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Date: Thu, 19 Jun 2014 13:11:44 -0400
From: Kevin <kevinsisco61784@gmail.com>
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Subject: Re: [Bitcoin-development] BlockPow: A Practical Proposal to prevent
 mining pools AND reduce payoff variance:
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On 6/19/2014 12:58 PM, Sergio Lerner wrote:
>
> I propose a setting that prevent mining pools AND reduce payoff 
> variance which requires two changes: increasing the block-rate and 
> changing the Bitcoin PoW (but still allowing current Bitcoin ASICs to 
> work (as far as I know)). The block rate must be increased at least 20 
> times and block must still be near full (e.g. there must be at least 
> 20 more transactions/second than there is today)
>
> BlockPow is kind of PoW that only practically prevents mining pools 
> for certain cryptocurrency settings based on concepts similar to 
> parmacoin, but in a much simple degree. The idea is that if miners try 
> to join a pool, then they incur in overhead of transmitting 
> information and earn less than working solo. Let b (the payload) 
> contain a full block. b must contain all the transactions and the 
> header, and not only the transaction hashes. b should not hide 
> anything. Let h be the block header (which contains the previous block 
> hash and the Merkle tree root of the transactions). Let d be the 
> difficulty. hash-block-length(b) returns the number of blocks 
> processed by the hash function when fed with the block b. The target 
> is divided by hash-block-length(b) so that the difficulty does not 
> depend on the length of the block. Some other function can be used to 
> encourage nodes to add more or less transactions.
>
> Def: Basic BlockPoW concept
>
> For each r in the nonce-range: if H ( H( r || b ) || h || r) ) < 2^-d/ 
> hash-block-length(b) then return r
>
> return null
>
> The header (h) is appended to the hashed message to allow SPV clients 
> to verify the PoW without requiring the full block to be downloaded. 
> Peers can send only (x,r,h) to SPV nodes, where x = H( r || b ), so 
> they can verify the PoW. The verification procedure is obvious, and is 
> skipped here. r is inserted at the beginning of the message to prevent 
> pool administrators from keeping a secret mid-state of the hash 
> function secret in order to prevent block stealing and also to force 
> the miner to know b in the inner mining loop.
>
> So now mining requires the knowledge of the block b to be mined, and b 
> must be received at each block-chain epoch. This could create an 
> incentive not to include any transaction and use an almost empty b, 
> because that way the bandwidth requirements is decreased. But this 
> incentive should not exists normally, since by including transactions 
> the solo miner gets an additional revenue from fees, which is lost if 
> the block is empty. Anyway, to prevent this possible incentive we can 
> append to b a subset of previous blocks (e.g 100 blocks). The block 
> subset to include could be derived from a peudo-random function seeded 
> by the previous block hash. Then a node would still need to download 
> part or all the block-chain in order to mine.
>
> Now if the miner wants to be a dumb node and take part of a pool, then 
> the current working unsolved block (the template) must be sent each 
> time from the pool admin to each miner. If the pool admin hosts 1000 
> miners, then to serve them with fresh block templates he needs 1000 
> times more bandwidth that the miners, making this much more expensive. 
> If miners create another network topology to distribute templates, 
> they are incurring in the same overhead as being actively part of the 
> cryptocurrency network, so they gain nothing.
>
> For example, in a block-chain with a 5 seconds block-rate, such as in 
> NimbleCoin <http://nimbleCoin.org>, each block can be as large as 200 
> Kbytes (100 tps are allowed). A miner will require the block template 
> to be ready as fast as possible, say before 3 seconds, so as not to 
> loose more than 60% of the times the transaction fees present in the 
> block template. This means that a pool admin serving 1000 clients must 
> have a upload bandwidth of at least 60 Mbytes/sec, and load balance 
> servers, because all miners will demand the block template at the same 
> time and will compete for it.
