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How Monero’s proof of work works

blog.alcazarsec.com

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Re: How Monero’s proof of work works

#131

Post by latchkey »

dale_glass wrote: post #85
latchkey wrote: post #35

Earlier quoted context omitted.

It is subtle, but PoW mining itself doesn't generate coins. It isn't like someone is digging a hole in the ground and extracting gold. PoW miners are rewarded for correctly validating transactions, with newly minted coins. The whole proof of work thing is that you proved that you validated a transaction by expending energy, and the network pays you for that security service. Miners then need to sell those coins on th…

I believe transactions are quite optional though? A miner could choose to mine empty blocks if they truly wanted, which transactions to include if any is up to them.

Correct, one can mine empty blocks, but in practice, dumb idea. Most people mine with a pool. The pool decides what goes into a block. Even at scale. The point is that it smoothes out the reward cycle. For ETH, we mined with a pool that dual mined ETH+ZIL, which increased our overall rewards.

Re: How Monero’s proof of work works

#132

Post by jancsika »

AureliusMA wrote: post #33
dgacmu wrote: post #3

If folks are interested in the old Monero PoW function (and, uh, the reason they changed it), I wrote up a thing about it a long time ago: https://da-data.blogspot.com/2014/08/minting-money-with-mone... The history of people trying to design GPU or ASIC-resistant proof-of-work functions is long and mostly unsuccessful. I haven't looked into RandomX; it's possible they've succeeded here (or possible that with the alt-…

There was a proposal on Ethereum that didn't succeed (progpow) since they were already in the late stage of transitionning to PoS. Ethereum did quite a good job at keeping asic advantage moderate (the speedup was 100% max - not orders of magnitude). RandomX is basically progpow that succeeded. You might be interested in Chia's Proof of Space and Time... and how it collapsed!

> You might be interested in Chia's Proof of Space and Time... and how it collapsed!

Because it was written by Bram Cohen, I'd be interested in reading two or three sentences about how it collapsed.

Because it's a blockchain-based cryptocurrency, feel free to stop writing after three or four sentences.

Re: How Monero’s proof of work works

#134

Post by Eisenstein »

sowbug wrote: post #61
dgellow wrote: post #27

Earlier quoted context omitted.

It’s an interesting technical problem to solve. But after 15y still has no meaningful benefits for our societies. Other than gambling/speculation/illegal stuff. The transformative cryptocurrency shift didn’t happen

Some people think communication mechanisms shouldn't enforce policy. They don't want their phones automatically disconnecting if they talk to a friend about illegal or immoral things. They don't want their TVs shutting off if they watch stuff that's politically unacceptable. So it follows that they don't want their money throwing an exception if they try spending on an transaction too unsavory for Stripe or your bank…

Is that something we want though? Why would it be beneficial to let money be used for anything without restrictions? Society has always relied on interdependence, not complete individual freedom. You have to make the case for it.

Re: How Monero’s proof of work works

#136

Post by nerdsniper »

ProllyInfamous wrote: post #92
dgacmu wrote: post #3

If folks are interested in the old Monero PoW function (and, uh, the reason they changed it), I wrote up a thing about it a long time ago: https://da-data.blogspot.com/2014/08/minting-money-with-mone... The history of people trying to design GPU or ASIC-resistant proof-of-work functions is long and mostly unsuccessful. I haven't looked into RandomX; it's possible they've succeeded here (or possible that with the alt-…

I partially heat my home by running the default Monero client on old Xeons (heat ejects near my desktoes). As I only mine when it's cold outside (otherwise using resistive heating), there is no actual net electricity cost. IMHO it's not "worth it" for an individual to buy equipment specifically to mine crypto... but if you already have an old machine AND you heat without a heatpump, it's a free hobby/heater. ---- To…

A heat pump would arguably be more efficient for society (can provide 4x heat for 1x energy), but if you make enough money on the mined monero I guess it might be rational.

Would be curious if the marginal savings from a heat pump would allow you to buy more monero than you mine with this energy.

Re: How Monero’s proof of work works

#137

Post by ballofrubber »

tardedmeme wrote: post #129
ballofrubber1 wrote: post #107

Earlier quoted context omitted.

