Quote from: sugarpuff on June 18, 2014, 03:47:34 AM

Wait, I'm confused, if hosted mining catches on, this doesn't provide a proof-of-honesty, it provides the opposite. That "if clients demand proof-of-honesty" is a very big IF that seems to go against the spirit of the original bitcoin paper (demanding an algorithmic answer, not a human one).

Yes, the way to read this is: if hosted mining catches on, but users are suspicious that the service may be cheating them unless the host provides proof to the contrary, then this puzzle may be effective since it's designed to *prevent* such proofs.

Imagine a user that says "I'll hire a hosted mining service, but only if they can prove to me they aren't ripping me off; otherwise I'll solo mine." Then this user would hire the hosted mining service in the current Bitcoin puzzle, but would solo mine given this modification.

My interpretation of the "spirit of Bitcoin" is that it is about *trust in a population's predictable response to incentive structures,* rather than *trust in the benevolence of oligarchs* or *trust in the responsiveness of vigilantes* etc. The point is that the behaviors we see now and will see in the future are largely a result of the incentive mechanism we implement. Altruism exists, and campaigns appealing to miners' long term stake in the stability of Bitcoin may be effective, etc. -- but correctly designing the incentive mechanism is an essential concern. I don't think we've fully tuned it yet, and the large mining pools are an example of this. Accurately predicting how people will react to the wide array of possible incentive designs is still an open research question.

This proposal is counterintuitive in that it involves engineering distrust between self-interested parties (pool members), as a way of encouraging safe behavior (solo mining) overall.

Also, in the interest of being self-contained, I repeat that this proposal is a useful technique but not a panacea on it's own. Several other non-trivial changes would need to be adopted at the same time as this puzzle, in order to provide the same low-variance option to solo miners, who otherwise would switch to Dogecoin or quit altogether.