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

In a recent discussion, the concept of using a sharechain for bitcoin mining was explored, delving into its potential technical challenges and implications for decentralization. A key point raised was the possibility of the same share on the sharechain winning multiple bitcoin block rewards over time. This scenario raises questions about market dynamics and the valuation of shares within this innovative mining framework.

The debate further extends into the mechanics of share distribution and account management within the sharechain model. It introduces the idea of burning shares from an account as a strategy to prevent centralization among large miners, who could otherwise dominate the reward system due to their significant shareholdings. The argument posits that by mandating the burning of shares for winners, it could theoretically allow smaller miners to accumulate shares over time, eventually becoming valid candidates for selection and thus maintaining a level of fairness and decentralization.

Another concern addressed is the inflation and devaluation of sharecoins, particularly affecting small miners whose contributions might become negligible over time. Suggestions were made to mitigate these issues, including the proposal that accounts should only become eligible for selection after reaching a certain threshold, encouraging the consolidation of shares among smaller miners to become viable contenders. Moreover, the notion of modifying the probability of selection based on share size was discussed, proposing an exponential growth in selection probability with increased share size to discourage the fragmentation of shares by large miners.

The conversation also touched upon implementing mechanisms to facilitate on-chain transactions through coordinated efforts without the need for a centralized coordinator. This would leverage the sidechain's capabilities for faster transaction processing and ephemeral state management, suggesting the use of expiring signature commitments for efficient coordination among multiple parties.

Overall, the dialogue encapsulates a comprehensive examination of the sharechain concept for bitcoin mining, highlighting both its potential benefits and challenges. It emphasizes the necessity of carefully designed rules and mechanisms to ensure the system promotes fairness, decentralization, and efficiency in the evolving landscape of cryptocurrency mining.