Private miners, a ticket to getting faster transaction confirmations

[DubemIfedigbo001]

So far, I know that when bitcoin transactions are initiated it goes into the mempool and stays there long enough for miners to include it in their blocks to be confirmed. The length of time it spends there is unpredictable, especially if the fees aren't high enough to interest greedy miners towards its inclusion. This really discourages lots of people from using the network. sometimes I encourage clients to make payments to me through bitcoin, but a lot of them reject my requests because of this very reason of unpredictability of transactions confirmation time.

Recently, i was thinking of a way around this to hasten transactions possibly for regions that accept bitcoin, and more importantly for companies who intend or are already accepting the coin within a locality. I think they can come together and create a union or group, purchase hardwares and get their own miners and have them join mining pools to share resources and minimize costs. These private miners are left with the responsibilities of immediately including transactions from their hosts which the hash will be sent directly to them in the next block to be confirmed. now the companies concerned can assure clients of less than 30 minutes of transaction confirmation or thereabout.

I really think this will boost user's confidence and trigger mass adoption in many localities as the complexities of these transactions are now reduced to the barest minimum. these private miners still participate in general activities for profitability and covering operation costs, but are made to prioritize transactions from their hosts. this might still mean good business opportunity for the companies concerned because others will still want to join in the future and they profit from the expansion alongside their activities. I admit that many companies offer transaction accelerations like viaBTC, but their fees are so high and not readily affordable. My thoughts are with grassroot implementations and more bitcoin adoption. I am also aware of governmental   taxes, but I'm convinced that proceeds from the mining activities can cover for those and keep the business on the profit side.

         Here is an image to clarify my explanation

         WITHOUT PRIVATE MINERS


                                                      VS

         WITH PRIVATE MINERS




what do you think would be major constraints?, I will appreciate your thoughts on this

[Findingnemo]

People are not ready to pay in Bitcoin because the confirmation time is unknown.

Your suggestion to resolve is to increase the miners on the network so block can be found soon, is this what you are trying to say right?

You need to understand no matter how much hash power we increase on the network the probability of finding the block is still gonna be random but on an average miners find a block in 10 minutes and this will remains same no matter what so your suggestion is not going to help anything but waste the mining resources.

The actual suggestion can be adopting the LN so payments can be instant and cheap as well.

[Charles-Tim]

I think they can come together and create a union or group, purchase hardwares and get their own miners and have them join mining pools to share resources and minimize costs.

I do not understand your solution but I know it is not a solution. There will be nothing called private or public miners. Miners are miners.

If you want cheap fee and fast bitcoin transaction, you can always have just small amount of coins on lightning network. If you do not want to open channel, you can use wallets that have channels and all you have to do is to just do the backup of the wallet and start generating invoices for payments.

Encourage them to use lightning network. Having like $50 on lightning network is not bad. If you have spent it finish, or before it is finished, you can fund it again.

[DubemIfedigbo001]

Your suggestion to resolve is to increase the miners on the network so block can be found soon, is this what you are trying to say right?

Yeah, but kind of private approach to the increment

You need to understand no matter how much hash power we increase on the network the probability of finding the block is still gonna be random but on an average miners find a block in 10 minutes and this will remains same no matter what so your suggestion is not going to help anything but waste the mining resources.

I once had a transaction that took almost a week and was never confirmed, then I successfully got acceleration service from viaBTC and it got confirmed in less than an hour, now please educate me, isn't that a private mining service that got my transactions confirmed at such a limited time, and if this private service which I sent my transaction hash to included mine to their mining block at such limited time, is it not worth implementing locally to help host of others on the network?

The actual suggestion can be adopting the LN so payments can be instant and cheap as well.

I know really well about this, but a lot of negativities surrounds it, have read so many writeups discouraging it owing to errors and so on and I see only a few people, If at all using it. What is its accuracy compared to normal transaction network?

[Husires]

mempool.space will launch a bitcoin accelerator service, and its idea is close to what you are trying to say.

