Subject: Re: [bitcoin-dev] [Bitcoin Advent Calendar] Decentralized Coordination Free Mining Pools

From: Jeremy <[email-masked]>
Date: Tue, 14 Dec 2021 11:50:33 -0800

I've received some confused messages that whatever I was replying to didn't
come through, I've reproduced Bob's e-mail below that I was responding to
for context:

*This, quite simply, is not a "pool". A pool is by definition a tool to
reduceprofit variance by miners by collecting "weak blocks" that do not
meet thedifficulty target, so as to get a better statistical measure of
each miner'shashrate, which is used to subdivide profits. These are called
"shares" and areentirely absent here.The only available information here to
decide payouts is the blocks themselves,I do not have any higher statistics
measurement to subdivide payments. If Iexpect to earn 3 blocks within the
window, sometimes I will earn 2 and sometimesI will earn 4. Whether I keep
the entire coinbase in those 2-4 blocks, or I have100 other miners paying
me 1/100 as much 100 times, my payment is the same andmust be proportional
to the number of blocks I mine in the window.  My varianceis not
reduced.Further, by making miners pay other miners within the window N,
this results inN^2 payments to miners which otherwise would have had N
coinbase payments. So,this is extremely block-space inefficient for no good
reason. P2Pool had thesame problem and generated giant coinbases which
competed with fee revenue."Congestion control" makes this somewhat worse
since is it is an absoluteincrease in the block space consumed for these
N^2 payments.The only thing this proposal does do is smooth out fee
revenue. While hedging onfee revenue is valuable, this is an extremely
complicated and expensive way togo about it, that simultaneously *reduces*
fee revenue due to all the extrablock space used for miner payouts.*