Hashrate go up

Difficulty go up

Variance go up

nostr:note1ynj5x36ppjffyer76nsqz7et9rpzxqf786r2zhqwr5hup5etwevqu3yz8y

Not sure if FOSS spectically but it sure looks like they’re building everything public. Can check it out here: https://delvingbitcoin.org/t/pplns-with-job-declaration/1099

It’s cos theres no native content discovery mechanism on nostr like there is with the Twitter recommendation algo. Centralisation of some things could improve UX quite a bit

Equivalently stated, how do you know your reward is diminishing because another pool is block withholding your pool (results in share dilution in the same way as pool “share dilution”)?

The answer is the same: you don’t. You just receive less money. However it’s in the pool’s best interest to reward miners the maximum they can or else miners leave to competitor pools with higher payouts. Riot left Braiins after a period of bad variance luck, and that could be because entropy, or potentially a little competitive block withholding. Thats the motivation for competitor pools to block withhold: ruin payouts in one pool so miners get a bad impression and switch pools.

Mining pools have a principal-agent trust dynamic that is inherent to the distribution of work. Miners are trusted to perform honest work and pools are trusted to pay them for it. Adding ecash anywhere isn’t gonna change those dynamics because they are baked in.

Bleeding edge innovation here is by Demand pool and Braidpool, with Demand being much closer to production ready transparent share accounting.

Ecash does not remove the postgres database or any pool visibility—the pool will still have (and must have) full visibility over shares submitted because it needs to do accounting and proper payouts according to those shares.

Share accounting is also reward accounting, so the only improvement here is we are relying on a trusted mint to be a valid custodian of the Bitcoin, not just the pool (unless the pool is the mint, which kind of defeats the purpose of the ecash because the pool still has full visibility over the share accounting).

I cannot see any additional benefit here, just an additional trusted third party…

For those who have trouble with the link the title of the lecture notes is called “Cartesian Economics: The Bearing of Physical Science upon State Stewardship”

http://habitat.aq.upm.es/boletin/n37/afsod.en.html

This is what I read to get a good understanding. I think he has a longer book that dives much deeper called “Wealth, Virtual Wealth, and Debt”

Debt, with the help of compound interest, is the only asset class that grows without any regard to entropy. All assets depreciate, and require external energy as inputs to reverse entropy. Not debt. Debt grows infinitely with mathematical precision over time. With the help of state violence, it is the perfect scam to enslave populations.

Fredrick Soddy talked about this in his books on thermoeconomics back 100 years ago. He predicted everything would be swallowed up by debt as it has been today.

“Great truths do not take hold of the hearts of the masses. And now, as the world is in error, how shall I, though I know the true path, how shall I guide? If I know that I cannot succeed and yet try to force success, this world would be but another source of error. Better then to desist and strive no more. But if I do not strive, who will?” — Zhuangzi

If the pool has 15% of global hashrate then hedging is still a good idea.

By hedging miners and pools can eliminate payout swings due to pure randomness.

Making money most of the time reduces the risk of not making money sometimes!

This chart shows the variance reduction if the pool has 3% of global hashrate (the pool in the first chart has 5% of global hashrate).

The reduction in expected value reflects the value of the insurance that the miners purchase by hedging.

Hedging hashrate reduces Bitcoin  mining pool block reward variance.

This chart shows the expected earnings of a pool if they bet against themselves every block for one difficulty epoch.

By hedging hashrate every block, pools reduce 2 standard deviations of risk to less than 1.

Nostr is the propaganda machine for the people and by the people

If you’re not hedging, you’re hoping. Hope is not a business strategy to deal with variance risk embedded within Bitcoin

Make money less than 1% of the time vs make money more than 99% of the time?

I would much rather not wait 61 hours for my next payout. I would much rather be making money most of the time. If you’re mining for ocean then you can expect to wait, but that doesn’t stop you from hedging. Any miner can turn their dull waiting time into an opportunity!

By betting against your pool, you can make money regardless if you mine the next block or not, and thus hedge your hashrate. By betting against your own pool you ensure cash flow without further centralizing hashrate.

Miners want stable cashflow (FPPS dominance is evidence of this enough) and small pools with high variance have near certainty of gamblers ruin if they pay FPPS payouts. Hashrate hedging can be employed to enable miners to lower variance without adding too much risk to the pool operator like FPPS.

Hedging hashrate is a win-win for the mining ecosystem. Miners can direct their hashrate to smaller pools and smaller pools can be profitable despite high variance. By hedging hashrate a pool doesn’t need to risk gamblers ruin by offering stable FPPS payouts, and miners don’t need to worry about cash flow risk due to variance.

If a miner directs their hashrate to a pool with 5% hashrate, they only get paid 5% of the time (assuming proportional payouts).

If a miner hedges their hashrate (by betting against their own pool) then they get paid 95% of the time.

Hedging hashrate therefore reduces cash flow variance for miners in pools with proportional payouts.

Which is preferable?

Make money 5% of the time OR make money 95% of the time?

You first need to grasp the concept of an axiom before you apply it (incorrectly)

Sometimes seemingly simple or obvious things are not so obvious

https://en.m.wikipedia.org/wiki/Parallel_postulate

Parallel postulate seems obvious but non-euclidian geometry does not have such an axiom. Projective geometry also has no parallel postulate requirement.

https://en.m.wikipedia.org/wiki/Axiom_of_choice

Axiom of choice in a finite world makes sense. With infinities you get the Banach-Tarski paradox

https://en.m.wikipedia.org/wiki/Banach%E2%80%93Tarski_paradox

When using mathematical precision to investigate ideas some faith is required that your axioms hold true, because alternative axiomatic systems exist that are also non contradictory.

Think of it like axioms as defining the boundaries of a mathematical reality, and you can have different axioms that create different realities.

You know what you know

Axioms allow you to choose which statements are true in a formally defined system (like ZF set theory or euclidian geometry). Examples like the axiom of choice or parallel postulate require faith in their truth value for any of the statements that follow those axioms to be true.

Any system of reasoning requires some statements be true, and axioms are those bedrock statements that are taken as truths because we require no proof for them. We require no proof because we have faith they are true.