Author: Daniele Pinna 2015-08-30 20:01:00
Published on: 2015-08-30T20:01:00+00:00
The author presents a theorem that states all hash rates h' > h generate more revenue per unit of hash v' > v. If an optimal hashrate exists where the average revenue for each hash in service is maximized, all larger hashrates will generate an average revenue per hash v' q. This balance is due to the fact that larger miners must be forced to mine larger blocks which carry a larger orphan risk. If a large miner chooses not to mine his optimal block size in favor of a seemingly "sub-optimal" block size, they will earn an identical revenue per unit of hash as smaller miners. This contradicts the assumption that an optimal hashrate exists beyond which the revenue per unit of hash v' < v. The theorem implies the marginal profit curve is a monotonically increasing function of miner hashrate. The theorem disproves any and all conclusions of the author's work and suggests that centralization pressures will always be present. Orphan risks favor the larger hashrate miner leading to greater revenues per unit of hash.
Updated on: 2023-06-10T21:38:59.937936+00:00