This post addresses the issues of possible future centralization of mining power trough hoarding of hash rate (sols) into the hands of a few large investors. It is possible that such occurrence could put into question the long term the stability of the network, as well as the trust of the retail consumers and investors. Another issue about the current state of mining is that the current POW/POS methods motivate miners to compete among each other, through gearing up and hoarding mining hardware / crypto in order to profit and assert their dominance in the market which also creates amounts of hashing power that can be deemed excessive. The same can be said about the amount of electricity that is being used to maintain crypto networks under their POW state of mining distribution. Such actions are neither illegal or immoral, though they go in opposition to the principle of crypto to promote the idea of decentralization. Lastly, there are currently only a few manufacturers of mining equipment that posses the potential to influence crypto in ways that are not always clear to the public eye, which creates tension and fud among the crypto community. It is my opinion people appreciate the overall openness of crypto’s source code, but when it comes the hardware needed to maintain the network, not openness, but cloth and dagger comes to mind…
As an intellectual attempt to mitigate the issues given above and inspired from the heated discussion “Let’s talk about ASIC mining” and by the different perspectives laid there I give to the consideration of the Zcash’s community the concept of a POL mining distribution (Proof of Life).
Proof of Life is a concept based on the basic premise that behind every equal in capacity piece of mining hardware should stand one individual - a limitation of a single mining hardware per individual participant who is active and aware of his participation in the mining process.
How can such mining distribution ensure the link between a the individual and the his mining hardware?
Trough a registration form. Whether this would be a soft version - like verification of, an example, Facebook account trough a specialized app or a full registration via government issued ID, like Coinbase has for its users, or both - that should be taken for consideration. Another consideration would be how the platform for such registration should look like, who will maintain it and should it be conected to other existing platforms (similar to Coinbase, Facebook, Google Play, etc).
Registration data should be protected. Still, people will have to willingly consent to participate by accepting to share part of their personal data, in order for all the users in the network to maintain their privacy while transacting on the blockchain.
How to ensure that the linked individual is being active and willing participant in the mining process?
Trough a periodical gathering of encrypted information. To avoid exploitation of the POL, periodical information of the individual’s activity should be automatically gathered and encrypted. Additional layers should be included to prevent any unwanted automation of the process.
Could there be attempts of exploitation of how the POL concept works?
Possibly. However, such advantages would affect less the mining process and will work only for a limited time due to the complexity of the data gathered periodically on the individual’s activity. Making them ineffective on a larger scale and in longer terms.
Please, share your comments below. I’m curious to see how people think such concept would or wouldn’t work.
Principally i’am all for it, but some main concerns:
The Registration/Verfication would mostly be centralized. While i personally have 0 problems with that others may have a problem with that.
How many miners needs the network to stay healthy and secure. Not sure if 1 miner per human would be enough. It would as well close the door to all the multi-algo-pools (not necessary a bad thing).
it could again lead to the so much feared chinese centralization, just by private miners this time. Someone does not have a PHD in rocket science to figure out that there is the biggest population with access to internet/mining hardware and i personally could imagine that it could be easyly a 75% hashrate based in china. Again, not a problem for me, but following the arguments of others, it would be for them i guess.
How would pools be compatible to that?
Technically, how to differ if it’s 1 unit or 20 put together?
Pretty sure that in zcash would lose value. Less hardware/power in the coin, lower hash network, pretty sure it would result in a lose of value …
Actually that idea would be more userfriendly or easier if adopted by a miningpool than on the currency/coin/project itself. Not sure here, just a thought.
As said, i like the idea in it’s principes, but i doubt it will get many followers …
This would depend on the needs of the network and could be determined by the needs of the same network. From what I understand the hash rate, currently serves mainly for the separation of rewards per block. What matters is the decentralization element in separation of hash rate. If the hash rate itself is to increase or decrease significantly, the difficulty adjustment will follow shortly after.
It is true that China has the biggest population on Earth, followed closely by India. And as long as these people are free to make their own choices, that’s fine. An issue would be if a tyrannical government decides to make these decisions for them.
Pools should be able to operate only with hardware that is certified - linked to an individual for the specific coin.
People should still be able to put their hardware together - farm style if they decide to do so. The difference is that, the farm would not belong to one or few big investors as is now, but to a collective with an equally vested interest.
I think this is more of a correlation than a causation issue. What we’ve seen is the reverse- the trend is for hash rate to rise based on a profitability of mining, which is caused by the raise in a coin’s. market cap.
I don’t know about that.
Isn’t that what a project like Civic is all about?
It’s impossible to hold both the fact that ZCash is a privacy crypto and have the need to produce a gov ID to use it in the same mind. Whatever else is out there is irrelevant to the discussions here; this is the ZCash forum.
No? Privacy coins are the main place where such concept would be viable. Let me give you an example, if you know my name you can check me on LinkedIn and see my job occupation. You can look for me in Facebook and see me as a private citizen - the places I visit, my relatives, etc. But you can’t look in my wallet. Cryptocurrencies without privacy allow you to look into my wallet. Privacy coins on the other hand, don’t.
Your justification for the concept is more detached from reality, bizarre and strange than the actual idea itself.
Perhaps you should go and do your own ICO. I’m sure the world will love it. Then you can start your own forums for it and cheerlead for it as much as you want! GL! As a suggestion to help it along, can you post your bona fides here along with all necessary gov paperwork so we can “look you up” like you want?
The biggest problem is decentralized identity. Assuming you have that solved, then another potential problem is a centralized mining operation can pay 3rd parties to cooperate in mining on their behalf. They could hire large numbers of people in poor countries at low wages to register in the system and pay them to respond to POL requests when necessary. If they hire enough people, they can do a 51% attack. If you have both those problems solved, then you don’t need mining hardware. A proof of stake system where each registered person has an equal stake would work.