Topic: Crowd fund Bitcoin miners (Read 1350 times)

ITA! IMO, Decentralization is one of the of the main advantages of Bitcoin today.
But if  generation of coins will be more profitable   through increasing power of system, this way of supporting makes sense

First of all PoS is such an elaborate and big scheme which is changed almost weekly to fix problems with it (contrary to PoW which has never been changed since Bitcoin started as far as I'm aware), I don't think that any stable crypto would be built on technology which is still in development.

I still don't see how your plan addresses sybil attacks, if one can acquire unlimited identities one couldn't one apply to all of these contracts?

So far Bitcoin IS centralized, what I would do is take that centralization and give it to the people, I have worded my question specifically in such a manner that disregards reputation completely as if we found a solution to that problem in the meantime.

And your proposed answer to this seriously is "To prevent that let's give loads of money to a 'trusted' person so it sets up hardware and nodes on behalf of us in a decentralized fashion"?

You're trying to troll right? Or I just don't understand your idea.

I mean you just identified why the decentralization of the network actually is a needed thing and how at the same time the way mining works right now is undermining the decentralization. And your way to fight it is to throw decentralization over board completely and trust a single entity with handling the network and transactions? You do realize that in that case you just could save loads of money and just pay using paypal right?

I think the only valid answer to the problem you identified is to change how mining works in such way that it gives an incentive to mine solo again. And I do not mean change the algorithm or move from PoW to PoS.
What I have in mind would be a "license" system. The network assigns a "license" to mine to any full node that provides a certain hashrate in the network. That license expires upon finding a block and a new license to the same node is assigned by a slot system. That slot system would work like this: The Network tries to maintain a constant hashrate (let's go with the current ~65 PH/s) aswell as a minimum number of active mining nodes (let's say 1,000,000). The upper bound for the hashrate a node would need to provide in order to be assigned a "license" (or mining slot) would be calculated by dividing the target hashrate by the minimum number of active miners. So with the example numbers: 65 PH/s / 1,000,000 = 65 GH/s. The lower bound should be half of that at most to ensure the slow nodes do not block slots for long times. People with hadware that provides too little hashing power would need to pool people whose hardware provides more hashrate would need to split it up into more nodes. When the target hashrate is reached no more slots are assigned and any nodes that would qualify for a slot go into a waiting line. In order to prevent the possibility of attacks by entities with lot's of hardware that waiting line is not a FIFO line instead when a slot becomes available a fitting new node is chosen at random by the network based on waiting time (say a node from the 1000 longest waiting nodes is chosen).

If I haven't overlooked something critical (which I surely have as this was thought out as of the writing of this post) the consequences of introducing this change would be:

• constant difficulty and thus an end to the hardware arms race. hardware manufacturers could concentrate on lowering the prices and increasing the energy efficiency of the hardware.
• the network's safety from manipulation could be better guaranteed

Just goes to show ya that great minds think alike!

Welcome to the club!

Exactly what I was thinking when I thought about it so this is the reason I am creating theoretical scenarios.

"If credibility wasn't a factor would you donate?"

Yeah, right.

You, BFL, Lab_Rat, Terrhash and Hashfast all the way to the moon!

I wouldn't donate to crowd funded miners. I have no problem with the small transaction fees. It give incentive to continue mining, especially when there will be no more bitcoins generated.

cex / ghash already do crowdfunding where they house the units..

its called cloud hashing

I'd like to believe it would be more then worth the effort and risk in my opinion. So probably yes

Blockchain bloat is a whole other issue which can be addressed separately.

The whole point of Bitcoin is that you can send significant sums of money nearly free across the world, however the ever increasing fees dictated by the business oriented miners are slowly killing the network, I don't want to get into the debate whether the businessmen that are taking the initiative and risk deserve all those fees or are rewarded disproportionately (they would want to get their ROI as fast as possible to minimize risk) either.

What I had in mind isn't a pool but a bunch of servers geared towards hashing SHA256, some could perhaps be sponsored for publicity, some donated by the good people of Bitcointalk, etc. Since it's all charity and not business oriented we would never have an ROI and continue to let the servers mine to keep the network free.

The coins earned by fees is tiny compared to the block reward.  The economics of mining are mostly dictated by the block reward, not the fees.  The fees only affect the profitability of completely filling blocks due to the increased risk of orphans (but that is a separate issue).  So no I don't see how any group is extracting above-market profits from fees by monopolizing mining. 



Fees have been dropping when measured in bitcoin and rising when measured in dollars.  This was expected.  Fees may drop in the future when the block size is raised, new blocks are communicated by hash to reduce the orphan cost, and floating free-market-based fees are implemented.  



So why would you want lower fees below their market value if you are worried about blockchain bloat?  

More likely an easier way would be to create a mining pool that has an algorithm set to not collect transaction fees.

Then those that want to cut down the fees would join that pool when mining, while taking a financial hit compared to other pools.

I doubt it would be very popular.

i am not completely against centralized mining to support the network,

 but are you mathematically sure that such a model will help secure the network along with very little transaction fees?

then if transaction fees are low then how will domestic miners be rewarded in the days block rewards go very low?

It would be a short term solution. A bunch of people get together to fund a large mining platform that would cost a lot of money. They would also have to pay for the electricity.

In theory they could make their money back through the rewards but if not then you have to take a loss. And after your mining platform becomes obsolete you have to donate more. Basically funding the Bitcoin network.

I'd want to say yes if credibility wasn't in question.  I'd like to believe it would be more then worth the effort and risk in my opinion.

No, because if I am a businessman of means I can effectively "hijack" the network by investing a large sum of money into specialized servers/hardware. I could then dictate the fees and impose them on the network, this is where we are currently today.

As you can see the fees were significantly lower in relation to the amount of BTC back at the day, if you calculate the worth in Gold or even monopoly money.

Of course the lower fees would cause additional blockchain bloating which is an issue in itself, none of the Bitcoin developers recognize that.

Again, depends on how it's split up.

I don't see how this idea could work, but let's imagine for a second that it does.  Why do you think it would be better for users to pay for below-market fees when they could just pay the market rate for the transactions that they actually make?  Wouldn't your proposal just mean that some people are paying for more TXs than they are making and some are paying for less?  Wouldn't this just make the market less efficient?  

 

I mean if credibility wouldn't factor in your decision, say Bill Gates comes up with this project, nobody would doubt his credibility.

I am curious whether this "decentralized" sack of shit community could actually be fiercely organized to better Bitcoin.

And I am by no means bashing the community, most of you are great people it's just that decentralized everything = in disarray. Are the Bitcoin members dedicated and informed enough to pull this off or will they be herded like sheep?

I'd possibly donate. Depends how it's distributed.

If credibility wasn't a factor, I'd say probably unlikely that I would. Seems like a good scam without credibility.