If you have a transaction with low fees, you can accelerate it with them and pay fees using on/off-chain methods, such as top up your account using bitcoin, paying through PayPay or your bank account, and speed up your transaction. I think they have a partnership with the Foundry USA mining pool, which has about 27% of the hashrate. Therefore, the chance that they will mine a block every hour is approximately an average of two blocks every hour. Therefore, your transaction with it will definitely has 1 confirmation whatever its fees were bad, on average, 30 minutes in the worst case.

[DubemIfedigbo001]

If you have spent it finish, or before it is finished, you can find it again.

Could you please throw more lights on this?. I got really lost here

[Charles-Tim]

mempool.space will launch a bitcoin accelerator service, and its idea is close to what you are trying to say.

Will launch or has launched? I have tried to use it for many weeks but I was not granted permission and I no more visit my account on the site. With what We noticed that time, the fee is as expensive as other paid accelerators.

Could you please throw more lights on this?. I got really lost here

My bad. Typo. I mean 'fund it again'.

[mocacinno]

EDIT: i missed a zero in my calculation... Look at Stompix's post further down, but basically everything would cost a tenfold more than what i calculated

I do get what you say... But it is impractical...
Nobody is stopping big payment processors to already do this on a technical level. On a practical level, however, the cost would be enormous.

if you look here:
https://en.bitcoin.it/wiki/Difficulty

you'll see the time (in seconds) to mine one block can be calculated by this formula:

Code:

time = difficulty * 2**32 / hashrate

Let's say we want at least 2 blocks a day, since we're a big payment processor... This means that we have a time of 43200 (half a day). The current diff is 83.947.913.181.362

Code:

43200 = 83.947.913.181.362 * 2**32 / hashrate

You'd need ASICs whose combined hashrate is about 8.346.146.798.180.488.581 hashes per second.

Since the common prefix for counting hashrate is "Terra", let's round it down to 8.346.146 Terrahash per second.

An Bitmain Antminer S21 Hyd (335Th) seems to be the current fastest ASIC. It hashes @ 335Th/second, so you'd need 2.350 machines like this, running 24/7. (not including the fact you'll need a couple hundred spares).
One machine costs $4,200 and pulls 5400 Watts out of the socket.
The total investment for a big company to mine 2 blocks each day would be about 10 million USD and they would draw 304.560.000 killowatt hour per day. That's 304 Megawatt hour. I asked chatgpt about "normal" western european prices per megawatt hour (wholesale), and it said $30 to $80, but in peak periods $100 or more wasn't an exception, so your electricity costs would be ~$50*304 per day (=~$15.000)

Sure, they'll get a discount, but that $4200 is not including taxes, shipping and handling, datacenter, racks, cooling, personel,... I'm not going to go into those, but to house 2350 ASIC's, you need a lot of racks. It has a height of 41 cm. A standard rack can handle about 180 cmd of material, so 4 ASIC's per rack. Let's assume a non-standard one that handles 5... You'll need a datacenter fit to have 470 racks. You'll need a massive amount of cooling since you're burning 304 Megawat hour per day, you'll need a dedicated team of at least 4 or 5 techs to have an on call system,....

I'm not even going into details about the fact that if enough companys would start a "private mining" farm, they would push the difficulty upwards and they'd have to add more hardware each month just to keep hitting 2 blocks per day.

Now, for sure, you would get mining rewards aswell... So you'd make money... The point is: they are payment providers (or other big companys transacting in BTC). They're not interested in starting a mining farm that would cost them millions to setup just to make sure their clients can get fast confirmations whilst cheaping out on the fees... They just want their clients to pay a high enough fee so "normal" mining farms have an incentive to add the transactions to a block they try to solve.

[Mia Chloe]

I once had a transaction that took almost a week and was never confirmed, then I successfully got acceleration service from viaBTC and it got confirmed in less than an hour, now please educate me, isn't that a private mining service that got my transactions confirmed at such a limited time, and if this private service which I sent my transaction hash to included mine to their mining block at such limited time, is it not worth implementing locally to help host of others on the network?

