Releasing mining rewards over 50 weeks

[zooko]

Earning the time-locked mining rewards is opt-in. If someone wants the time-locked mining rewards that the users/holders are offering them in return for mining services, then they can mine and they’ll receive those rewards. If don’t want that, then they can choose not to enter into that deal. That’s voluntary, consensual cooperation. Note that in the the next Network Upgrade (NU2 — Blossom, activating in the fall of this year), the new time-locked-rewards feature will only apply to the newly-introduced alg-B mining, not to the current miners.

[Shawn]

@zooko

I wonder how many other people on this thread are objecting to “lock up all coins until 50 weeks later” when the actual proposal is “lock up all the coins and then each week for 50 weeks, 1/50th of the coins unlock”. Make sense?

Indeed, I think that is a big point of misunderstanding in this thread.

Perhaps rather than calling it a 50 week Lock up, calling it a “50 week GPU friendly slow start” or “12 month ramp up” to full GPU mining returns would be more explanatory.

[bit]

When optional and unfair and competing on a dual POW with a fair alg-A, alg-B looks like a security hole as Daira said needs more investigation.
An unnecessary risk which just creates complexity and user concern.

[anon75406386]

Old miner here, still believe in Zcash, although the trust keeps declining.

I myself would never let a Pool hold on to my coins, same as I dont leave my coins on a Exchange.

Mining for me allways was non commercial, let me explain this,
( because in the end, I need to get some money back for Power and Hardware ) I mined Zcash at times at a loss, same with Eth. Why ? because I have / had trust in the future.
In a market that’s stabil, you can follow this path, depeding on how deep your pockets are, or on what price your wiling to pay. If you needed money, you just could sell, with the price nowadays, A GPU miner allways mines at a loss and sells at a loss. I payed 500 euro’s per month on power ( hardware I wrote off the moment I bought it, I am aware some people ( and you should ) also take this in considerration ) without selling any coins, A real Hodler.
Thats what I mean with non commercial, mining at a loss, because you believe in the future.
I saw a lot of miners that had to sell on a monthly bases, just to cover the powercosts, they are gone, because since asics, that’s no longer doable with a price that keeps declining.
For me it was more intresting to instead of mining for 500 euro per month, to buy coins for 500 euro.

If I would mine Zcash again, there should be some major changes, 1 is that the price should be a lot higher, so I have at least a break even point, because non commercial mining is done for me. ( no one controls this, maybe with a tinfoilhad on, ok, but dont wanna go there )

2 I would never accept that my rewards get locked, as long as the coins aren’t on my wallet, they aren’t mine. So this proposal would make me say, No, I am not willing to mine under this conditions.

And to @daira @zooko, I can only speak for myself, but a lot of trust in Zcash on my part, is that people like @daira and @bitcartel are part of it. I strong believe in their knowledge to get Zcash forward on the road regarding the technical and core issues.
But hey, that’s just my 0.00000001Zcash

[Lisfin]

@zooko

I also don’t wish for you to get involved in a debate ;-), because you are a world-class cryptographer and there is much important cryptography that you could be doing that would benefit either Zcash users or other people around the world in the coming years/decades.

Is it also because it seems he is against your changes?

Having him try and tell you that you are making a huge mistake with Zcash, that isnt beneficial? Why CANT you listen to other people Zooko? Everyone on here is against the change, there is zero proof you will get what you are even trying for. “But the community is more than the miners”…EXCEPT you keep making decisions that effect the miners the most…

@zooko

But, yes, you — like many others on this thread — appear to be neglecting the second-order dynamic effects due to mining being a near-perfect competition between all players, with low barriers to entry and exit. My argument in Releasing mining rewards over 50 weeks is not that receiving coins that you can’t spend (due to a time-lock) is better for you than receiving coins that you can spend right away. That would be an interesting argument, and there might be something to it!

What you “appear to be neglecting” is you have no concept/proof/study/research to support your claims. And infact, I belive the opposite will happen. Why would I continue to mine a coin that is just as profitable as another coin, HOWEVER the first coin locks my rewards for upto 50 weeks…Why would I want to mine it? Sure, if Zcash becomes 5 times more profitable you might have people jump over to mine it, but was this because of time-locking or the price going up?

