windpath



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LegendaryActivity: 1256Merit: 1022 Decentralization Required, Ongoing Problem, Help Needed! May 14, 2014, 06:09:29 PM

Last edit: May 15, 2014, 05:22:12 AM by windpath #1 Decentralization Required, Ongoing Problem, Help Needed!



Note to moderators: I posted this in the main discussion because I believe this is a problem facing everyone, not just miners, and everyone can contribute to the solution.



I want to preface this by saying that I have nothing against any of the pooled mining operators.



Overwhelmingly they are respectable companies trying to make a profit, keep their customers happy, and are run by good people.



However, I woke up this morning and took a look at the global mining hash rate distribution on BlockChain.info.



Im sad to report that GHash.io is back up to 42% of the global mining power, only 8% away from a global majority of mining power .



Why does this matter?



Decentralized Mining is the backbone on which Bitcoin is built.



Without a decentralized system, Bitcoin fails as a trust-less network, requiring that the party controlling 50% or more of the global hash rate be trusted.



If a pool or miner reaches 51% of the global hash power, Bitcoin can no longer be trusted.



Many people believe that the consolidation of mining power is inevitable as the barrier to entry for miners increases and the competition decreases.



Let's make a stand before it is too late and say that as a community we cannot allow this to happen, and that there is a clear solution.



I see 3 main problems for miners who would like to strengthen the network, rather than weaken it:



1. Solo mining is dead.



Unless you have a large amount of capital to invest (millions of dollars), solo mining is not an option.



For the average miner, mining solo is like buying a lottery ticket.



For example, if you took 1TH/s of mining power (~$2,500 today), and solo mined with it, it would take about 440 days to solve a single block, if your lucky.



If youre particularly unlucky, it could take a decade or more.



Because of this, miners join mining pools to combine resources and solve blocks faster, consolidating the mining power.



2. Variance.



Centralized Mining pools solve another problem miners face, Variance. Variance is a mathematical concept, the lower the variance of a given pool the more regularly a block is found, resulting in a more predictable income.



This does not mean that miners on smaller pools make less Bitcoin, it simply means how often they make that Bitcoin becomes less predictable.



The greater the overall hash rate of a given pool, the lower the variance and the more attractive that particular pool becomes for a miner trying to predict ROI (which we all do).



3. Trust.



With 1 exception discussed later, to join a pool requires you to trust the pool operator.



This trust is essentially based on the assumption that all youre mining power will be credited to you.



While I have no proof, I believe that most, if not all major pool operators pay their miners exactly what they have contributed to solving a given block, minus any publicly stated fees.



However, for an unscrupulous pool operator it would be a trivial thing to siphon a % of that contributed mining power for their own financial gain.



In fact, if a large pool operator did not go crazy with greed, and limited theft to a small % of contributed mining power they would most likely never even be detected and would stand to make a small fortune.



Miners need to trust the pool they are mining with, if that trust is broken, or even bent a little they will be inclined to switch pools.



If that trust remains intact, they will stay and continue mining with a given pool.



So now that we have established the dangers of continued consolidation, and the problems average miners face, how do we fix this?



Cant we just leave it up to the pool operators?



Well, the last time GHash approached the 51% mark in January of this year, they issued a press release letting us all know that they recognize the dangers of achieving over 50% of the hash power stating in the release:



reaching 51% of all hashing power is serious threat to the bitcoin community and also stating the increase of hash-power in the pool is considered to be a good thing.



Seems a little contradictory, doesn't it?



They know that reaching over 50% could be catastrophic for Bitcoin, while also displaying their desire to grow their own business, cant really fault them for that .



We, as a community, have to solve this problem.



What is the current popular solution?



When GHash approached the 50% mark in January many miners switched to other centralized pools (Eligius, BTC Guild, Slush, etc ).



Can this solve the problem?



If their were 5 major pools, each with an equal distribution of 20% of the global hash rate, that might solve the 51% problem, but we will have still consolidated all Bitcoin transaction processing to 5 central facilities, leaving the whole network open to an attack that could bring down Bitcoin for good.



So, while distributing the hash rate between major pools solves the 51% problem, it opens up other problems that occur with centralization.



Many of us believe the best solution is a decentralized mining network, and it already exists in P2Pool.



P2Pool solves all our problems stated above:



1. Miners are not solo mining, but participating with other miners in a decentralized way.



2. The Variance of any pool decreases as more miners participate, potentially P2Pool could have a lower variance then even the mighty GHash if enough miners participated.



