Mining pool reward methods
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Transcript Mining pool reward methods
Bitcoin 2013, San Jose
Meni Rosenfeld
Bitcoil
5/19/2013
Written by Meni Rosenfeld
1
Outline
Mining primer
Simple reward methods
PPS
Proportional
Advanced methods
DGM
Reward method triangle
Shift-PPLNS
The future
Questions
5/19/2013
Written by Meni Rosenfeld
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Mining primer
Bitcoin mining exists to:
Determine initial distribution of coins
Synchronize transactions
Miners calculate hashes in an attempt to find blocks and
be rewarded with bitcoins
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Written by Meni Rosenfeld
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Mining rewards
One in 232 hashes will be a share
A share has probability p = 1 / D to be a block
Currently D ≈ 10 M
A 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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Written by Meni Rosenfeld
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Variance
Actual number of blocks found is random
Follows Poisson distribution
Variance is equal to mean
Relative variance: D / #shares
Example: 10GH/s miner, one year, B = 25, D = 10M
Average reward: 180 BTC
Standard deviation: 68 BTC
Reward range: 25 – 350 BTC
5/19/2013
Written by Meni Rosenfeld
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Mining pools
Group of people mining together sharing rewards
Relative variance based on combined hashrate
Allows 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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Written by Meni Rosenfeld
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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:
Simple
Miners completely shielded from randomness and variance
Payment sent instantly
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Written by Meni Rosenfeld
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PPS (Pay per share)
The problem
Variance is entirely assumed by pool operator
Operator requires high fees to compensate for risk
Bankruptcy chance: 𝛿
= exp
−2𝑓𝑅
𝐵
Still viable
But difficult to get right
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Written by Meni Rosenfeld
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Proportional
Mining 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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Written by Meni Rosenfeld
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Pool hopping
In good times…
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Written by Meni Rosenfeld
and in bad?
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Pool hopping
Proportional method based on wrong intuition
Suitable for deterministic tasks
Not 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
5/19/2013
Written by Meni Rosenfeld
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DGM (Double geometric method)
When miner submits a share, his score increases
Score decreases geometrically when:
1. A share is found
2. A block is found
Miners are rewarded for blocks according to current score
Independent of everyone else’s scores!
5/19/2013
Written by Meni Rosenfeld
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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
𝑟 ≔1+
𝑝 1−𝑐 1−𝑜
𝑐
𝑆 ≔ 𝑆 + 1 − 𝑓 1 − 𝑐 𝑠𝑝𝐵
𝑤≔
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1−𝑜 𝑆
𝑐𝑠
Written by Meni Rosenfeld
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Reward method triangle
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Written by Meni Rosenfeld
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Shift-PPLNS
Work is divided into “shifts”
Ending a shift is arbitrary
But not based on finding blocks!
Miners are paid for shares submitted in last N shifts
Method can work asynchronously
Suitable for scalable, parallel implementations
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Written by Meni Rosenfeld
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Pool landscape
5/19/2013
Pool
Method
BTCGuild
Shift-PPLNS / PPS
50BTC
PPS
Slush
Slush
Bitminter
Shift-PPLNS
Bitparking
DGM
Eclipse
DGM / PPS
Deepbit
Proportional / PPS
Ozcoin
DGM / PPS
Itzod
RSMPPS
Eligius
CPPSRB
P2pool (decentralized)
PPLNS
Written by Meni Rosenfeld
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The future
Currently: “Standard” pools
Pool assigns work to miners
Miners submit proof of completed work
Pool pays miners
Problem:
Pool performance improves with pool size
Mining tends to concentrate at biggest pools
Control of mining is centralized
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Written by Meni Rosenfeld
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The future
Some combination of:
Multi-pool mining
p2p pools
Variable-difficulty shares
Smart miners
Distributed insurance agents
Proxy pools
Will allow:
PPS payments (simple, no variance)
Low fees
Decentralization of power
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Written by Meni Rosenfeld
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Questions?
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Written by Meni Rosenfeld
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Thank you
Meni Rosenfeld
[email protected]
https://bitcoil.co.il
1DdrvajpK221W9dTzo5cLoxMnaxu859QN6
“Analysis of Bitcoin Pooled Mining Reward Systems”
https://bitcoil.co.il/pool_analysis.pdf
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Written by Meni Rosenfeld
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