Yes, a shorter timespan like it is the case now (100 blocks) seems to be acceptable. Anything longer, I don’t think so.
What would the benefits be to locking the coins up? I still havent seen any research / studies / stats to show that this will accomplish anything, infact I think it will cause more harm than good.
It might cause more harm than good for miners looking to quickly switch away from mining zec for profitability reasons. It’s good for Zcash for the opposite reason, requiring miners to commit to Zcash for a longer-term will stabilize protocol security. It might even push the price higher as miners are forced to make a choice.
Wouldnt this only work for the first 50 weeks and then everything returns to normal except now coins are locked for 50 weeks?
I dont see how this changes miners from switching to a more profitable coin?
How does this make them commit to mining Zcash, if another coin is way more profitable?
Like I already said, there will come pools that can afford to pay miners straight away for mining Zcash. They will have funds to pay out rewards right away, but will probably have 10% fee for mining. They of course wont lose anything, they will receive those rewards, just much later, but pay them instantly.
If I were GPU miner, I would still come to that pool, and receive rewards instantly, rather than to wait a year.
Result to this is GPU algo centralization on 1 or 2 pools.
This is a good point but I don’t know if a lot of miners here would accept a 10% fee… I certainly wouldn’t.
What is the alternative ? To wait for a year for your rewards ? 99% of the miners dont have money to pay for electricity costs of their mining for entire year while they wait. If you are the 1% you probably can.
If @zooko wants miners to be loyal, he should make good decisions, and create good future for Zcash, not blackmail miners (and only GPU miners, like ASIC miners cant switch between coins on the same algo).
Hey folks, discussion about this topic is now spread over this thread and the github thread (https://github.com/zcash/zcash/issues/3672). Maybe it would help organize things if we tried to direct process questions and “how will this affect me?” discussion to here and technical discussion to there. Not sure that’ll work, but we can try.
Here’s the process for deciding what software the Zerocoin Electric Coin Company implements and supports: (Note: this is not the process for the Zcash community to decide what it will do. The Zerocoin Electric Coin Company is not the Zcash community, and cannot control what the Zcash community does.)
- First, we do reading, research, and informal interviews with a wide range of community members, advisors, scientists, members of the Zcash Foundation, users, potential users, investors, etc. I’ve proposed this idea to maybe hundred such people over the last year or so, including at Zcon0. I also have numerous discussions with a variety of people — like basically every single day — in places like twitter, the Zcash community chat, and Telegram chat rooms. The feedback I’ve gotten on the time-locked-mining-rewards has been mixed, with a lot of people against it, with slightly more people in favor of it, and with the people against being slightly less vigorous in their opposition (not counting the people in this conversation!) than the people in favor were in their support, and the people against having a variety of different concerns or issues, most of which seemed answerable. A substantial fraction of the people I’ve talked to about it have just been uninterested in mining. I think mining is important! But it is also interesting to note that a large fraction of people actively involved in Zcash don’t care about mining and instead want to talk about other aspects of Zcash. (Much larger than the percentage of people involved in Zcash who actively care about mining!) I also asked the members of the Zerocoin Electric Coin Company’s Technical Advisory Board to review all of the proposals for Blossom, including the time-locked-mining component of the Harmony Mining design.
- We discuss (in public) technical details, including how these things interact with each other and with other parts of the system. That’s what’s going on right now on github.
- The final decision about what software the Electric Coin Company will implement and support is up to Nathan Wilcox, the Zerocoin Electric Coin Company’s Chief Technology Officer, although he listens carefully to my opinion, and we generally agree between the two of us. He approved the time-locking of mining-rewards before he left for a long winter vacation. In his absence, I’m the one responsible for making the final call on this, which I’m going to do this coming Monday—the 7th—so that we can move on with the specification-writing step and get the Blossom train back on schedule (https://z.cash/blog/the-zcash-network-upgrade-pipeline/).
- The result of that decision determines what software the Zerocoin Electric Coin Company will write and support. The schedule for the Company to write and ship new software versions with accompanying testing and vetting is shown here: https://z.cash/blog/the-zcash-network-upgrade-pipeline/
Now about the “how does this affect me?” part, I think that a lot of people may not be appreciating the effects from the difficulty adjustment algorithm, and other such “second order” economic effects. I think some people might be imagining that if they choose to mine the new Zcash alg-B, it would be just like mining another coin, or like mining Zcash used to be, which for most people was “barely profitable over the long-term”, except that the time-locking would basically be taking that “barely profitable” and reducing the effective per-month reward drastically, i.e. basically getting 1/12th as much reward as per month as you would, therefore making it change from “barely profitable” to “loss-making”. But that’s not how mining works! Since each miner is sharing the total reward with all other miners (in proportion to their respective hashpower), and the difficulty adjustment algorithm changes the difficulty to reflect this, then the time-locking of rewards means that if you are more willing and able to commit to mining for an extended period than the most common type of miner, then you’ll probably make more revenue than if we didn’t have the time-locking of rewards.
