P2share: how to turn any network (or testnet!) into a bitcoin miner

In the quest to optimize a cryptocurrency system that involves sharecoin and its integration with Bitcoin, several critical challenges have been identified. The primary concern revolves around the management of shares awarded to miners, specifically addressing the issue of how much of the winner's share should be burnt. The dilemma lies in finding a balance that prevents winners from accumulating an excessive number of shares indefinitely, which may discourage continuous mining due to diminishing returns from Bitcoin block revenue. A proposed solution suggests the possibility for miners to sell their shares, maintaining a sustainable position without halting their mining activities altogether.

Another significant aspect to consider is the issuance rate and difficulty level of sharecoin blocks. The goal is to ensure fairness for small miners by adjusting the frequency of block issuance and the complexity of mining tasks. If the difficulty is set too high, it risks alienating smaller participants due to an unfair distribution of rewards relative to the energy expended. Conversely, overly frequent block issuance could lead to network congestion and propagation issues, detracting from the system's overall appeal and efficiency. This delicate balance must be carefully managed to maintain network health and participation incentives.

The capacity of sharecoin blocks, in terms of the number of transactions they can hold and the complexity of the scripts they support, is also under scrutiny. To mitigate synchronization and storage challenges, an innovative approach suggests leveraging the Bitcoin mainchain's proof of work as a trust mechanism for sharecoin's state. By committing to the actual state in newly found blocks, the system could enable new miners to sync only to the last checkpoint, significantly reducing the historical data burden. This strategy would allow for more rapid growth of the sharecoin chain while enabling periodic pruning of outdated information based on miner activity and share distribution.

Finally, the conversation touches on the strategic positioning of sharecoin pools and their accessibility to various miner demographics. The overarching goal is to attract substantial participation from both large and small miners. By offering different pools tailored to specific miner sizes, each with customized difficulty levels, the system aims to strike a balance between fostering decentralization and enticing larger miners, who play a crucial role in challenging centralization tendencies. This nuanced approach underscores the importance of inclusivity and flexibility in the pursuit of a more decentralized and efficient mining ecosystem.