As I pointed out in a previous Medium article, WebDollar aims to rethink mining, perhaps taking it back to its roots as a social deed — creating consensus on a trustless network.
Our vision of ‘social mining’ tackles the same challenge — verifying transactions — but with a twist.
When things get difficult, don’t get better hardware… just ask a friend for help.
An old African proverb says: “If you want to go fast, go alone. If you want to go far, go together”. And we, at WebDollar, we want to go far. Further into the mainstream than anyone has gone before.
And this is the very reason why, in our view, pools will be vital to creating a mainstream, fully-functioning cryptocurrency.
But first, lets take a step back.
What are pools?
The concept of pools started (much like anything else in the crypto world) with Bitcoin. As the network expanded and the difficulty of finding a block increased, no single miner was able to cash in a reward in a decent amount of time.So some miners decided to join hands (and processing power) and pool their resources together for the good of all. The rewards generated by these pools were then distributed back to the pool members as shares, according to the amount of work they contributed to finding a block.
Why do we need pools?
When any network scales (especially one that aims at mainstream adoption), the computing power of the individual miner becomes a speck of dust in a sandstorm. In some cases, it would take years for the average miner to find a block on the busiest networks. And even then, it would just be a probability to do so. The only option then, is to team up, pool your resources with your peers, and share the profits.
Of course, there are both pros and cons to joining a pool.
- Constant and secure stream of revenue vs. erratic and unpredictible income for solo mining.
- Simplicity — Most of the complex functionalities can be left to the pool admin.
- Extra features and info — A smart pool owner doesn’t just offer a pool of hashing power for you to join. They can offer a community, additional info and extra features, that would be difficult to access on your own.
- Trust issues. You need to trust that the pool admin is not doing something behind your back and siphoning your processing power. This fear doesn’t make much sense now, with the transparency given by the public code repositories (you can check anytime to see whether the code is clean or they are hiding anything).
For all the above reasons and even more, most (if not all) cryptocurrencies are slowly transitioning from solo mining to pool mining as the main type of mining. The pools are a mature, well developed concept, which has brought a lot of value to the crypto world.
Yet, there is something dark about the current model of pools.
Here is perhaps a good time for another story. Back in early 2014, the still young crypto world was in an uproar. GHash.io, the biggest Bitcoin mining pool at that time, was approaching the dreaded 50% line.
Dreaded because, in theory, any pool with more than 50%+1 of the network hashing power could unleash the fires of hell for that cryptocurrency.
To begin with, this demon pool could go for massive-scale double spending or prevent transaction confirmations, leaving the cryptocurrency defenseless. And this is not mere theory. A variation called The Finney attack was actually used by GHash.io in November 2013 to commit repeated payment fraud against BetCoin Dice, a gambling site.
The power of such attacks is humbling. Someone owning more than half the mining power could rewrite the history of the blockchain and manipulate its content as per their own malicious intent. Some say that doing so would go far beyond just theft. It would probably create a general sentiment that the blockchain technology had failed us and might spell the end for cryptocurrency, or at the very least, cause a devastating crash.
You would say that the specter of such a danger would have taught people to keep a balance between pools. Alas, humans are slow learners.
The first 4 Bitcoin Mining pools in the world control more than 60% of the mining power. 80% of the Mining pools are located in China.
Bitcoin is literally one cartel deal (or Chinese Government takeover) away from a disaster, a disaster that would undoubtedly drag down the entire crypto world. And given the recent developments in China, I do not feel very safe with the current state of things.
And you might think that only Bitcoin has these potential problems, because it has been the pioneer. Surely they ought to be solved by the new breed of cryptocurrencies, right? Not really. In the ZCash network, for example,just one single pool, Flypool, has more than 50% of the network hashrate.
It is somewhat sad and ironic that something that started as a symbol for decentralized, distributed, public and safe, is now mostly centralized, localized (in China), and not very safe.
At WebDollar, we think that only by eliminating such threats, can we reach the stability needed to create a truly functional digital currency.