>
> The same miner, working solo, will not loose the 60% of block fees. If 
> block fees are 10% of block reward, then solo miners earn 6% more than 
> pool miners. Also, having a block rate of 5 seconds allows solo miners 
> to receive payments more often and so it reduces the payment variance.
>
> This method to discourage mining pools only work as long as time is 
> takes to transmit a block is comparable to the block interval time, 
> e.g. 20%. This seems not to be a problem since if the cryptocurrency 
> becomes popular, then we can expect blocks to be near full, while if 
> is is not, then nobody will care about mining pools.
>
> For this method to work for Bitcoin, Bitcoin should reduce the block 
> rate to at least 1 minute, and keep blocks of at least 10 Mbytes. Or 
> go the NimbleCoin way, and reduce the block interval to 5 seconds. The 
> sole reduction of the block rate from 10 minutes to 5 seconds would 
> reduce notably the mining reward variance, which is the main reason 
> miners don't mine solo.
>
> BitcoinBlockPow
>
> The basic BlockPoW is incompatible with Bitcoin ASICs as is but it can 
> be made partially compatible with some tweaks: The value b is replaced 
> by a a a subset or an integrity check of the block.
>
> Using a subset:
>
> First the hashMerkleRoot and hashPrevBlock fields are replaced by the 
> fields: ChildBlock (32 bytes) and ScatteredBlockBytes (32 bytes). 
> ChildBlock is the hash of a message with stores the old hashMerkleRoot 
> and hashPrevBlock. ScatteredBlockBytes is a pseudo-random subset of 
> bytes taken from the block template being mined. The seed for the 
> pseudo-random function that selects the subset is  the hashMerkleRoot 
> plus the block time. When a miner scans all the 32bit nonce space, 
> then a new hashMerkleRoot must be created to increase the extra-nonce 
> field or the time must be updated. When this happens, a new subset of 
> pseudo-random 32 block bytes must be collected. If the miner only 
> stores 10% of the block template (e.g. 100 Kbytes instead of 1 Mbyte), 
> then the probability he can build the ScatteredBlockBytes by 
> brute-forcing the seed is 10^-32. If the miner performs 100 GH/sec, 
> then the 32-bit nonce will overflow every 20 msec and the miner could 
> request the ScatteredBlockBytes from the pool admin using a bandwidth 
> of 1 Kbyte/s. A pool hosting 6 PH/sec (such as Eligious, which has 8%) 
> would need to stream more than 60 Mb/s of ScatteredBlockBytes fields. 
> A mining pool having 50% would need to stream 500 Mb/s, which is quite 
> challenging. So miners will download the block normally, and become 
> active part of the network.
>
> Using an integrity check:
>
> ScatteredBlockBytes  is replaced by a field BlockHash defined as H( 
> full-block-with-zero-nonce ). Obviously the header must be at the 
> beginning of the block to force the re-hash.
>
> Best regards,
>  Sergio.
>
>
>
> ------------------------------------------------------------------------------
> HPCC Systems Open Source Big Data Platform from LexisNexis Risk Solutions
> Find What Matters Most in Your Big Data with HPCC Systems
> Open Source. Fast. Scalable. Simple. Ideal for Dirty Data.
> Leverages Graph Analysis for Fast Processing & Easy Data Exploration
> http://p.sf.net/sfu/hpccsystems
>
>
> _______________________________________________
> Bitcoin-development mailing list
> Bitcoin-development@lists.sourceforge.net
> https://lists.sourceforge.net/lists/listinfo/bitcoin-development
Why do you want to punish pools?


