[Bitcoin-development] Decentralizing mining

[Peter Todd <pete@petertodd.org>]

[-- Attachment #1: Type: text/plain, Size: 2841 bytes --]

I just posted the following to bitcointalk.

https://bitcointalk.org/index.php?topic=221164.0


Right now between two to four running the largest pools control Bitcoin
in the short term. That's a lot of hashing power in the hands of very,
very few people. In addition pools have little incentive to run secure
operations, and many pools have been hacked with their funds stolen.
Those hacks could just have easily been used to attack the network
itself.

This needs to change.

Pooled-solo mining is a concept Gregory Maxwell, Luke Dashjr and I were
discussing at the conference two weeks ago. (credit goes to Greg and
Luke; I was mostly just listening) Basically the idea is that miners
with mining equipment run a local Bitcoin node and use that node to
construct the blocks they mine - the same as if they were solo mining.
The pools job is then to only track shares and organize payouts.

If the pool gets hacked the worst that can happen is miners are ripped
off, rather than Bitcoin itself being attacked. With pooled-solo mining
even a pool with a majority of hashing power wouldn't be able to do much
harm to Bitcoin. (depending on the implementation they may be able to
blacklist specific transactions - the pool needs to know what
transactions are in the share to credit fees properly)

Tech-wise Luke created getblocktemplate last year as a means to audit
mining pools. I'm sure Greg and Luke can explain the nitty gritty
details better than I can, but essentially the plan is to take
getblocktemplate and extend it as required for pooled-solo mining. This
will include pool and miner software initially, and later improvements
to GUIs and what not to make the whole process easier.


With the success of my recent video project I also want to make this
Keep Bitcoin Free's next project, specifically funding a developer
(likely Luke) to make this happen. Additionally once software is written
and easily usable a good follow-up would be a video and other media to
promote the idea to miners. No guarantees we'll be able to come up with
commercially competitive remuneration, but we can at least come up with
a "Thank you" tip. But first lets discuss the technical requirements to
get an idea of what the scope is.


Finally, for the record, a big part of the reason why myself and other
Keep Bitcoin Free supporters are interested in doing this is very much
to take power over the direction of the network from big pools and put
it into the hands of thousands of individual miners. It's much easier to
convince people that changes to Bitcoin, like increasing the blocksize,
are directly impacting decentralization when individual miners are
seeing that happen to themselves.

-- 
'peter'[:-1]@petertodd.org
00000000000000c14fa7031b2431ab32785efdf1e5aaecc83555ee52a2fc550b

[-- Attachment #2: Digital signature --]
[-- Type: application/pgp-signature, Size: 198 bytes --]