talk
Hashpools: A Peer-to-peer Free Market for Bitcoin Mining
- Edition
- Berlin · e-cash edition
- Time
- Sat, Oct 12 · 2:00 PM – 2:30 PM
- Location
- Main Stage
- Type
- talk
Mining bitcoin has come to rely almost exclusively on incumbent mining pools serving as trusted third parties to produce block templates and process payouts. While the system works well enough for most miners, it still suffers from the inherent weaknesses of the trust based model. Completely decentralized mining is not really possible, since mining pools cannot avoid bending the knee to the most well capitalized pool operator. The need for capital to smooth out mining reward variance increases pool centralization, limiting the minimum practical pool size and cutting off the possibility for small casual mining, and there is a broader cost in the loss of the ability to mine UTXOs that do not pass through custodial wallets. With the possibility of block withholding, the need for trust spreads. Mining pools must be wary of their hashers, hassling them for more information than they would otherwise need. A certain percentage of fraud on the part of the mining pool cartel is accepted as unavoidable. These costs and privacy violations can be avoided by mining to a solo pool, but no mechanism exists to buy hashrate directly without a trusted party. In this talk, I propose a solution to the mining pool centralization problem using a self-hostable FOSS mining pool stack to generate ecash assets backed by mining shares. The system is robust as long as some honest pool operators, anywhere in the world, are able to host it without interference from the state.