-- 
Kevin


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    <div class="moz-cite-prefix">On 6/19/2014 12:58 PM, Sergio Lerner
      wrote:<br>
    </div>
    <blockquote cite="mid:53A316BE.5040508@certimix.com" type="cite">
      <meta http-equiv="Context-Type" content="text/html;
        charset=ISO-8859-1">
      <p>I propose a setting that prevent mining pools AND reduce payoff
        variance which requires two changes: increasing the block-rate
        and changing the Bitcoin PoW (but still allowing current Bitcoin
        ASICs to work (as far as I know)). The block rate must be
        increased at least 20 times and block must still be near full
        (e.g. there must be at least 20 more transactions/second than
        there is today)<br>
      </p>
      <p>BlockPow is kind of PoW that only practically prevents mining
        pools for certain cryptocurrency settings based on concepts
        similar to parmacoin, but in a much simple degree. The idea is
        that if miners try to join a pool, then they incur in overhead
        of transmitting information and earn less than working solo. Let
        b (the payload) contain a full block. b must contain all the
        transactions and the header, and not only the transaction
        hashes. b should not hide anything. Let h be the block header
        (which contains the previous block hash and the Merkle tree root
        of the transactions). Let d be the difficulty.
        hash-block-length(b) returns the number of blocks processed by
        the hash function when fed with the block b. The target is
        divided by hash-block-length(b) so that the difficulty does not
        depend on the length of the block. Some other function can be
        used to encourage nodes to add more or less transactions.</p>
      <p><span data-mce-style="text-decoration: underline;">Def</span>:
        Basic BlockPoW concept<br>
      </p>
      <p>For each r in the nonce-range: if H ( H( r || b ) || h || r) )
        &lt; 2^-d/ hash-block-length(b) then return r</p>
      <p>return null</p>
      <p>The header (h) is appended to the hashed message to allow SPV
        clients to verify the PoW without requiring the full block to be
        downloaded. Peers can send only (x,r,h) to SPV nodes, where x =
        H( r || b ), so they can verify the PoW. The verification
        procedure is obvious, and is skipped here. r is inserted at the
        beginning of the message to prevent pool administrators from
        keeping a secret mid-state of the hash function secret in order
        to prevent block stealing and also to force the miner to know b
        in the inner mining loop.</p>
      <p>So now mining requires the knowledge of the block b to be
        mined, and b must be received at each block-chain epoch. This
        could create an incentive not to include any transaction and use
        an almost empty b, because that way the bandwidth requirements
        is decreased. But this incentive should not exists normally,
        since by including transactions the solo miner gets an
        additional revenue from fees, which is lost if the block is
        empty. Anyway, to prevent this possible incentive we can append
        to b a subset of previous blocks (e.g 100 blocks). The block
        subset to include could be derived from a peudo-random function
        seeded by the previous block hash. Then a node would still need
        to download part or all the block-chain in order to mine.</p>
      <p>Now if the miner wants to be a dumb node and take part of a
        pool, then the current working unsolved block (the template)
        must be sent each time from the pool admin to each miner. If the
        pool admin hosts 1000 miners, then to serve them with fresh
        block templates he needs 1000 times more bandwidth that the
        miners, making this much more expensive. If miners create
        another network topology to distribute templates, they are
        incurring in the same overhead as being actively part of the
        cryptocurrency network, so they gain nothing.</p>
      <p>For example, in a block-chain with a 5 seconds block-rate, such
        as in <a moz-do-not-send="true" href="http://nimbleCoin.org"
          data-mce-href="http://nimbleCoin.org">NimbleCoin</a>, each
        block can be as large as 200 Kbytes (100 tps are allowed). A
        miner will require the block template to be ready as fast as
        possible, say before 3 seconds, so as not to loose more than 60%
        of the times the transaction fees present in the block template.