This is where a lot of people get it wrong. Mining is very dependent on hash power. Therefore solo miners have very tiny chances of being able to influence a block like quickly confirm a transaction especially  if the fee is high.This is part of the reasons why miners come together to form a mining pool where they can be able to combine their hash rates as they mine making it  easier for them to influence a block like rapidly confirm transactions.
So it doesn't work as if any miner can just pick up his gear and start confirming transactions immediately they are made. Because without a nice hash rate which only few solo miners have, confirming transactions isn't that easy. However with a mining pool these miners can conjoin has power and mine so when the successfully finds nonce that fits the block they can then share the reward based on the cryptographic effort they put into successfully mining the block.

[Findingnemo]

You need to understand no matter how much hash power we increase on the network the probability of finding the block is still gonna be random but on an average miners find a block in 10 minutes and this will remains same no matter what so your suggestion is not going to help anything but waste the mining resources.

I once had a transaction that took almost a week and was never confirmed, then I successfully got acceleration service from viaBTC and it got confirmed in less than an hour, now please educate me, isn't that a private mining service that got my transactions confirmed at such a limited time, and if this private service which I sent my transaction hash to included mine to their mining block at such limited time, is it not worth implementing locally to help host of others on the network?

Every miner can include whatever transactions from the mempool in the block they find but generally miners prioritise the TXs based on fee used so the waiting time depending on the fee used for the transaction and mempool status. What you did is not private mining, viabtc holds decent amount in the hashrate so they just gave 100 free TXs per hour to be accelerated and this also done just to promote their paid acceleration services.

[stompix]

Since the common prefix for counting hashrate is "Terra", let's round it down to 8.346.146 Terrahash per second.

An Bitmain Antminer S21 Hyd (335Th) seems to be the current fastest ASIC. It hashes @ 335Th/second, so you'd need 2.350 machines like this, running 24/7. (not including the fact you'll need a couple hundred spares).
One machine costs $4,200 and pulls 5400 Watts out of the socket.

I was looking for this..
But you missed a zero, you would need 24 000 S21Hydro for 2 blocks a day!

OP wants 2 blocks per hour for a 30 minutes confirmation so he will need 30% of the total hashrate, which means he must come up with 300Exahash (600 current plus his hashrate) ,so he "just" needs 1,5 million S21 (air cooled 200th/s) which after assuming a 10% discount just.....7.5 billions!!!!!

[mocacinno]

Since the common prefix for counting hashrate is "Terra", let's round it down to 8.346.146 Terrahash per second.

An Bitmain Antminer S21 Hyd (335Th) seems to be the current fastest ASIC. It hashes @ 335Th/second, so you'd need 2.350 machines like this, running 24/7. (not including the fact you'll need a couple hundred spares).
One machine costs $4,200 and pulls 5400 Watts out of the socket.

I was looking for this..
But you missed a zero, you would need 24 000 S21Hydro for 2 blocks a day!

OP wants 2 blocks per hour for a 30 minutes confirmation so he will need 30% of the total hashrate, which means he must come up with 300Exahash (600 current plus his hashrate) ,so he "just" needs 1,5 million S21 (air cooled 200th/s) which after assuming a 10% discount just.....7.5 billions!!!!!

Whoops... Missing a zero does sound like something i'd do... In hindsight, your re-calculations do sound more plausible, given the block reward and current exchange rate my calculations would have been impossible because 2 blocks would give a block reward of 2x6.25BTC = $840.000. It would have only taken ~12 days to break even (not including many factors like spare parts, power, datacenter, personel,... But still, the ROI time would have been waaaaaay to short).

[pooya87]

Your idea sounds cool but it is missing an important part: the incentive.

You see miners choose transactions with highest fee to maximize their income, what you are suggesting is going to reduce their income. Depending on the scale of this operation it could be a lot of missed income (like if they handle a lot of transactions from a lot of businesses).
Why should they do this and what will they get in return?

