Me too!
Discussion
My scheme is a little different. The mining pool doesn't hold on to the blinded secret in my design. The pool returns the blinded signature to the miner right away. This is a new ecash asset different from bitcoin-backed ecash. It is actually backed by the proof of work share instead. It's called ehash.
Ehash tokens have basically two phases of life: the maturity period and redemption period. During the maturity period the ehash token gains a little bitcoin value each time the pool finds a block. During this period, tokens are tradable so people can speculate on them or sell for a fixed price, whatever floats your boat.
After some time, maybe a few weeks, the maturity period ends and the ehash token stops growing in value. Now it can be redeemed for actual bitcoin-backed ecash tokens, or maybe a lightning payout, or if you are a big miner you can probably afford an on-chain payment.
It's super early. All you can do right now is collect ehash tokens because I haven't coded up the maturity period or redemption period stuff yet. That's all coming. It's gonna be a little while. This stuff takes time to build.
The coolest part is that with Hashpool you not only get all the privacy benefits Calle discussed but it also creates a super efficient bitcoin futures market and a global, KYC-free bitcoin onramp. If you want to stack corn without doxxing yourself, just buy some ehash tokens and wait. You'll actually be paying the seller of the tokens to assume the risk of a lower-than-expected payout so it's a win-win. They get a steady payout and you get a privacy benefit.
Since the token isn't backed by Bitcoin, but by the PoW associated with each miner, how does the miner convert the eHash to eCash (bitcoin)?
Good question!
When the maturity period expires and the redemption period begins the pool/mint begins exchanging ehash tokens for ecash tokens backed by bitcoin. Once in the redemption window, ehash tokens can no longer be swapped for other ehash tokens, they can only be redeemed for ecash (or another payout method such as lightning or on-chain). This a limited time window so you want to dump all your ehash from this tranche for real bitcoin before they expire. When the redemption window closes the mint is no longer guaranteed to redeem them.
One way to think about it is that instead of horizontally stratified user accounts, the mining pool keeps track of vertically stratified tranches of ehash token assets. This is a fundamentally more private arrangement because the pool doesn't know or care about individual users, it's only looking at the bitcoin value of ehash tokens. Ehash can be traded in a peer-to-peer fashion through any medium, and ultimately redeemed by anyone in the world. The pool doesn't need to care about any of that.
It's like a rolling window of contracts. All ehash tokens issued in a single time period will have the same bitcoin/difficulty value as every other token in the same tranche. As time rolls on new contracts are created and old ones mature and expire. The specific valuation of each contract is variable, depending on how lucky or unlucky the pool was during that maturity period. This is what speculators will be gambling on, and the risk that some miners will pay to offload. Simulated FPPS payouts. 🤙
This is fucking fascinating.
Seems like if a pool went with this, in addition to greater privacy, individual miners would get to choose FPPS-like payouts (smoother) if they want, or some proportion between 0-100%, by selling ehash tokens on the market that forms.
Just wanna make sure I’ve got it right
You got it!
If miners want to cash out immediately they will need a taker to buy their ehash tokens. Maybe the pool will do this. This would mimic the existing mining pool industry but with better privacy. I think a more optimal solution would be for a class of professional hash traders to develop a high level of expertise at pricing this risk.
Everyone wins when markets are efficient. 🤙
Look forward to following progress. FPPS stuff, from what little I’ve heard about it, seems inefficiently priced and rather prevalent.
I don't think existing pools price hashrate poorly but the existing model creates a moral hazard that is an existential risk for all of bitcoin. Vertically integrated pools centralize block template production into the hands of a few pool operators. When a handful of people dominate the production of block templates, all of bitcoin is at risk.
Hashpool creates an economic incentive to put the pricing of hashrate and the production of block templates into the hands of other parties. This is the most important thing to fix IMO. In this model the large pools become dumb aggregators that collect hashrate, produce blocks, and feed block rewards to a bunch of small client pools. The client pools produce block templates and the free market prices hash. Every player has one job to do. Moral hazard fixed.
You prolly have a lot going on, so thanks for all the explanations. 🙏
NP! Thanks for all the questions!
But in order to get there we need a PPLNS pool with enough hashrate to regularly produce blocks. Right now nostr:nprofile1qqsq9k04vahllseell55m74n3047y88pzlr0z5yany32st29fapqmgsppemhxue69uhkummn9ekx7mp0qy2hwumn8ghj7un9d3shjtnyv9kh2uewd9hj7qgawaehxw309ahx7um5wghxy6t5vdhkjmn9wgh8xmmrd9skctc87ckyu is the only game in town. DEMAND pool is ramping up. Can't wait for those guys to launch!
It will be a tougher sell to get an existing large pool on board but I am hopeful that we can talk some sense into them. If we can get Foundry to offer PPLNS services it's game over for Antpool.
I expect a KYC PPLNS system will be essential to get a large public mining pool on board. Great news! The cashu community is already building this capability. I think we're winning. 😎🤙
Thank you for taking the time to answer my question and explain the mechanics. I'm excited to see where this goes. I think your work is going to have the potential to revolutionize the mining payout system, a lot of people are going to find a lot of value in it.
Have you already been in contact with some of the mining pool operators to get their feedback? In my experience, people are usually more open to change in what they consider their arena when they're brought in and consulted so they can perceive some small measure of ownership and control. It's basically a psychological sales technique.
I have not. It's very early and I'm busy sprinting to get a prototype working. I will keep this in mind, though!