        This means that a pool admin serving 1000 clients must have a
        upload bandwidth of at least 60 Mbytes/sec, and load balance
        servers, because all miners will demand the block template at
        the same time and will compete for it.</p>
      <p>The same miner, working solo, will not loose the 60% of block
        fees. If block fees are 10% of block reward, then solo miners
        earn 6% more than pool miners. Also, having a block rate of 5
        seconds allows solo miners to receive payments more often and so
        it reduces the payment variance.</p>
      <p>This method to discourage mining pools only work as long as
        time is takes to transmit a block is comparable to the block
        interval time, e.g. 20%. This seems not to be a problem since if
        the cryptocurrency becomes popular, then we can expect blocks to
        be near full, while if is is not, then nobody will care about
        mining pools.</p>
      <p>For this method to work for Bitcoin, Bitcoin should reduce the
        block rate to at least 1 minute, and keep blocks of at least 10
        Mbytes. Or go the NimbleCoin way, and reduce the block interval
        to 5 seconds. The sole reduction of the block rate from 10
        minutes to 5 seconds would reduce notably the mining reward
        variance, which is the main reason miners don't mine solo.<br>
      </p>
      <p>BitcoinBlockPow<br>
      </p>
      <p>The basic BlockPoW is incompatible with Bitcoin ASICs as is but
        it can be made partially compatible with some tweaks: The value
        b is replaced by a a a subset or an integrity check of the
        block.</p>
      <p>Using a subset: <br>
      </p>
      <p>First the hashMerkleRoot and hashPrevBlock fields are replaced
        by the fields: ChildBlock (32 bytes) and ScatteredBlockBytes (32
        bytes). ChildBlock is the hash of a message with stores the old
        hashMerkleRoot and hashPrevBlock. ScatteredBlockBytes is a
        pseudo-random subset of bytes taken from the block template
        being mined. The seed for the pseudo-random function that
        selects the subset is&nbsp; the hashMerkleRoot plus the block time.
        When a miner scans all the 32bit nonce space, then a new
        hashMerkleRoot must be created to increase the extra-nonce field
        or the time must be updated. When this happens, a new subset of
        pseudo-random 32 block bytes must be collected. If the miner
        only stores 10% of the block template (e.g. 100 Kbytes instead
        of 1 Mbyte), then the probability he can build the
        ScatteredBlockBytes by brute-forcing the seed is 10^-32. If the
        miner performs 100 GH/sec, then the 32-bit nonce will overflow
        every 20 msec and the miner could request the
        ScatteredBlockBytes from the pool admin using a bandwidth of 1
        Kbyte/s. A pool hosting 6 PH/sec (such as Eligious, which has
        8%) would need to stream more than 60 Mb/s of
        ScatteredBlockBytes fields. A mining pool having 50% would need
        to stream 500 Mb/s, which is quite challenging. So miners will
        download the block normally, and become active part of the
        network.<br>
      </p>
      <p>Using an integrity check:<br>
      </p>
      <p>ScatteredBlockBytes&nbsp; is replaced by a field BlockHash defined
        as H( full-block-with-zero-nonce ). Obviously the header must be
        at the beginning of the block to force the re-hash.<br>
      </p>
      <p>Best regards,<br>
        &nbsp;Sergio.<br>
      </p>
      <br>
      <fieldset class="mimeAttachmentHeader"></fieldset>
      <br>
      <pre wrap="">------------------------------------------------------------------------------
HPCC Systems Open Source Big Data Platform from LexisNexis Risk Solutions
Find What Matters Most in Your Big Data with HPCC Systems
Open Source. Fast. Scalable. Simple. Ideal for Dirty Data.
Leverages Graph Analysis for Fast Processing &amp; Easy Data Exploration
<a class="moz-txt-link-freetext" href="http://p.sf.net/sfu/hpccsystems">http://p.sf.net/sfu/hpccsystems</a></pre>
      <br>
      <fieldset class="mimeAttachmentHeader"></fieldset>
      <br>
      <pre wrap="">_______________________________________________
Bitcoin-development mailing list
<a class="moz-txt-link-abbreviated" href="mailto:Bitcoin-development@lists.sourceforge.net">Bitcoin-development@lists.sourceforge.net</a>
<a class="moz-txt-link-freetext" href="https://lists.sourceforge.net/lists/listinfo/bitcoin-development">https://lists.sourceforge.net/lists/listinfo/bitcoin-development</a>
</pre>
    </blockquote>
    Why do you want to punish pools?<br>
    <br>
    <br>
    <pre class="moz-signature" cols="72">-- 
Kevin
</pre>
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