3. Trust-less. P2Pool is open source, anyone can download the full source and run their own node if they desire, completely controlling their own decentralized piece of the P2Pool mining pool.



4. P2Pool having over 51% of the network power does not compromise Bitcoin as it is decentralized from the start.



How ANYONE can help:



Contribute to further P2Pool development:



Make a donation to forrestv, P2Pools creator, for future development: 1HNeqi3pJRNvXybNX4FKzZgYJsdTSqJTbk



Make a donation to any of the other developers actively contributing to make P2Pool better (Rav3nPL is an active contributor):



Hire a developer yourself and put them to work on the P2Pool source



Contribute to miners using P2Pool:



P2Pool has a unique feature that lets an individual donate Bitcoins that are immediately and fairly distributed to all miners currently using P2Pool, it is an awesome gift for the miners working to protect the network, and a great way to express your gratitude.



Anyone running a P2Pool node can make this donation, if you are not running a node and would like to donate there are many trusted members here who will help you out by accepting your donation and then distributing it.



Donations can be easily verified via the BlockChain, so you just need a trusted person to execute it for you.



More info:



Run a public P2Pool node:



P2Pool nodes need to be fast and reliable, if you have some technical skill you could set up your own P2Pool node for others to mine on.



There are members of this forum, who for a small fee will set up a node for you.



Mine on a P2Pool node:



Mining on your own P2Pool node is the ideal solution, if you are not inclined to set up your own node there are many public nodes available for you.



Latency (the time it takes for your data to reach the node) is the most important factor with P2Pool, more so then with traditional mining pools.



Find a few public P2Pool nodes and



WindPath's Quick n' Dirty P2Pool latency guide:



Greater then 100ms  To far, look for a closer node

Less then 100ms  Looking good

Less then 50ms  Great, your in the zone!

Less then 30ms  It's raining hashes...

Less then 10ms  Are you sleeping in my data center?



Most importantly: Spread the word



1. Share this post

2. Add it to your signature

3. Write your own post

4. Get on social media

5. Let the world know you support a decentralized mining culture for Bitcoin .





Decentralized mining is good for Bitcoin, and it is good for you. Please support the network.







Sources:



P2Pool Main Thread:

P2Pool Public Pool List (main post not updated, but many pools listed in the thread):

BlockChain.info Hashrate distribution chart:

P2Pool GitHub Repository (source code):

P2Pool on the Bitcoin Wiki:

440+ day block time @ 1 TH/s:

GHash.io 51% Attack Press Release:



