https://en.bitcoin.it/wiki/P2Pool#StalesCould anybody be so kind to explain in more details, what does this mean?
On P2Pool stales refer to shares which can't make it into the sharechain. Because the sharechain is 20 times faster than the Bitcoin chain many stales are common and expected. However, because the payout is PPLNS only your stale rate relative to other nodes is relevant; the absolute rate is not.
What's PPLNS got to do with it?
Hello Rabinovitch,
The reason is in my opinion the following.
PPLNS is pay per last n shares. So lets assume that the last 200 shares result in a payment to the nodes that mined the shares. Lets assume that A, B, C and D mine and lets also assume they have the same hash rate. Further we assume that their stale rate is 0 (so each miner has a stale rate of 0). In this case each miner has 50 shares (this is not necessarily true in reality because mining is a random process) in the share chain. Lets also assume for simplicity that every share leads to an equal payment. In that case each miner gets a payment when a block is found that is equal to 1/4th of the block reward.
Now lets assume that A, B, C and D mine, but they all have a stale rate of 10%. This means that 10% of the shares of the network are lost. This means that to generate a chain of 200 shares, the network takes 10% more time than in the previous situation. Since they all have a 10% stale rate, they all wast an equal amount of work, so in the end the share chain of 200 shares will again contain 50 shares of each node. This means also that they have right on 1/4th of the block reward.
Now lets assume again that A, B, C and D mine, and they again all have the same hash power. But now A, B, C have a stale rate of 0, and D has a 50% stale rate. Now there is a difference in the amount of shares each node will have in the share chain of 200 shares length. A, B, and C will have 57.14 shares in the share chain, and D will only have 28.57 shares in the share chain. This means that D will get much less reward than A, B and C if a block is found. The share for D decreases, but the share of A, B and C increases.
So the relevance of PPLNS is that it pays a reward to a miner according to the number of shares it has in the share chain. The relative stale rate has an impact on the distribution of the reward, because it determines how many shares each miner will have in the share chain.
Of course the examples here are simplifications of the real algorithm. PPLNS comes in many different forms. You can find a more detailed explanation of PPLNS at
https://bitcointalk.org/index.php?topic=39832.
I hope this is an answer to your question.