Scaling Noncustodial Mining Payouts with CTV

The discussion revolves around the complexities and challenges associated with decentralized consensus mechanisms in the context of reward distribution for mining activities. Projects like p2pool and braidpool are mentioned as examples that are attempting to navigate these challenges through various compromises. The conversation touches upon how these projects, while innovative, may not find immediate relevance or benefit from the Sv2 Mining Protocol, emphasizing the nuanced nature of integrating new protocols into existing systems.

The dialogue further explores the concept proposed by the Ocean team, which involves a method where miners would engage in spot-checking each other's work. This idea, while still under consideration for its practical implementation and scalability, represents a shift towards more decentralized approaches to validating mining efforts and distributing rewards. However, the intricacies of how such a system would operate, particularly at scale, remain a topic of ongoing analysis.

Centralization within mining pools is highlighted as a means to streamline the process of reward distribution, specifically through the dictation of the coinbase structure, whether it pertains to custodial or non-custodial payouts. The canonical Sv2 Job Distribution (JD) is presented as an effort to simplify the complexity inherent in mining protocols by proposing a single output for the template revenue, thereby allowing miners to allocate earnings as they see fit.

An extension to the protocol is suggested, aiming to enhance communication between miners and pools regarding the allocation of template revenue towards pooled mining efforts and the determination of valid non-custodial coinbase outputs. This proposal seeks to address the need for additional message exchanges, potentially complicating the established flow of communication but offering a solution to a key operational challenge.

Furthermore, the discussion acknowledges that certain aspects, such as sigops and blocksize budget considerations, could be managed more straightforwardly, possibly without the need for new messaging protocols. This acknowledgment points towards areas of potential simplification within the broader context of mining operations and protocol integration.