

The "problem" is that when a miner that has the actual hashrate connects to a pool that doesn't have any hashrate, they don't have any control over what they mine. To solve this problem all we have to do is to change the pool protocol not bitcoin.
There are also proposals in that regard like better-hash that I've mentioned in this topic long ago.

OK, I doubt it can work unless we keep changing the algorithms all the time but I might be wrong.

[Wind_FURY]

Or why not just create a PoS sidechain and let the hodlers reject a fork if they are not satisfied with it? Since almost 100% of bitcoin hodlers are not mining it, how would that be less fair? How would that be against bitcoin's principles (from what we know communicating info outside the blockchain isn't forbidden)? Did propose the idea on this forum but the devs didn't seem to like it (or understand it)..

The sidechain proposal bad enough, you had to make it a “POS sidechain”. Research Nothing at Stake attacks. It’s a theory that signers of blocks are incetivized to sign blocks in all forks because it doesn’t cost stakers anything. Big security flaw.

OP's post is right on time. There's no easy way to solve the large mining pools problem but there is an easy way to flip things and make the miners work for the hodlers rather than the opposite. BTC is losing momentum in the crypto market as we speak, maybe the devs will come up with something before it's too late...

Start by implementing BetterHash. It doesn’t “fix” pooling, but mining pools lose political influence on the network.

[topcoin360]

The sidechain proposal bad enough, you had to make it a “POS sidechain”. Research Nothing at Stake attacks. It’s a theory that signers of blocks are incetivized to sign blocks in all forks because it doesn’t cost stakers anything. Big security flaw.

You're just proving my point, my concept was misunderstandood. The DApp I was talking about is a tool to calculate the economic weight of each node (which ultimately has the final say anyway). An attacker would need 51% of the votes to successfully reorg the blockchain which would be a dumb thing to do if you have such amount of holdings. That's my game theory and I think it makes sense.

[zeuner]

People tend to be greedy, and care more for their mining reward than for having a vote.

Nothing prevents miners to survey the pool operators on how they have the pool software vote (e.g. when there is a fork ahead), and decide whether they want to contribute their mining power. Sadly, most people don't care, and I doubt this is a problem that can be solved by technology.

[Wind_FURY]

The sidechain proposal bad enough, you had to make it a “POS sidechain”. Research Nothing at Stake attacks. It’s a theory that signers of blocks are incetivized to sign blocks in all forks because it doesn’t cost stakers anything. Big security flaw.

You're just proving my point, my concept was misunderstandood. The DApp I was talking about is a tool to calculate the economic weight of each node (which ultimately has the final say anyway). An attacker would need 51% of the votes to successfully reorg the blockchain which would be a dumb thing to do if you have such amount of holdings. That's my game theory and I think it makes sense.

It’s still the same debate. The biggest holders of the coin can unite, and become a “Staking Cartel”, or if an exchange is hacked, and 51% of coins are stolen by a hacker, the Nothing at Stake attack holds because it will not cost anything. Research Vericoin.

BUT penalizing bad actors should disincentivize it. We wait for Ethereum’s implementation of POS.

[ABCbits]

Nothing prevents miners to survey the pool operators on how they have the pool software vote (e.g. when there is a fork ahead), and decide whether they want to contribute their mining power.

Pool software vote? If you actually mean pool mining protocol (such as stratum V2), i doubt such feature is exist. Miner usually just choose mining software (which uses stratum V2 protocol) and enter some personal detail (e.g. cryptocurrency address and pool website URL).

It’s still the same debate. The biggest holders of the coin can unite, and become a “Staking Cartel”, or if an exchange is hacked, and 51% of coins are stolen by a hacker, the Nothing at Stake attack holds because it will not cost anything. Research Vericoin.

Even worse, exchange use the deposited coin to gain "free" voting power. An example on steemit, https://www.binance.com/en/blog/421499824684900453/A-Letter-to-the-STEEM-Community.

[topcoin360]

It’s still the same debate. The biggest holders of the coin can unite, and become a “Staking Cartel”, or if an exchange is hacked, and 51% of coins are stolen by a hacker, the Nothing at Stake attack holds because it will not cost anything. Research Vericoin.

BUT penalizing bad actors should disincentivize it. We wait for Ethereum’s implementation of POS.