Some people may also be failing to appreciate the additive effect of continuing to mine week after week. If you mine Zcash continuously, then after you’ve “ramped up” over the course of a year, your reward during any given week would end up being just as high (actually higher as described above) than if there were no time-locking of rewards, with the additional benefit that you are guaranteed a “trailing reward” no matter what happens after that point.
For example, imagine in the future, if you’ve been mining Zcash for a while, and the price of the coin is going up — yay! But then the difficulty factor skyrockets so that your mining reward drops. Well, with the time-locked-rewards, even if the difficulty skyrockets and makes your hashpower almost useless you’ll continue to reap the benefits of the trailing coin rewards for up to a year, which could be great for you if the coin price is going up over that time. This would reward early adopters who earned their mining rewards during the first year and got paid out during the second year at the expense of late-comers who started earning their mining rewards during the second year.
For Users and Holders
Finally, I’d like to emphasize the other side of this deal. Mining is an exchange between the users-and-holders of the coin and the miners. The fact that there is a mining reward at all is a vast transfer of wealth (currently $400,000 every day! https://messari.io/onchainfx/view/77B2EB1D) from holders to miners. When I talk to people about mining issues, I sometimes get the feeling that some of the people I’m talking to are thinking about one side of the deal (e.g. miners), and other people I talk to are thinking about the other side (e.g. users and holders), but few people are thinking about both sides. Zcash needs a mining system which is beneficial for all parties, especially users, because they are the ones whose economic choices are the basis of all the financial benefits of miners and of holders.
So, as I said above it isn’t really the case that the time-locking of rewards is actually reducing the reward transferred to miners. It’s actually shifting who chooses to mine. For people who are willing and able to commit to mining Zcash, it will actually make mining more profitable and more predictable. But the way it does this is by pushing out those miners who are not willing or not able to commit to long-term mining. And I think this is good for the users and holders. If somebody can’t afford the costs to commit to mining Zcash steadily over time, then it’s not that great for the Zcash users and holders to have that person as a miner, compared to if we can instead give that reward to a longer-term, more dedicated, more reliable miner. (And as for whether it is a good idea for the miner, well… on the github thread someone mentioned “how could someone pay their rent during the first year”. Well, it’s not my business to tell other people how to live their life, but people really shouldn’t be depending on cryptocurrency mining of any kind to pay their rent—with or without time-locking—because of price volatility. Time-locking can make it safer for someone to depend on cryptocurrency mining to pay their rent by smoothing out the volatility in difficulty factor, but it can’t smooth out the volatility in price, therefore you shouldn’t do it unless you will continue to be able to pay your rent even if your mining project completely fails you.)
Suppose there are two potential miners, and one has to—or chooses to—immediately sell all of the Zcash coins they make from mining, but the other is willing and able to retain some of the Zcash coins. Then the latter is a holder in addition to being a miner! They are a more dedicated and incentive-aligned member of the Zcash community. The one who is both a holder/user and a miner has the right incentives to protect the entire network and all other users from attacks, disruption, or bad service. The first kind of miner—the one who can’t or doesn’t care to hold on to any of his Zcash coins—would switch to mining a different coin if that became more profitable, or might even rent out their mining power to https://www.nicehash.com/, which is more or less making their mining power available to random people to rent for [https://www.crypto51.app/](http://rollback attacks). The second kind of miner won’t do any of those things, because they are—in addition to being miners—also long-term believers and supporters of the Zcash mission and the Zcash community. For the good of the community, I want to shift more of the reward in the direction of those kinds of miners.
Okay, so if you’re reading this and thinking primarily from the perspective of a (potential) miner instead of from the perspective of a (potential) user/holder, then please go back and read the section above about For Miners. I think this will turn out to be better for you, in addition to being better for users and holders! We need sincere, dedicated people to do Zcash mining, who aren’t doing it just for the money, and who are prepared to stay with us and continue supporting the network for the long haul!
I PROPOSE we time-lock the FOUNDERS REWARDS.
With FOUNDERS funds time-locked they “would be a long-term investor in the value of ZEC and would have an economic incentive to protect the network,”.
We will start time-locking the FOUNDERS REWARDS and payout a small percentage each week over the next 4 years. Doing so will “probably make more revenue than if we didn’t have the time-locking of rewards”. ALSO the FOUNDERS will get to "reap the benefits of the trailing coin rewards for up to a 4 years"
Why does this sound dumb when I say it about the founders rewards?
I find this hard to belive. What benefit is there to locking peoples coins? You have not shown any research, studies, or information that shows this will even have the effect you are looking for. Are the people infavor of this the same people that dont mine AKA wont have THEIR coins locked.
You have no proof of anything, you just say it will “make miners support the network”. From a miners point of view this is another middle finger to us, and will just force more miners off the network(this the goal?).
We are the ones spending money to pay and secure the network, we are the ones giving you the portion of the mining rewards from the blocks WE mine, and yet you keep treating the miners like they are just slaves to the network. And are not a big part of the community, but keep pushing changes that effect them the most.
How does this make miners commit? I still dont understand it. Locking coins doesnt make you more money, stop with the fallacys.
If Zcash is making me $1 today, and NameACoin is making me $5 today, why would I continue to mine Zcash? I would jump to the other coin, even if the coins I have already mined are locked. How does this change my present/future rewards? I dont understand how this is helping?
