Author: Chris Belcher 2017-08-30 16:15:56
Published on: 2017-08-30T16:15:56+00:00
The proposed payment channel system for P2Pool, a decentralized mining pool, involves having several hubs to choose from and hashers having payment channels open with each of them. The hub would need to own many bitcoins in order to have payment channels while waiting for blocks to be mined. The hub should receive a small percentage of each block reward to provide them with an incentive, and prospective hub operators should write their bids on a forum somewhere and have their details added to some list on github.There are iterated prisoner's dilemma effects between the hub and the hashers. If the hub cooperates it can expect to make a predictable low-risk income from its held bitcoins for a long time to come, if it does something bad then the hashers can easily call off the deal. As well as the smart contract, the hub would require a lot of profit in order to burn its reputation and future income stream, and by damaging the bitcoin ecosystem it will have indirectly damaged its own held bitcoins.One issue with this proposal is that all the hashers and hub need to know the exact value of the block reward in advance, which means they must know what the miner fees will be. One possible way to solve this is to mine transactions into shares and so use the sharechain to make all the hashers and hubs come to consensus about exactly which transactions they will mine, and so exactly what the total miner fee will be. Another way is to have the hashers and hub estimate what the total miner fee value will be based on the median miner fee of the last few blocks or the next 1MB of the mempool.Block rewards are locked for 100 blocks before they can be spent, so the cooperative signatures should be exchanged after 100 blocks just in case the block gets made stale/orphaned. Each hasher should probably be made to pay some bitcoins into the payment channel address too, to stop DOSers locking up all the hub's bitcoins.Overall, using payment channels in a hub-and-spokes system would allow for more individual hashers to mine on P2Pool without increasing the variance of payouts. This would solve the problem of miner centralization caused by pooled mining in Bitcoin. While there is a risk of centralization at the hub level, this can be mitigated by using a federated model with multiple hubs. The proposal has some limitations, such as hashers having to keep their money locked up in the payment channel for months before enough collects and miners not wanting to hold bitcoin long term. However, with the availability of segwit, payment channel schemes are much easier to code.
Updated on: 2023-05-20T03:37:47.776081+00:00