There is no "Nothing at Stake attack" when you own 51% of the supply. If the value of BTC drops down to zero then you lose all your wealth. A fork might be necessary (hard fork/soft fork whatever) before ethereum DESTROYS bitcoin. Red flags have been sent recently (thinking of Tesla...), wonder when bitcoin will be a real cryptocurrency.

Pool software vote? If you actually mean pool mining protocol (such as stratum V2), i doubt such feature is exist. Miner usually just choose mining software (which uses stratum V2 protocol) and enter some personal detail (e.g. cryptocurrency address and pool website URL).

It’s still the same debate. The biggest holders of the coin can unite, and become a “Staking Cartel”, or if an exchange is hacked, and 51% of coins are stolen by a hacker, the Nothing at Stake attack holds because it will not cost anything. Research Vericoin.

Even worse, exchange use the deposited coin to gain "free" voting power. An example on steemit, https://www.binance.com/en/blog/421499824684900453/A-Letter-to-the-STEEM-Community.

With a PoS sidechain, hodlers would have to understand that they trust their exchange to vote on their behalf if they leave their coins on the exchange. Well, I guess they already trust their exchange if they leave their coins on the exchange so I don't see where is the problem.. the transaction fees maybe? Is it something that is going to be fixed anytime soon?

[Wind_FURY]

It’s still the same debate. The biggest holders of the coin can unite, and become a “Staking Cartel”, or if an exchange is hacked, and 51% of coins are stolen by a hacker, the Nothing at Stake attack holds because it will not cost anything. Research Vericoin.

BUT penalizing bad actors should disincentivize it. We wait for Ethereum’s implementation of POS.

There is no "Nothing at Stake attack" when you own 51% of the supply. If the value of BTC drops down to zero then you lose all your wealth.

Nothing at Stake means that it doesn’t cost anything for stakers to sign blocks and continue all forked chains side by side with the real chain. Miners can’t do this in Proof of Work.

A fork might be necessary (hard fork/soft fork whatever) before ethereum DESTROYS bitcoin. Red flags have been sent recently (thinking of Tesla...), wonder when bitcoin will be a real cryptocurrency.

Hahaha Ethereum destroy Bitcoin? Bitcoin will OUTLIVE Ethereum as a multi-generational protocol.

[zeuner]

Nothing prevents miners to survey the pool operators on how they have the pool software vote (e.g. when there is a fork ahead), and decide whether they want to contribute their mining power.

Pool software vote? If you actually mean pool mining protocol (such as stratum V2), i doubt such feature is exist. Miner usually just choose mining software (which uses stratum V2 protocol) and enter some personal detail (e.g. cryptocurrency address and pool website URL).

Pool operators "vote" for their preferred blockchain future, e.g. they do when there is a threshold triggered fork ahead.

In effect, pool users vote because they choose which pool's URL they enter into their mining software.

As long as mining pool users are to lazy or greedy to wield this power they already have, what is the point of introducing protocols that facilitate the process?

[zeuner]

Pool software vote? If you actually mean pool mining protocol (such as stratum V2), i doubt such feature is exist. Miner usually just choose mining software (which uses stratum V2 protocol) and enter some personal detail (e.g. cryptocurrency address and pool website URL).

Pool operators "vote" for their preferred blockchain future, e.g. they do when there is a threshold triggered fork ahead.

In effect, pool users vote because they choose which pool's URL they enter into their mining software.

So you basically suggest pool operator to create multiple URL to see what their user prefer and user can choose/change the URL on their mining software to make a vote (which may/may not honored by operator)?

The most obvious choice for pool users would be to just switch to another pool when being in disagreement with the pool operator's choice.

Indeed, a possible next step for pool operators who do not want to dictate fork-related decisions would be to provide multiple URLs and let users make a choice without switching the pool. But thinking about this more deeply (e.g. about how to make it transparent enough for users to see whether their vote is being honoured) would only make sense when users are willing to engage in the first step, actively deciding what pool's vote they want to support with their mining power.

As long as mining pool users are to lazy or greedy to wield this power they already have, what is the point of introducing protocols that facilitate the process?

Or don't understand proposed network upgrade and the pros/cons of the network upgrade.

When the Bitcoin XT choice was to be made through block tagging, there were many opinions around regarding the pros and cons. Still, people said it was the decision of the big mining pools. My conclusion is that users are not sufficiently aware of their own democratic role in the Bitcoin ecosystem.