I posted this in the main discussion because I believe this is a problem facing everyone, not just miners, and everyone can contribute to the solution.I want to preface this by saying that I have nothing against any of the pooled mining operators.Overwhelmingly they are respectable companies trying to make a profit, keep their customers happy, and are run by good people.However, I woke up this morning and took a look at the global mining hash rate distribution on BlockChain.info.Im sad to report that GHash.io is back up to 42% of the global mining power,Decentralized Mining is the backbone on which Bitcoin is built., requiring that the party controlling 50% or more of the global hash rate be trusted.Many people believe that the consolidation of mining power is inevitable as the barrier to entry for miners increases and the competition decreases.Let's make a stand before it is too late and say that as a community we cannot allow this to happen, and that there is a clear solution.I seewho would like to strengthen the network, rather than weaken it:Unless you have a large amount of capital to invest (millions of dollars), solo mining is not an option.For the average miner, mining solo is like buying a lottery ticket.For example, if you took 1TH/s of mining power (~$2,500 today), and solo mined with it, it would take about 440 days to solve a single block, if your lucky.If youre particularly unlucky, it could take a decade or more.Because of this, miners join mining pools to combine resources and solve blocks faster, consolidating the mining power.Centralized Mining pools solve another problem miners face, Variance. Variance is a mathematical concept, the lower the variance of a given pool the more regularly a block is found, resulting in a more predictable income.This does not mean that miners on smaller pools make less Bitcoin, it simply means how often they make that Bitcoin becomes less predictable.The greater the overall hash rate of a given pool, the lower the variance and the more attractive that particular pool becomes for a miner trying to predict ROI (which we all do).With 1 exception discussed later, to join a pool requires you to trust the pool operator.This trust is essentially based on the assumption that all youre mining power will be credited to you.While I have no proof, I believe that most, if not all major pool operators pay their miners exactly what they have contributed to solving a given block, minus any publicly stated fees.However, for an unscrupulous pool operator it would be a trivial thing to siphon a % of that contributed mining power for their own financial gain.In fact, if a large pool operator did not go crazy with greed, and limited theft to a small % of contributed mining power they would most likely never even be detected and would stand to make a small fortune.Miners need to trust the pool they are mining with, if that trust is broken, or even bent a little they will be inclined to switch pools.If that trust remains intact, they will stay and continue mining with a given pool.So now that we have established the dangers of continued consolidation, and the problems average miners face, how do we fix this?Well, the last time GHash approached the 51% mark in January of this year, they issued a press release letting us all know that they recognize the dangers of achieving over 50% of the hash power stating in the release:reaching 51% of all hashing power is serious threat to the bitcoin community and also stating the increase of hash-power in the pool is considered to be a good thing.Seems a little contradictory, doesn't it?They know that reaching over 50% could be catastrophic for Bitcoin, while also displaying their desire to grow their own business, cant really fault them for that .We, as a community, have to solve this problem.When GHash approached the 50% mark in January many miners switched to other centralized pools (Eligius, BTC Guild, Slush, etc ).Can this solve the problem?If their were 5 major pools, each with an equal distribution of 20% of the global hash rate, that might solve the 51% problem, but we will have still consolidated all Bitcoin transaction processing to 5 central facilities, leaving the whole network open to an attack that could bring down Bitcoin for good.So, while distributing the hash rate between major pools solves the 51% problem, it opens up other problems that occur with centralization.in P2Pool.1. Miners are not solo mining, but participating with other miners in a decentralized way.2. The Variance of any pool decreases as more miners participate, potentially P2Pool could have a lower variance then even the mighty GHash if enough miners participated.3. Trust-less. P2Pool is open source, anyone can download the full source and run their own node if they desire, completely controlling their own decentralized piece of the P2Pool mining pool.4. P2Pool having over 51% of the network power does not compromise Bitcoin as it is decentralized from the start.Make a donation to forrestv, P2Pools creator, for future development: 1HNeqi3pJRNvXybNX4FKzZgYJsdTSqJTbkMake a donation to any of the other developers actively contributing to make P2Pool better (Rav3nPL is an active contributor): https://github.com/forrestv/p2pool/graphs/contributors Hire a developer yourself and put them to work on the P2Pool sourceP2Pool has a unique feature that lets an individual donate Bitcoins that are immediately and fairly distributed to all miners currently using P2Pool, it is an awesome gift for the miners working to protect the network, and a great way to express your gratitude.Anyone running a P2Pool node can make this donation, if you are not running a node and would like to donate there are many trusted members here who will help you out by accepting your donation and then distributing it.Donations can be easily verified via the BlockChain, so you just need a trusted person to execute it for you.More info: https://en.bitcoin.it/wiki/P2Pool#Donating_to_P2Pool_miners P2Pool nodes need to be fast and reliable, if you have some technical skill you could set up your own P2Pool node for others to mine on.There are members of this forum, who for a small fee will set up a node for you.Mining on your own P2Pool node is the ideal solution, if you are not inclined to set up your own node there are many public nodes available for you.Latency (the time it takes for your data to reach the node) is the most important factor with P2Pool, more so then with traditional mining pools.Find a few public P2Pool nodes and Ping them from where you will be mining, in most cases the lowest latency P2Pool node will be the most profitable for you.WindPath's Quick n' Dirty P2Pool latency guide:Greater then 100ms  To far, look for a closer nodeLess then 100ms  Looking goodLess then 50ms  Great, your in the zone!Less then 30ms  It's raining hashes...Less then 10ms  Are you sleeping in my data center?1. Share this post2. Add it to your signature3. Write your own post4. Get on social media5.Decentralized mining is good for Bitcoin, and it is good for you. Please support the network.P2Pool Main Thread: https://bitcointalk.org/index.php?topic=18313.0 P2Pool Public Pool List (main post not updated, but many pools listed in the thread): https://bitcointalk.org/index.php?topic=66182.0 BlockChain.info Hashrate distribution chart: https://blockchain.info/pools P2Pool GitHub Repository (source code): https://github.com/forrestv/p2pool P2Pool on the Bitcoin Wiki: https://en.bitcoin.it/wiki/P2Pool 440+ day block time @ 1 TH/s: http://bit.ly/1jtuJeN GHash.io 51% Attack Press Release: https://ghash.io/ghashio_press_release.pdf