I would mine another coin, even if ZEC was worth more, if I knew my coins would be locked for up to 50 weeks. The reason you get interest on money that is locked up, is because you could be making money with that capital you have locked up. Having money you cant use is a waste.
Are you serious? Why would I want to have my coins locked up when I could be selling the full amount of MY coins when its at its all time high?
How does having my coins locked up increase their value, when I am unable to capitalize on their use?
I dont see how you think doing your work, and than having your boss pay you 2% of your paychecks each week would ever be a good idea.
Zooko, I believe it would be absolutely irresponsible to make a decision on this only just after I’ve posted simulations that cast serious doubt on the security basis of dual PoW, with no time to consider the implications of those simulations.
Is Zcash Still For You?
I would like to point out that this argument completely fails to take account of the basic point that a miner is initially paying costs such as rent [•] and electricity for little reward. The speculation that mining pools might be prepared to pay out anyway, effectively loaning their client miners money to cover the initial costs, is purely speculation.
Yes, the difficulty for alg-B will be lower reflecting the fact that fewer miners are likely to take this deal. Does that mean that the time-locking is a good idea? No; the difficulty will be low because the hash rate is low, which is a serious security problem.
[•] Zooko seems to have made an assumption that I meant rent to a landlord. While that does apply to some miners, I actually meant it also in the more colloquial sense of paying any kind of fixed cost, which includes for example business rent, property taxes, and so on.
I think you need to distance yourself a little from the topic, although you are acting in good faith, I don’t think you are acting as a scientist.
Everything points out to dual mining being a bad idea, as posted by Daira, and your arguments here are wishful thinking at best. (The mandatory holding is good because price might go up and then it’s all good? C’mon, the completely opposite could happen and people can lose -90% of their work again).
Furthermore (from a github comment, also from Daira uh), this could delay the depreciation of T-Addresses which should be priority #0 for Zcash.
From what I can see, people were initially upset about ASICs and the Emission Curve (which I agree it was a bad choice), and suddenly we ended up here discussing dual mining algorithms and lock-in rewards.
Daira, please stop slinging accusations. It’s unprofessional, it’s hurtful to me personally, and it’s probably unnecessarily alarming to community members who see that and think that we might be behaving irresponsibly. That’s not the case. There is going to be plenty of time and a well-honed process (https://z.cash/blog/the-zcash-network-upgrade-pipeline/) to make sure that the batch of changes in the next Network Upgrade are safe and that they protect users and increase the usability and security of the network.
The next step in that process is that it is my job to specify the requirements, so that we know what it is that we need to specify, get internal and external security audits of the design, implement, get internal and external security audits of the implementation, test, etc. You are doing a great job of helping with that work by raising the existence of potential problems and working out the technical implications of various design choices. Please continue with that, and please stop with the accusations. I’ve looked briefly at your simulation results and I’ll look at it more carefully again tomorrow. I’m pretty sure it does not reveal a fatal flaw in the whole concept of Harmony Mining, but if it does, we’ll have plenty of time to sort that out.
Is Zcash Still For You?
I didn’t sling any accusations. You said that a decision would be made on Monday the 7th. I think that it would be irresponsible to make the decision then given the lack of time before that date to explore implications of the simulations I did (which may affect whether we do dual PoW at all). The decision should be delayed, even if that means a delay to Blossom.
Please retract the statement that I have done anything unprofessional. I have not. On the contrary, publically discussing my concerns about both the proposal itself, and the decision-making process, is ethically necessary to discharge my responsibilities to the Zcash community.
As said before, while the intention of making miners more invested in the ecosystem is good I think this is a horrible way to enforce it. Miners will either mine a coin because they anyway believe in the long term value of it or because it is currently most profitable to mine given their current setup but not because they are forced to hold every mined coin for a prolonged period of time. As company driving the development of Zcash I see it as your responsibility (which is compensated by the founders reward) to make the coin attractive to investors to ensure a competitive price and thus a competitive mining profitability.
Also you completely ignored the argument given beforehand that locking rewards for a full year will require miner to pre-fund their running costs of their mining operation (energy & labor costs) for the same period of time. This will only allow well funded mining operations to enter the market and cause further mining centralization.
I already mentioned that there will appear pools (run by rich pool owners) that pay out Zcash right away, but take 10% fee or more. Miners will switch there. But I forgot to mention Nicehash. People will sell their GPU hash to Nicehash and similar platforms, as they pay out in Bitcoin right away. Just a thought You will achieve nothing, but even greater disloyalty to the network…
Question to the participants in this thread: what is your opinion of P2Pool? Because that decentralised PPLNS mining pool operates almost exactly like how this proposed change would function. I’m curious if anyone has direct experience with P2Pool they could share.
See also my comment on the GitHub issue:
PPNLS works over a period of 8000 blocks (just under 2 weeks), not 201600 blocks (50 weeks). That’s a huge practical difference in the latency between paying the costs of mining, and obtaining the reward. Also, PPNLS is not motivated by trying to disincentivize miners from stopping mining; the latency is just a side effect of technical decisions made for other reasons.