BMAX: pricing “sats now vs sats later” via a mining sharechain (no L1 changes, no custodians, no oracles)

The correspondence raises critical concerns and suggestions regarding the proposed changes to a cryptocurrency mining pool, particularly focusing on the mechanics of token issuance and share management. The primary point of contention lies in the proposal's shift towards basing token issuance on the sharechain difficulty rather than the Bitcoin (BTC) difficulty. This alteration could lead to discrepancies in the energy cost associated with tokens mined at different times, undermining the fairness and consistency of the mining process. The critique suggests that aligning token issuance with BTC difficulty would ensure that all tokens have equivalent energy costs, thereby maintaining a level playing field for miners.

Another significant issue highlighted is the proposal's approach to handling shares within the system. The current methodology does not involve burning shares, which, according to the critic, could lead to inflationary pressures and an unwieldy increase in data volume. They argue that implementing a share burning mechanism would not only help control inflation but also stimulate demand for shares by making them more scarce. Additionally, it could prevent the unbounded growth of the utxoset, thus addressing potential scalability challenges.

The critique further disapproves of the proposal's resemblance to solo mining rather than pool mining, given its lack of a FIFO (First In, First Out) queue or any analogous system to manage how miners are rewarded. Suggesting improvements, the commentator proposes reintroducing a FIFO queue or a similar structure to enhance the appeal of the mining pool to prospective miners. This could be achieved by either burning shares selected through this queue or adopting a hybrid model that combines random payouts with the FIFO system. Such modifications are believed to incentivize both participation and competition within the mining pool.

Moreover, the concept of rewarding the top ten shareholders as a means to encourage share accumulation among them, while simultaneously motivating others to sell, is presented as an alternative to address the distribution and incentive issues within the mining ecosystem. However, the complexity inherent in creating transferable shares is acknowledged, alongside the risk it poses in encouraging the consolidation of shares under minimal addresses/utxos to maximize chances of receiving payment.

In summary, the feedback emphasizes the need for adjustments to the proposed changes, advocating for mechanisms that promote fairness, scalability, and active participation within the mining community. By revisiting the basis for token issuance and refining the share management strategy, the proposal could potentially reconcile the benefits of solo and pool mining, thereby attracting a broader base of miners.