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From: Jeremy <jlrubin@mit.edu>
Date: Sun, 12 Dec 2021 17:31:42 -0800
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Cc: Bitcoin development mailing list <bitcoin-dev@lists.linuxfoundation.org>
Subject: Re: [bitcoin-dev] [Bitcoin Advent Calendar] Decentralized
 Coordination Free Mining Pools
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Hey there!

Thanks for your response!

One of the reasons to pick a longer window of, say, a couple difficulty
periods would be that you can make participation in the pool hedge you
against hashrate changes.

You're absolutely spot on to think about the impact of pooling w.r.t.
variance when fees > subsidy. That's not really in the analysis I had in
the (old) post, but when the block revenues swing, dcfmp over longer
periods can really smooth out the revenues for miners in a great way. This can
also help with the "mind the gap" problem when there isn't a backlog of
transactions, since producing an empty block still has some value (in order
to incentivize mining transaction at all and not cheating, we need to
reward txn inclusion as I think you're trying to point out.

Sadly, I've read the rest of your email a couple times and I don't really
get what you're proposing at all. It jumps right into "things you could
compute". Can you maybe try stating the goals of your payout function, and
then demonstrate how what you're proposing meets that? E.g., we want to pay
more to miners that do x?

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<div dir=3D"ltr"><div dir=3D"ltr"><div class=3D"gmail_default" style=3D"fon=
t-family:arial,helvetica,sans-serif;font-size:small;color:rgb(0,0,0)">Hey t=
here!</div><div class=3D"gmail_default" style=3D"font-family:arial,helvetic=
a,sans-serif;font-size:small;color:rgb(0,0,0)"><br></div><div class=3D"gmai=
l_default" style=3D"font-family:arial,helvetica,sans-serif;font-size:small;=
color:rgb(0,0,0)">Thanks for your response!</div></div><div class=3D"gmail_=
quote"><div dir=3D"ltr" class=3D"gmail_attr"><br></div><div class=3D"gmail_=
attr"><span style=3D"color:rgb(0,0,0);font-family:arial,helvetica,sans-seri=
f"><span class=3D"gmail_default" style=3D"font-family:arial,helvetica,sans-=
serif;font-size:small;color:rgb(0,0,0)">One of the reasons to pick a longer=
 window of, say, a couple difficulty periods would be that you can make par=
ticipation in the pool hedge you against hashrate changes.</span></span></d=
iv><div class=3D"gmail_attr"><span class=3D"gmail_default" style=3D"color:r=
gb(0,0,0);font-family:arial,helvetica,sans-serif"><br></span></div><div cla=
ss=3D"gmail_attr"><span class=3D"gmail_default" style=3D"color:rgb(0,0,0);f=
ont-family:arial,helvetica,sans-serif">You&#39;re absolutely spot on to thi=
nk about the impact of pooling w.r.t. variance when fees &gt; subsidy. That=
&#39;s not really in the analysis I had in the (old) post, but when the blo=
ck revenues swing, dcfmp over longer periods can really smooth out the reve=
nues for miners in a great way. This=C2=A0</span><span class=3D"gmail_defau=
lt" style=3D"color:rgb(0,0,0);font-family:arial,helvetica,sans-serif"></spa=
n><span style=3D"color:rgb(0,0,0);font-family:arial,helvetica,sans-serif"><=
span class=3D"gmail_default" style=3D"font-family:arial,helvetica,sans-seri=
f;font-size:small;color:rgb(0,0,0)">can also help with the &quot;mind the g=
ap&quot; problem when there isn&#39;t a backlog of transactions, since prod=
ucing an empty block still has some value (in order to incentivize mining t=
ransaction at all and not cheating, we need to reward txn inclusion as I th=
ink you&#39;re trying to point out.</span></span></div><div class=3D"gmail_=
attr"><span style=3D"color:rgb(0,0,0);font-family:arial,helvetica,sans-seri=
f"><span class=3D"gmail_default" style=3D"font-family:arial,helvetica,sans-=
serif;font-size:small;color:rgb(0,0,0)"><br></span></span></div><div class=
=3D"gmail_attr"><span style=3D"color:rgb(0,0,0);font-family:arial,helvetica=
,sans-serif"><span class=3D"gmail_default" style=3D"font-family:arial,helve=
tica,sans-serif;font-size:small;color:rgb(0,0,0)">Sadly, I&#39;ve read the =
rest of your email a couple times and I don&#39;t really get what you&#39;r=
e proposing at all. It jumps right into &quot;things you could compute&quot=
;. Can you maybe try stating the goals of your payout function, and then de=
monstrate how what you&#39;re proposing meets that? E.g., we want to pay mo=
re to miners that do x?</span></span></div><div class=3D"gmail_attr"><span =
style=3D"color:rgb(0,0,0);font-family:arial,helvetica,sans-serif"><span cla=
ss=3D"gmail_default" style=3D"font-family:arial,helvetica,sans-serif;font-s=
ize:small;color:rgb(0,0,0)"><br></span></span></div><div class=3D"gmail_att=
r"><span style=3D"color:rgb(0,0,0);font-family:arial,helvetica,sans-serif">=
<span class=3D"gmail_default" style=3D"font-family:arial,helvetica,sans-ser=
if;font-size:small;color:rgb(0,0,0)"></span></span></div><div dir=3D"ltr" c=
lass=3D"gmail_attr"><br></div><blockquote class=3D"gmail_quote" style=3D"ma=
rgin:0px 0.8ex;border-left-width:1px;border-left-style:solid;border-left-co=
lor:rgb(204,204,204);border-right-width:1px;border-right-style:solid;border=
-right-color:rgb(204,204,204);padding-left:1ex;padding-right:1ex"><blockquo=
te style=3D"margin-left:7px;border-left-width:2px;border-left-style:solid;b=
order-left-color:orange;padding-left:8px"><div dir=3D"ltr"><div><div dir=3D=
"ltr"><div dir=3D"ltr"></div>
</div>
</div>
</div>
</blockquote>
</blockquote></div></div>

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