Quote from: john1010 on October 02, 2018, 02:42:52 PM

I just saw this statement on the telegram conversation and it will help us to understand the "cn7 bug" this is very interesting information and it could help us out to get some knowledge on what happening on the network hashrate of XCASH

For people who still think there is a 'cn7 bug' and are not convinced the high hashrate network is from nicehash, read up the following:

There is some interesting discussion about the network hashrate here, and I will try to answer it. First of all, we have mentioned the potential Nicehash issue in the whitepaper, and this is something we are well aware of. I have been myself a long time miner, which led me to start a mining firm in September 2017. Let me tell you that the difficulty adjustment lag does not solve the issue at all. This is already something we thought of, and the conclusion was that it was useless. Let's assume tomorrow we switch from 720 blocks to 360. Fantastic the nicehashers will get 'adjusted 2x faster, but so will be the adjustment on the 'downside'. So overall, this would only change the frequency of the nicehashing cycles, today with a period of ~36h tomorrow 2x less, etc.

So why did we allow Nicehash in the first place? As mentioned in the WP, this is to increase the liquidity of the hashing rate of the network. In theory, Nicehash is a brilliant invention because thanks to people arbitraging the market vs. mining price we can ramp up the network hashrate in a matter of seconds as the market price increase. Without it, it would take weeks for miners to buy and mount new rigs, or hours to find new miners in the network to plug their rigs.
The problem, now that the coin is starting to be considered as a serious player in the game, is that we are seeing more serious nicehashers coming in as well. I see 3 possibilities to

solve this issue in the midterm:
1. Asking the nicehashers to be nice and stop doing it. This can also be done by raising the threat that we will switch to a Nicehash resistant algo if they do not stop. I do not believe this solution could work.
2. We fork to a nicehash resistant algo, which could also make the network hashrate dump and generate a discrepancy between market and mining price, translating into a significant incentive for the miners to dump their proceed which would eventually lead to a decrease in the price.
3. We wait/hope to reach a network hashrate that will mitigate the impact of the nicehash pumps. My point is that today we don't witness hashrate pumps on Monero's network and the reason for that is the nicehash liquidity itself. There are more or less 50-100MH available at a decent price on Nicehash, so if tomorrow, one would try to use it to pump, the 'arbitrage' on the difficulty would only be ~20% (100/500MH). For XCASH, the potential arbitrage is as of today in the 1000% area (100/10MH). If we can get to 100MH of network HR, then the arbitrage with nicehash would become less efficient.
There is a 4th Point that I did not mention because it is more in the long term and obvious. When we switch the PoS the problem will be over so the issue we are facing right now is only a few months issue we have to deal with. I am looking for your feedback on this as whatever decision we take will be taken as a community. We have stated in the WP that if there were too many abuse with Nicehash we would make the algo incompatible with it. Thank you

Credit to Bruno Bosmans of Telegram

I sense this is of extreme importance but there are a few concepts with which I am not familiar - concepts like "nicehash pumps" - - how does that work? - and the mining arbitrage stuff. Anyone willing to explain that also in a way the man in the Street would understand?

Satosho Kakamolto

Posts

Merits