@zooko

But that was not the argument I was making. My argument is that—due to the second-order effects of mining—miners who are above-average in their willingness and ability to mine long-term will receive more coins with this feature than without it. (Probably just a few weeks of continuous mining will be sufficient to make you above-average, at least at first.)

Please explain yourself, How does me mining for 1 year with NO locking, vs me mining for 1 year WITH locking, increase my rewards? The only way this is true, is if you are forcing other miners off with this change, thus reducing the difficulty.

Is reducing the amount of miners your goal? This is the only way you would make more coins in the same amount of time, how can you not see this? Maybe I am missing something? Please explain how I get more coins with time-locking

How does forcing people to lock the coins, change the mining at all? I dont understand. If Zcash is making me $1USD a day mining, how does locking my coins increase the amount of coins I will get? It does not. It reduces my choices. It reduces my freedoms.

It does not incentivises miners, it punishes them.

[Lisfin]

@Shawn

But I will say one important way that hobby mining benefits the Zcash Ecosystem is the miners have ZEC to spend on goods and services. My concern would be that a time delay approach seems to run counter to a key aspect of driving Adoption; which is having more Zcash in more hands (sooner and more often) to help drive users to request/build services that accept Zcash.

I agree with everything you say here Shawn, This is why I am losing faith in ZEC.

Sapling was the priority, “because we need more adoption”, “we need more people USING the coin”, “Sapling will allow mobile devices to work with ZEC, and will increase the adoption and use of the coin”. Sorry we dont have time to do other things the community wants, because we are so invested in Sapling right now.

Now we are being subjected to a proposal that PREVENTS the use of coins. Wasn’t adoption the main reason you guys were rushing to get Sapling out? Trying to get more people USING your coins? Now you turn around and try to time-locking freshly minted coins so we CANT use them?

With talks of dual mining, trying to bring back GPU miners, WHILE protecting the ASICs, it seems you are just trying to please eveyone…

I dont see how time-locking rewards will do anything that Zooko has proposed. He has nothing to backup his claims. And infact, the more he talks about the reasons why, the more holes in his arguments. He has not made 1 valid reason for time-locking, even tho I could think of a couple, he seems to miss them.

Once again, the “majority” of people are against time-locking, but guess we the “community” voted on this too.

[Lisfin]

@vgm

As an ASIC miner I’ve mined hundreds of ZEC, which I’ve held onto in the hope that my investment would appreciate in value. The opposite has ocurred and I’ve incurred significant losses as a result, and I’m sure there are many others on this forum who are in the same boat.

I am very sorry to hear you might have lost money trying to help out ZEC. I was very vocal when ASICs were annouce saying they are a scam and you have a 90% chance to lose money buying them, UNLESS you are first or second batch owner. They have done nothing but fracture the community and removed 80+% of the GPU miners that were mining at the time.

@vgm

Large farms and ASIC manufacturers on the other hand have certainly been dumping their mined ZEC for BTC. This is indisputable as observed by the precipitous decline in the ZEC/BTC pair. So my question is why should the time lock be restricted to GPU miners only? It’s neither fair nor likely to achieve the desired outcome, simply because ASIC farms will still be able to dump their mined ZEC without delay.

This is what I dont understand. ASICs are the ones dumping. We never had this problem with GPUs. GPUs keep alot of value for upto or more than 3 years. I dont need to dump coins trying to make my money back in the 3 months that my ASIC makes money, before it costs to much to run.

Why would you not time-lock the ASIC that are the ones dumping the coins? There isnt even any GPUs on the network right now, so why GPUs getting punished for the dumping?

Zooko makes zero sense. And has no proof/evidence/facts

[Trololino]

Chill dude, havent you read his post

A note about controversy and culture

WeDear folks: We’re have another full-blown social controversy! Like the Great ASIC Mining Controversy of the summer of 2018, the less widely-known Zcash Ecosystem Fund Controversy, and numerous other smaller controversies that some of you remember but most of the readers of this note probably don’t. First of all, I’d like to say: This is fine! [download] But seriously, this is the sort of vigorous disagreement and passion that you should expect from an open, transp…

He says he will ignore the posts and replies that do not suit him
Also people will use Nicehash to GPU mine Zcash, and receive rewards in Bitcoin instantly if they go through with their suggestion. He will accomplish nothing.