The only "free" accelerator that I know exists is ViaBtc and they are accepting a very small number of txs and there is a min fee and they do it as an advertisement for their brand (the pool, the exchange, the shittoken, their investment plans, their wallet, etc.) since it is attracting traffic to their site where visitors are exposed to these extra stuff.
Hence the incentive.

[cryptosize]

Your idea sounds cool but it is missing an important part: the incentive.

You see miners choose transactions with highest fee to maximize their income, what you are suggesting is going to reduce their income. Depending on the scale of this operation it could be a lot of missed income (like if they handle a lot of transactions from a lot of businesses).
Why should they do this and what will they get in return?

Because "reasons" (Ocean pool supporters)...

Let's just say some people don't really understand Economics, even though they're Bitcoiners (even worse if they're long-time ones).

[cryptosize]

So far, I know that when bitcoin transactions are initiated it goes into the mempool and stays there long enough for miners to include it in their blocks to be confirmed. The length of time it spends there is unpredictable, especially if the fees aren't high enough to interest greedy miners towards its inclusion. This really discourages lots of people from using the network. sometimes I encourage clients to make payments to me through bitcoin, but a lot of them reject my requests because of this very reason of unpredictability of transactions confirmation time.

Recently, i was thinking of a way around this to hasten transactions possibly for regions that accept bitcoin, and more importantly for companies who intend or are already accepting the coin within a locality. I think they can come together and create a union or group, purchase hardwares and get their own miners and have them join mining pools to share resources and minimize costs. These private miners are left with the responsibilities of immediately including transactions from their hosts which the hash will be sent directly to them in the next block to be confirmed. now the companies concerned can assure clients of less than 30 minutes of transaction confirmation or thereabout.

I really think this will boost user's confidence and trigger mass adoption in many localities as the complexities of these transactions are now reduced to the barest minimum. these private miners still participate in general activities for profitability and covering operation costs, but are made to prioritize transactions from their hosts. this might still mean good business opportunity for the companies concerned because others will still want to join in the future and they profit from the expansion alongside their activities. I admit that many companies offer transaction accelerations like viaBTC, but their fees are so high and not readily affordable. My thoughts are with grassroot implementations and more bitcoin adoption. I am also aware of governmental   taxes, but I'm convinced that proceeds from the mining activities can cover for those and keep the business on the profit side.

What you're suggesting could have unintended consequences...

For example, someone who has contacts with the "private miner" could send BTC of questionable origins and try to eliminate traces in the blockchain by producing a new coinbase transaction with clean coins.

I also remember someone setting an exorbitant amount of fees (fat finger mistakes can happen, but highly unlikely when you send large amounts of money).

Rumors say that North Korea already has a "private miner" (secret pool) occasionally laundering tainted BTC. Technically it's a clever way to exploit the protocol (even better than mixing), legal-wise it would get you in a lot of trouble.

If you want reduced BTC fees, try to send BTC during the weekends (single digit/sat blocks) and/or use LN.

[Zaguru12]

Recently, i was thinking of a way around this to hasten transactions possibly for regions that accept bitcoin, and more importantly for companies who intend or are already accepting the coin within a locality. I think they can come together and create a union or group, purchase hardwares and get their own miners and have them join mining pools to share resources and minimize costs. These private miners are left with the responsibilities of immediately including transactions from their hosts which the hash will be sent directly to them in the next block to be confirmed. now the companies concerned can assure clients of less than 30 minutes of transaction confirmation or thereabout.

Faster transaction isn’t only about fees only it also depends on the miners hash power to be able to beat other miners in trying to get the block target. The 30 minutes can still be more before your pool gets to mine a block. The thing is having more power to solve the puzzle and with your suggestions there won’t be much incentive too for the miners to increase their power.

For example, someone who has contacts with the "private miner" could send BTC of questionable origins and try to eliminate traces in the blockchain by producing a new coinbase transaction with clean coins.

I also remember someone setting an exorbitant amount of fees (fat finger mistakes can happen, but highly unlikely when you send large amounts of money).

