Quote from: toast on January 05, 2014, 03:55:54 AM

I've mentioned this in a separate thread but again it was in General Discussion so people didn't take it too seriously.

I have a theory that a Decentralization Fund run entirely from community donations could use its resources cleverly enough to create incentives for miners to switch away from large pools. It could be possible to subsidize small mining pool operators in such a way that mining pool operators are encouraged to cap their hashrate at 20-25% for fear of mass defection to a subsidized pool.

There are many ways to potentially structure such an incentive system but I believe it would not be as expensive as it might appear at first glance (a hard upper bound is around 200,000 BTC, but in reality it could be several orders of magnitude less). Even preparing bounties for pool operators to implement obvious incentives like merged mining and low fees is a fantastic start. Or, make bounties to improve p2pool.

A big part of the problem is simply that GHash and BTCGuild are more convenient and more miner-friendly than p2pool.

Perhaps the two ideas could be used in combination (a protocol change along with a fund temporarily subsidizing miners or pools that adopt/support the change). I'm personally most interested in a technical solution to the problem - hence my posting to this board.

My only issue with a fund alone is that it seems to leave loopholes for people to game the system (e.g. pools staying "small" but secretly colluding). For that reason, I believe the solution needs to be incorporated into the software/protocol itself.