As part of WebDollar’s ‘social mining’ concept, creating and managing a pool becomes, in itself, a specialized type of revenue. An activity that gets rewarded, as it provides a second layer of security and stability for the entire network.
Thus is born the Pool Leader, a special class of user — one that demonstrates extra commitment to the network by maintaining s a server, 24/7, populating it, and spreading the word about WebDollar.
Obviously, such effort does not go unrewarded — as a pool owner, you will be able to dynamically set a small percentage of the total mining reward to be reserved for you. And, instead of investing in hardware, you invite people into your pool as miners — the more miners in your pool, the higher your reward.
In some ways, this activity will be better suited for those with an entrepreneurial calling, as it is less passive than traditional centralized mining. And because we know that, we aim to empower and encourage pool leaders with the help of three core values:
Technological advancement and innovation has always been at the core of mankind’s progress. In WebDollar’s case, this allows pool leaders to create and use all the functionality of the pool, and offers miners the possibility to reap rewards from their contribution to the pool,via the Pay per last N shares model.
As a new WebDollar miner, you will at first be allocated by the system to an aleatory pool. Then you can decide upon your pool of choice, which will be all listed and sortable by Name, total average hash power, number of users and the fee percentage.
Some features are innovative; others are well-seasoned. But in the end, it is not technology that changes our lives, but the way we use it. And how many of us use it. Here is where the next pillar comes into play…
Being one of WebDollar’s core values, simplicity just couldn’t be left out, for that is our approach to pool creation.. No longer will creating and managing a pool only be an activity for the tech savvy.
You will be able to create your pool, invite people and manage it, with just a few clicks and little to no knowledge required about how the pool actually works.
To stimulate driving forward the technological progress by the community (and to ensure that competition between pools will not be only centered around fee percentages), we will allow for heavy particularization of the pools.
You will be able to add your own features and UI, offer bounties to developers, involve pool users in decisions, and much more.
In many ways, one might argue that our social mining concept and the pool structure are our built-in virality system. We offer people a strong incentive to look after the security of the network and make sure that competition keeps the network decentralized. However, this is not the entire picture. The simplicity of WebDollar’s model makes it very easy for a pool owner to invite in the system people that have never used crypto before, because it used to be very complicated.
Just copy the link of your pool, post it on your Facebook (or send it as a private message) and when people will click on it, they will start mining. Both for themselves and to you. At the beginning, for them it might look like just another browser tab, that you asked them to open. After a while, when they will notice that they have some numbers in their wallet, they will learn the fact that they have just created their own digital money. And they will want to spend it on goods and services, hoard it, or transfer it to someone dear. The network will grow and WebDollar’s mission for cryptocurrency mass adoption will draw closer to its fulfillment.
“What’s in it for me?” — You might ask yourself right now.
Well, that depends on how you want to get involved.
Do you want to just invest in some mining gear, keep it running, and cash in? Stay a pool user or even mine solo.
Pros — passive(-er) income
Cons — high investment cost (if you want high end mining gear of quantity over quality)
Do you want to get involved more? Are you a social and persuasive guy? Then become a pool admin.
- High income when scaled up (for example, 1% fee from 1000 users means ten times the average income of a simple user)
- No need for high investment costs in hardware. A decent server/desktop with a good internet connection will do.
- You have to keep a server/PC up 24/7 (well, but so does any miner)
- You have to expand your pool base and keep it up in face of the competition.
Regardless of your choice, here is how you should prepare for the pool system:
- If you want to be a pool admin, start talking with your friends (both from the crypto world or not) about WebDollar and how you could both win if they join your pool.
- If you want to be a pool member, start asking around for people that intend to set up a pool.
We already have a Telegram chat for this topic, here: https://t.me/webdollarpoolchat
Looking forward to your feedback!
Post-scriptum and disclaimer: I personally intend to set up a pool. For anyone interested to join my pool, please file in this survey: https://goo.gl/forms/1SzVi6OTpR57hgYe2