Rumors say that North Korea already has a "private miner" (secret pool) occasionally laundering tainted BTC. Technically it's a clever way to exploit the protocol (even better than mixing), legal-wise it would get you in a lot of trouble.

If you want reduced BTC fees, try to send BTC during the weekends (single digit/sat blocks) and/or use LN.

There is nothing like a tainted coin on the bitcoin network. Once the transaction meets the requirements set by the network protocol. The transaction is verified by the nodes, so even if you control more than the 51% percent needed for attack you still need to include the right transaction which meets the protocol requirements and not just any transaction

[cryptosize]

There is nothing like a tainted coin on the bitcoin network. Once the transaction meets the requirements set by the network protocol. The transaction is verified by the nodes, so even if you control more than the 51% percent needed for attack you still need to include the right transaction which meets the protocol requirements and not just any transaction

I know how the protocol works, but I was talking from a legal perspective.

Imagine that you pay X BTC to someone and then he tries to deposit it to a CEX, because he wants to liquidate it... you're gonna get into trouble if it's deemed to be tainted by AML.

[pooya87]

Let's just say some people don't really understand Economics, even though they're Bitcoiners (even worse if they're long-time ones).

Sometimes when you are focusing on a problem and from one angle, it is easy to miss the bigger picture and other angles. It is not necessarily about understanding economics or not.

Rumors say that North Korea already has a "private miner" (secret pool) occasionally laundering tainted BTC. Technically it's a clever way to exploit the protocol (even better than mixing), legal-wise it would get you in a lot of trouble.

The bold parts are wrong terms you are using. There is no such thing as "tainted bitcoins" and if you are using any method to mix your coins it is not called "laundering" nor is it "exploiting the protocol".

The concept of "tainted coins" is a fake concept started by those who are against bitcoin and privacy and as an attack on Bitcoin. It only affects centralized services in certain jurisdiction where such basic citizen right violation laws are being enforced. It doesn't affect Bitcoin.

[ABCbits]

I get your idea, but this is wrong approach. If you want fast confirmation, you should set relative high fee rate (compared with other TX in mempool). It can be done by either using wallet with either good fee recommendation or let you setting fee manually (where you decide fee after checking mempool data on mempool.space or similar website). With that, you can avoid waiting for hours to weeks.

Your idea sounds cool but it is missing an important part: the incentive.

You see miners choose transactions with highest fee to maximize their income, what you are suggesting is going to reduce their income. Depending on the scale of this operation it could be a lot of missed income (like if they handle a lot of transactions from a lot of businesses).
Why should they do this and what will they get in return?

Because "reasons" (Ocean pool supporters)...

Let's just say some people don't really understand Economics, even though they're Bitcoiners (even worse if they're long-time ones).

Or maybe those who mine on Ocean can afford to be idealistic.

[cryptosize]

The bold parts are wrong terms you are using. There is no such thing as "tainted bitcoins" and if you are using any method to mix your coins it is not called "laundering" nor is it "exploiting the protocol".

By exploiting the protocol I meant generating a new coinbase transaction with new coins that have zero traces/history. I wasn't talking about mixing.

I know the protocol doesn't have feelings, but governments do...

The concept of "tainted coins" is a fake concept started by those who are against bitcoin and privacy and as an attack on Bitcoin. It only affects centralized services in certain jurisdiction where such basic citizen right violation laws are being enforced. It doesn't affect Bitcoin.

You missed this post:

There is nothing like a tainted coin on the bitcoin network. Once the transaction meets the requirements set by the network protocol. The transaction is verified by the nodes, so even if you control more than the 51% percent needed for attack you still need to include the right transaction which meets the protocol requirements and not just any transaction

I know how the protocol works, but I was talking from a legal perspective.

Imagine that you pay X BTC to someone and then he tries to deposit it to a CEX, because he wants to liquidate it... you're gonna get into trouble if it's deemed to be tainted by AML.

Don't assume that everyone wants to hodl BTC in their wallet. Some people will want to liquidate it for fiat.