Commenting with my opinion:
I think your talking about pools right? Having a pool trusted with your coins for close to 1 year seems like its asking for problems.
You asked about tax reasons. So in your tax decleration it doesn’t matter much who actually owes you the rewards/income. Beside that i’am not sure how it’s planned exactly. In my opinion there are 2 possible options:
a.) Miningpool gets the full reward and must pay out the over 50 weeks. Seems at first view logical, but on second one that’s crying for corruption, fail, scam, whatever.
b.) More logical would be that even the miningpool itself gets the reward delayed. No idea what code implentation is necessary for that, but it seems more logical to avoid the problems mentioned in point a. I maybe miss another option, but these 2 come immediatly in my mind.
I would much rather have my money in my pocket and not have to trust a random stranger with my money and hope he does the right thing and will pay me back when its time. Its hard enough to trust my bank.
No doubt, fully agree with this. Leave alone your expenses like electricity aren’t delayed.
What other coins force you to trust the pool operator with your coins for close to one year after YOU mined them, they are YOUR coins?
I’am not aware of any similar analogy, hence i asked for an analogy without response so far.
The next closest thing similar to these i have encountered is the NLG POS coin. You lock your coins for a given period. If i remember right minimum is 1 month, longest 2 or 3 years (can’t remember it exactly). Based on your locktime you get interest (rewards) back. There are 2 main differences, first of all it’s voluntary and second you get interest. Both are missing with the gpu mining algo. But as said, it’s the closest thing i’am aware of.
This was proposed by Zooko, … Here is the goals that he states.
That way, every miner choosing to mine the new algorithm would be a long-term investor in the value of ZEC and would have an economic incentive to protect the network, regardless of whether they were mining with ASIC, GPU, CPU, or something else.
I see some controverses here:
- IF this was indeed the intention why not the same delayed timelock reward payout for asics too?
- IF the intention is to have a long term investor protecting the network, POS would be the better option than interestless witholding mining rewards.
- Not many/every miner can afford to mine many weeks for literally free and pay for electricity meanwhile.
- there is a good chance this will backfire driving away miners instead leaving the 2nd algo exposed to attacks due low hashrate.
Lets say we do lock coins up for 50 weeks. I would like to hear more benefits to this idea, im struggling to add some.
- Forces people to be more invested in the network.(Is forcing people a benefit?)
- Prevents instant dumping of coins.(Cant sell the coins I own a benefit?)
- MIGHT help the price. (yaa a real benefit)
I would like to counter these arguments:
1.) Actually you would force miners away in my opinion. You hardly can force them in with this interestless approach.
2.) That’s only temporary. In 50 weeks this would be balanced due my calculations. The temporary effect would be 50 weeks, after this you get regulary payouts, enough you mined these 50 weeks. Hard to follow this calculation but i’am pretty sure it’s like that. In 50 weeks the dumping would be the same like it’s now.
3.) Again, see point 2, only temporary for 50 weeks, if at all. Have in mind that the asic mined coins are still dumped. Actually the 2nd algo wouldn’t be a price benefit at all IF the block reward for asics stays the same and there are additonally gpu mining rewards, no matter if delayed. The daily ZEC mining rewards would increase, that’s not going to help price in my opinion IF the asic reward stays the same.
- You lose freedoms you currently have with your coins.
- You have to trust pools for 50 weeks.
- Does nothing to fix the real problem. Why are people dumping in the first place?
- Might make it harder for smaller miners paying bills.
1.) Agreed. It’s actually a huge portion of centralization in my opinion forcing whatever to happen.
2.) Agreed, 50 weeks are a long time. I have so far been ripped by 3 pools that just deceased.
3.) I can only speculate about the real intention or problem why the 2nd gpu algo is being introduced. One thing is bringing gpu miners back, not the best approach IF this is the main reason. The next one is there are security problems with the asics arising. Yesterday i checked a chart showing that up to 10% daily blocks at a zero excess cost in difficulty are mined. Still waiting for an answer if this is acceptable and normal.Means as long as we don’t know what the problem or intention for the 2nd algo is we don’t know if it’s a fix or not.
4.) Not only for smaller miners, this should apply as well for bigger miners as well. It again leads toward geographical centralization towards low electricity regions, simple as that. Just logical that the mining facility that pays 2 cents per kw/h compared to the guy with 20 cents per kw/h has 10x less trouble with the electricity bill. It simply will shift hashpower to the regions where the lowest electricity prices are, just logical.
Just a few I thought of. Also, I dont think taking current freedoms away from coins is the right approach under almost any circumstance. Crypto is suppose to be the peoples money. What are YOU Zcash?
Agreed. Expect if it’s voluntary in exchange for interest being paid. Leave alone the unfair factor versus the asics which don’t have to deal with timelocked coins.
And what is Zookos main goal with this? It says he wants miners to be “long-term investors”, but what does he hope to accomplish? Is there any data or proof showing this will have the effects that he is wanting?
Actually that’s one of the main problems i currently see with ALL steps Zcash is doing. Nothing is researched, nothing is checked forward, nothing is being prepared for, no papers, no research, no consulting with experts, no nothing. In best case some lagging delayed research after given facts that doesn’t help much either (See the asic research). That’s amateurish in my opinion. And i even wonder why the foundation is not stepping in here asking for researches or whatever. Damn, there is even no research IF this could have some legal consequences for ZEC, the very least thing someone should do to be on the sure side. Speakless about this one.
This is kind of open to interpretation…
“every miner choosing to mine the new algorithm would be a long-term investor in the value of ZEC and would have an economic incentive to protect the network”
(1) What does protect the network mean in this instance?
(2) Is this about hashrates and not price?
(3) Does he NOT want miners selling the coins they own?
(4) Does he want us to HODL or use the coin?
(5) Is he just trying to artificially raise the price of Zcash by changing the rules?
None of these makes actually much sense and each of these would have a better solution:
(1) Someone should think the network is protected allready, in case it’s not, we miss some information. But in case the intention is indeed protecting the network there are better options than timelocking mining rewards in my opinion. Again, the approach has a huge centralization factor in itself.
(2) Neither hashrate nor price makes sense.
(3) Again, no sense. It would be only temporary and compared to the asic payout which still would be dumped it would have only a minor effect anyway.
(4) If the intention is to hodl, only POS would fit in here. Delayed payouts would only have a limited affect on HODL, as the asics are not affected by the timelock the whole HODL argument doesn’t hold true anyway. Using the coin doesn’t hold true either, as you can’t use something you don’t have in your hands.
(5) I hope not. Artificially raising something always works for a short time and backfires absolutly always. One of the reasons i mentione all the time the inflated/fake volume ZEC has. It will backfire at some point more hurting than it helps right now. Sad enough no action is taken here either.
Just my opinions. I personally can’t find anything ok with this requirement at all, like with the whole blossom harmony upgrade. Now with these details about timelocked gpu rewards the word “harmony” is totally wrong choosen as it’s everthing but not harmony, lol.
For all the possible intentions/reasons you mentioned a hybrid design of gpu pow/POS would have fitted way and much better. Than, and only than it would make some sense, maybe even with timelocked mining rewards to have something equal to the POS rewards and an incentive of less POW dumping.
But having Asics unchanged with full rewards immediatly and GPU delayed doesn’t accomplish anything, it makes things even worse in my opinion from every aspect that comes into my mind, beginning from security to legal problems…