This still does not work. “Holding money and earning interest from holding it” is a category error. Holding Bitcoin pays zero yield. No coupon, no dividend, no debtor, no tax stream, and no mechanism by which poor people pay holders a percentage. If someone earns interest, they are not merely holding money; they are lending it, which means they are taking risk and providing capital. The “numbers on a spreadsheet” obj…

Real value deteriorates due to entropy. If I harvested some lettuce this week, in a year I don't still have lettuces - I have a pile of stinky mush. Keeping value steady requires a continual input of effort. I'd accept "leaky currency" as a substitute for inflation. The important thing about inflation is that you have to keep running just to stay in one place - not that the numbers keep going up. Stable prices are ni…

This mixes up real depreciation with monetary debasement.

Lettuce rotting is not an argument for money rotting. Perishable goods decay, machines depreciate, buildings need maintenance, and inventories have storage costs. Prices can reflect all of that. The measuring unit does not also need to decay.

Money is not supposed to preserve lettuce. It is supposed to preserve a claim on value across time. If I produce value today and save the proceeds, I should not be forced to lose purchasing power just because the unit of account was designed to leak.

Also, “forced to keep earning money” and “forced to become an investor” are not the same thing. In every system, people have to keep producing if they want to keep consuming. The difference is that under inflation, even after producing and saving, your savings are diluted unless you buy risk assets. That does not necessarily mean “generating real value.” Often it just means bidding up existing assets.

Bitcoin’s volatility is not simply “caused by deflation.” It is caused by uncertain demand, adoption cycles, liquidity, leverage, regulation, speculation, and the fact that it is still monetizing. A fixed supply makes price more sensitive to demand shocks, sure, but that is not the same as saying deflation mechanically causes volatility. Monero’s tail emission is also tiny, under 1% and declining over time, so it is hardly a normal inflationary currency.

And the Elon Musk example basically proves the opposite point. Rich people already escape inflation by holding scarce assets: land, equity, businesses, real estate. Poor people are the ones stuck holding wages and cash. A harder money system does not eliminate inequality, but it at least stops making cash itself a guaranteed melting ice cube.

Re: How Monero’s proof of work works

#138

Post by Cider9986 »

mothballed wrote: post #135
Cider9986 wrote: post #133

Earlier quoted context omitted.

I made a comment about that here ( https://news.ycombinator.com/item?id=47858801 )

[]

I'm sorry that happened—the banking system sucks. You can just buy Litecoin instead and swap.

Personally, I'm going to look into RetoSwap, but I appreciate Kraken sticking it out keeping it listed. I might not have gotten any Monero if not for Kraken.

Re: How Monero’s proof of work works

#139

Post by tromp »

hyc_symas wrote: post #122
tomjen3 wrote: post #109

Earlier quoted context omitted.

They had to design a specialized verification function, which I imagine would be the easy way to break it. The brilliant part of Bitcoin is that it uses very widely known crypto primitives - verification is the same as getting the right seed (you just happen to be told what the right seed is, rather than having to pay for it to be discovered).

You must be on drugs. There is no separate specialized verification function. It's the same algorithm for verification as for mining.

Correct; both Bitcoin and Monero use Hashcash as PoW, only differing in the choice of hash function. Verification is only different from a solution attempt in asymmetric (i.e. non-Hashcash) PoW, such as Cuckoo Cycle or (the poorly named) Equihash.

Re: How Monero’s proof of work works

#140

Post by ProllyInfamous »

nerdsniper wrote: post #136
ProllyInfamous wrote: post #92

Earlier quoted context omitted.

I partially heat my home by running the default Monero client on old Xeons (heat ejects near my desktoes). As I only mine when it's cold outside (otherwise using resistive heating), there is no actual net electricity cost. IMHO it's not "worth it" for an individual to buy equipment specifically to mine crypto... but if you already have an old machine AND you heat without a heatpump, it's a free hobby/heater. ---- To…

A heat pump would arguably be more efficient for society (can provide 4x heat for 1x energy), but if you make enough money on the mined monero I guess it might be rational. Would be curious if the marginal savings from a heat pump would allow you to buy more monero than you mine with this energy.

The only heatpumps in my house are airconditioner[†] and waterheater (mild winter climate doesn't justify replacing HVAC — but if/when it dies, I'll put in a modern minisplit) [ƒ].

[†] It's an older model, without reversing valve (circa early-2000s).

[ƒ] ...and refrigerator (thanks /u/twic)

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>if the marginal savings from a heat pump would allow you to buy more monero than you mine with this energy.

In a colder climate, DEFINITELY (to a point: see /u/nerdsniper's great point, below).

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I replaced a 300W "toe heater" with this rig; by directing heat to only wear its needed (i.e. muh'toes), I can heat the entire house less (whether resistive or heatpump).

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