[Lisfin]

@_eric

When I worked in a school, with summers off, my paycheck earned in 9 months of work was spread out over a full year. Initially I was upset that I didn’t get the full amount right when I earned it, but after doing it a few years realized I preferred to have ongoing pay through the summer for ongoing expenses (rent, utilities, etc.).
I think time-locking mining payments will have the same effect. Miners might start to match expected pay with things they can purchase with Zcash.

Now think of this. Would you still take your check like you did before knowing…

You have no idea who pays your pay check.
There is no legal recourse for you if they dont pay your check.
There is no way to find the guy that didnt pay you your check.
Plus the other things Boxalex said.

Alot of miners use a pool, trusting a pool with 1 years worth of money seems very risky to me. You dont know anything about the guy running the pool.

I will give you that one benefit that you mentioned, it FORCES you to be more responsible with your money. But you also lose the freedoms you had with money that is YOURS, you could of had that money invested for 1 year and made alot more money with it, like your boss is doing.

[_eric]

@Lisfin that’s a really good point. If this setup incentivizes scammy pool operators outside legal recourse to setup a pool and run off with a year’s worth of miner rewards, that would be a bad consequence.

[wobbzz]

I won’t trust a pool to hold the keys that control my funds for a year. I also think that we’re getting ahead of ourselves by making a decision on an important matter such as this so soon without more debate.

[root]

One consequence of this might be that larger farms and centralized mining pools could have trouble supporting Zcash due to their larger immediate costs. In my opinion, that would be a good outcome.

Smaller miners would be more able to handle delayed rewards (less rent, smaller electrical bill). For a medium sized miner like myself, it’s somewhere in-between. If pooled mining could be decentralized, P2Pool style, that would be a massive win. Mining pool centralization and mining centralization in general has been a problem since the start.

As others have said, the introduction of this may actually increase the price, making mining more profitable under these new conditions. It’s really hard to project what might happen with an idea like this. I’m going to keep an open mind before solidifying an opinion.

[anon75406386]

Agree with you there Root.
But still curious what Daira brings to the table, it is a good idea, but it has to be solid and safe.

And I follow Daira on that 1, since I think she is knowing what she is talking about. ( The technical issues that is )

[zooko]

Thank you for the input, Ariel. I, too, want to make Zcash mining accessible to a variety of such people — teenage gamers, Venezuelans and Iranians, hobbyists with an in-home small scale mining farm, etc. And contrary to what most people have posted on this thread, I think that the time-locking of mining rewards will not bar those people nearly as much as people seem to think. People aren’t understanding that if you have the willingness to mine steadily for awhile, then this gives you an advantage against bigger, more well-funded miners who would otherwise push you out. So this may exclude certain groups of people, but it may include others, and in fact potentially more.

That said, I consider aligning incentives between miners and users+holders to be an even more important goal than the above.

[Lisfin]

@zooko

And contrary to what most people have posted on this thread, I think that the time-locking of mining rewards will not bar those people nearly as much as people seem to think.

Your right Zooko, it will not BAR anyone, it will make them choose to go mine another coin that has the same reward(profits), except they get the money up front. Why would I mine for the same amount of money to have it locked up for 50 weeks? I could be using that money to make money.

@zooko

People aren’t understanding that if you have the willingness to mine steadily for awhile, then this gives you an advantage against bigger, more well-funded miners who would otherwise push you out.

You keep repeating your opinions as if they are facts, you are just making up examples that have never been tested or have had any studies.

Please help me understand. I haved asked again and again, Show us anything that supports any of the claims you have made. Nothing you keep repeating is based on any facts its all YOUR opinions.

Show us why you are so sure this is the right way to go for Zcash? Your right, I dont understand how you have come to this conclusion, can you please show us any information backing your claims.

Is this how Zcash is going to be run now? All I am asking for is some substance that proves what you keep repeating. WHY do you believe this will have the effect you are looking for?

[Lisfin]

@root

As others have said, the introduction of this may actually increase the price, making mining more profitable under these new conditions. It’s really hard to project what might happen with an idea like this. I’m going to keep an open mind before solidifying an opinion.

That is the reason people are in this “controversy”. This has been proposed with nothing to show it will have the effect they “think” it will have.

