Topic: Are pools more efficient? - page 2. (Read 3250 times)

Thanks, that makes more sense to me. The key thing was that there was no certainty of finding a solution within a certain space.

What is the importance of the timestamp? Would there be any benefit to incrementing the reward address rather than incrementing the timestamp?

No because there is no defined space or more technically the defined space is constantly changing.

The input for a hash is:
merkle root hash (a hash of all transactions in block including the pool reward address so you can't cheat)
hash of the last block (prevents you from working on block "ahead of time" and also creates the "chain")
timestamp (current time)
nonce (a 32 bit number 2^23)

So a miner will try every nonce value.  That is defined space.  There are roughly 4 billion possibilities however at current difficulty (1.2 million) there is only a 1 in 1.2 million chance that any value in the nonce range will produce a value hash.  1,199,999 out of 1,200,000 complete nonce ranges (4 billion hashes) will produce no solution (on average).

So once that defined space is exausted your miner gets new work.  The simplest way to get new work is simply increment the timestamp and now you are working on an entire new solution space.  Each complete nonce range hashed gives you a 1 / (difficulty) chance of finding the solution.

Periodically the pool will update the other elements in block header.   When a block is found the header changes to reflect new "last block hash".  As transactions are added they change the merkle root hash.  To avoid 2 miners in same pool duplicating work the pool uses a value called "Extra nonce" in the coinbase transaction to ensure each miner is given a unique blockheader to work on at all times.

So wouldn't that imply that 100 computers working in a pool will solve a block faster than 100 computers working for themselves? Because the computers in the pool can all use the pool address and split up the possible solutions. 100 computers working by themselves would essentially be all independently trying to solve a much larger problem because of their unique addresses.

Your solutions/shares are specific to a set of headers for the block.  When you're solo mining, the headers include YOUR payout address, so any random nonce you try will produce a different hash, even though that same nonce/extraNonce has been tried by someone else.

In pool mining, the work is distributed so everybody is trying difference nonces without overlap.  That overhead is handled by the pool and its bitcoind.

How do they assign who will try which solutions so that there is no overlap?

No.

As far as i know no one ever redo the solutions already tried by someone else. Pool mining or solo mining you always try different solutions so there is no overlap and wasted time.

Only advantage of pool mining is that maybe they receive faster new blocks/when they find a new block they immediately start crunching for the next one while in solo you would have to first download it...

But to find a single solution from an "essentially infinite" space of solutions, you will have to sample a significant proportion of those "essentially infinite" solutions. That means it's not infinite at all. Probabilistically, you would expect to sample as many solutions as there are total possible solutions if you just randomly guess at it. If you keep randomly guessing a number between 1 and 10, you will expect to guess 10 times before you get it. You could possibly guess wrong twenty times in a row.

But if you split up the solutions and systematically eliminate them, then you would only expect to sample  half of them, actually (n+1)/2. If you systematically try to guess numbers between 1 and 10 without repeating the same guess, you will expect to guess 5.5 times before you get it. So if you are eliminating known wrong solutions you cut your work time in half. You will never guess more than 10 times. I was wondering if pools are doing this, or if the Bitcoin protocol somehow incorporated it automatically.  

Pools aren't "more efficient" in the way you mean. The search space of solutions is virtually infinite, so there is no chance of people duplicating work even without any coordination. Basically miners are trying random numbers until they get a hit, whether they're mining pool or solo. The average number of blocks found by a miner is the same in both cases.

What pools do is reduce the variance in a miner's payout. I discuss the basics of this in chapter 1 of Analysis of Bitcoin pooled mining reward systems.

Not if people properly set up failover pools. And other current problems of pools with respect to network robustness have solutions which will be implemented in the future.

That completely did not answer my question at all.

Finding Bitcoin blocks is a lottery.  You get a certain number of tickets every second, depending on your hardware speed.  Chances of winning this lottery is slim, but the winner gets 50 coins + fees of transactions in the block.

A pool is where many miners join forces and put all tickets they buy into a common pool.  When someone wins, the 50 coins and possibly the fees (some pool owners keep the fees) are shared among all participants based on how much each participant contributed.

A pool will typically find blocks more often than a solo miner, because the combined hardware power of the pool is so much larger than a single miner.  For each miner the result is the same in the long run, given that the pool owner takes no fees.  In practice solo mining is more profitable in the long run because a solo miner is only dependant on his own miner and network, and can even tolerate short network outages.  Fewer dependencies means fewer interruptions in mining.  Pools are down now and then, and even DDOSed quite often.

The Bitcoin network would be more robust if more people mined solo.  When pools are DDOSed, block rate slows down and transactions confirms slower as a result.

I'm not super technically into how bitcoin works so maybe I am being dense here. But the way I see it, if there is a brute force problem that everyone is trying to solve. It will be faster if you don't waste time redoing the solutions you have already tried once. So if one computer is working on a brute force problem, they are just randomly trying solutions. But if a group of computers are working on a problem, do they somehow distribute solutions to check or tell each-other which solutions they have tried so nobody is wasting time? Is this how pools work? Do they get more out of their combined computing power than the sum of individual miners?