Subject: Re: [Bitcoin-development] libzerocoin released, what about a zerocoin-only alt-coin with either-or mining

From: "Luke-Jr" <[email-masked]>
Date: Sun, 14 Jul 2013 19:33:06 +0000

On Sunday, July 14, 2013 7:22:10 PM John Dillon wrote:
> > Merged mining is not mining the coin for free. The total reward (ie
> > btc + frc + nmc + dvc) should tend to equal the mining costs. But the
> > value comes from demand, not costs. So if people demand it more it
> > price will rise no matter how is mined. And if the price rises it will
> > make sense to spend more on mining.
> 
> Merge mining is very much mining a coin for free. Ask not what the total
> reward is, ask that the marginal cost of merge mining an additional coin
> is.

But the total reward is what mining will tend toward equalizing in costs.
In any case, the cryptocurrencies are neutral to cost of mining, or perhaps 
even benefit from it being as cheap as possible: if it's cheaper to mine, you 
can get an even higher difficulty/security out of it.

> The issue is that unless there is a cost to mining a *invalid* block
> the merge mined coin has little protection from miners who mine invalid
> blocks, either maliciously or through negligence. If the coin isn't worth
> much, either because it's market value is low or the worth is negative to
> the malicious miner, your theories of value have nothing to do with the
> issue.

Invalid blocks are rejected by validating clients in all circumstances.

I suspect you may mean a block that doesn't include transactions you want 
confirmed. In that case, you must not be paying sufficient fees for the miner 
to consider it worth their time, or must be doing something the miner 
considers fundamentally objectionable (in which case they won't be satisfied 
by any fee). But these miners, unless they are able to acquire over 50% of the 
hashrate (in which case the cryptocoin is compromised), are not the only ones 
mining blocks, and if another miner accepts your transactions there is no 
issue.

Luke