Lots of people have raised all types of issues with these proposals, showing how it has lots of flaws.
A.makes you have to trust pools for almost a year.
B.reduces freedoms of your coins.
C.hurts only GPU miners. why?
D.Dual PoW is less secure.
and many more.

To just glance over that list of flaws and to ignore them…and still accept the proposal with no proof at all to support it, seems like you would have another motivation at that point for going along with it.

All I can do, is keep asking for ANY science on the logic behind this change. Im open to it, and have yet to see any posted by the people supporting it.

[zij]

@daira

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.

I have supported/mined Zcash since the first few days of mainnet mining and I back Daira’s comments above. Pools are unlikely to effectively loan to their client miners so locking in mining rewards for 50 weeks means that unless a miner has enough financial backing (meaning the big farms), they will not be able to mine and pay the electricity costs to get them through to the point they have enough ZEC in their wallet to convert and pay their bills.

If ZEC/USD rate dramatically improves, then it could be a different ball game - but with current market position, I can only see this “locking in mining rewards for 50 weeks” being detrimental to ZEC…

[den]

@zooko

Sorry to be unclear! I wonder how many other people on this thread are objecting to “lock up all coins until 50 weeks later” when the actual proposal is “lock up all the coins and then each week for 50 weeks, 1/50th of the coins unlock”. Make sense?

It seems many still believe the coins will be locked up for 50 weeks before payment.
The above comment corrects this. It’s still not very clear though …

It would be nice to have a very clear example of how it would work, like Bob has a graphic card and wants to mine zcash … HE has an electricity bill of that much every x months and he gets y ZEC from mining every z weeks…

(I’m in a country where electricity is so expensive that mining is just not and probably never will be an option … )

[daira]

What concerns me most (and I’m not saying this is the only valid concern), is the interaction between time-locked rewards and dual PoW. Zooko does not appear to dispute that time-locked rewards will reduce the alg-B hash rate; I’m glad that is something we can agree on.

The rollback attack simulations I did over the weekend make it clear how serious a problem it is when one of the PoW algorithms has low hash rate. I’ve just written up my conclusions about the simulations, of which I’ll paste the most relevant part here:

These results contradict the previous statements I made about parallel dual PoW, because of the error I made in thinking about the problem the adversary is faced with. Roughly speaking, parallel dual PoW is as bad for security as I thought alternating was, and alternating is very bad.

Remember that the main purpose of introducing Harmony mining is supposed to be to improve security and mitigate mining centralization. There is a secondary purpose in “more fairly” spreading mining rewards (whether it actually does so when rewards are time-locked is a heavily disputed question). However, in my strongly held view, this secondary purpose cannot be sufficient if the introduction of Harmony mining actually causes a regression in securing the network against rollback attacks. According to the simulation results, it is very likely to cause such a regression under realistic assumptions about the initial network hash power of alg-B, and the adversary’s ability to obtain competing hash power. Even if alg-B hash power were to increase substantially later on, there is still a security regression for as long as it is is less than the alg-A hash power.

At this point, my considered opinion is that these results set back the state of development on dual PoW to a “more research needed” stage. I don’t see any easy fix, and I don’t even see difficult fixes at the moment. According to the NU schedule, proposals that are only in that stage at this point should be rejected from Blossom.

I apologize for the erroneous analysis that may have contributed to a perception that the parallel dual PoW option was more secure than it actually is. Mistakes happen, and it’s good that we caught this one.

Note that my conclusion is that we shouldn’t do Harmony at all. Other ZcashCo engineers and managers may agree with me or not; I’ll let them speak for themselves. Obviously, there would be some political fallout of abandoning Harmony after having announced it; however, in my opinion the security considerations override that. In any case, the point relevant to this thread is that the decision to time-lock rewards, by causing a likely reduction in the alg-B hash rate relative to unlocked rewards, would make the problem revealed by the simulations worse.

[daira]

@Lisfin

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?

To be fair, the Founders’ Reward effectively is time-locked, if we compare it to a premine. The straw-man / satirical proposal here would be effectively time-locking it twice, or equivalently just extending the period of the lock. So this is not a good argument. (There are plenty of better arguments against miner reward time-locking specifically.)

[Disclosure of interest: as a Zcash developer, I receive a share of the Founders’ Reward.]