mining pool reward methods
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Mining Pool Reward Methods. Bitcoin 2013, San Jose Meni Rosenfeld Bitcoil. Outline. Mining primer Simple reward methods PPS Proportional Advanced methods DGM Reward method triangle Shift-PPLNS The future Questions. Mining primer. Bitcoin mining exists to: - PowerPoint PPT PresentationTRANSCRIPT
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Mining Pool Reward Methods
Bitcoin 2013, San Jose
Meni RosenfeldBitcoil
5/19/2013 Written by Meni Rosenfeld
Written by Meni Rosenfeld 2
OutlineMining primerSimple reward methods
PPSProportional
Advanced methodsDGMReward method triangleShift-PPLNS
The futureQuestions
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Written by Meni Rosenfeld 3
Mining primerBitcoin mining exists to:
Determine initial distribution of coinsSynchronize transactions
Miners calculate hashes in an attempt to find blocks and be rewarded with bitcoins
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Mining rewardsOne in 232 hashes will be a shareA share has probability p = 1 / D to be a block
Currently D ≈ 10 MA block is rewarded with B bitcoins
Currently B = 25 (+ tx fees)
Expected reward per share: pB
Example: a 10 GH/s miner finds:8K shares per hour (73M per year)Per year, on average, ~7 blocks (180 BTC)
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VarianceActual number of blocks found is random
Follows Poisson distributionVariance is equal to meanRelative variance: D / #shares
Example: 10GH/s miner, one year, B = 25, D = 10MAverage reward: 180 BTCStandard deviation: 68 BTCReward range: 25 – 350 BTC
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Mining poolsGroup of people mining together sharing rewards
Relative variance based on combined hashrateAllows continuous rewards similar to expectation
Contribution is measured by number of shares
Actual calculation of rewards is not trivial!Hence the need for (and variety of) “reward methods”
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PPS (Pay per share)Pool operator takes an active role
Pays miners a fixed amount pB per share (minus fees)Operator keeps all block rewards
Advantages:SimpleMiners completely shielded from randomness and variancePayment sent instantly
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PPS (Pay per share)The problem
Variance is entirely assumed by pool operatorOperator requires high fees to compensate for riskBankruptcy chance:
Still viableBut difficult to get right
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ProportionalMining is organized into rounds
Finding a block ends previous round and starts new one
Block reward distributed among miners in latest round in proportion to shares they submitted this round
Operator has no risk; miners do have variance
Problem: Method is completely broken!
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Pool hopping
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In good times…
and in bad?
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Pool hoppingProportional method based on wrong intuition
Suitable for deterministic tasksNot for random, memoryless tasks
Reward per share = B / (#shares in round)#shares in round = #past shares + #future shares#future shares unknown but always look the same#past shares is known and variable!Mining most lucrative when #past shares is low
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DGM (Double geometric method)When miner submits a share, his score increases
Score decreases geometrically when:1. A share is found2. A block is found
Miners are rewarded for blocks according to current scoreIndependent of everyone else’s scores!
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DGM (Double geometric method)Reward per share depends only on pool’s future
Hence, method is hopping-proof
Works like a capacitor
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Reward method triangle
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Shift-PPLNSWork is divided into “shifts”
Ending a shift is arbitraryBut not based on finding blocks!
Miners are paid for shares submitted in last N shifts
Method can work asynchronouslySuitable for scalable, parallel implementations
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Pool landscapePool Method
BTCGuild Shift-PPLNS / PPS50BTC PPSSlush Slush
Bitminter Shift-PPLNSBitparking DGM
Eclipse DGM / PPSDeepbit Proportional / PPSOzcoin DGM / PPSItzod RSMPPS
Eligius CPPSRBP2pool (decentralized) PPLNS
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The futureCurrently: “Standard” pools
Pool assigns work to minersMiners submit proof of completed workPool pays miners
Problem:Pool performance improves with pool sizeMining tends to concentrate at biggest poolsControl of mining is centralized
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The futureSome combination of:
Multi-pool miningp2p poolsVariable-difficulty sharesSmart minersDistributed insurance agentsProxy pools
Will allow:PPS payments (simple, no variance)Low feesDecentralization of power
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Questions?
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Thank youMeni [email protected]://bitcoil.co.il1DdrvajpK221W9dTzo5cLoxMnaxu859QN6
“Analysis of Bitcoin Pooled Mining Reward Systems”https://bitcoil.co.il/pool_analysis.pdf
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