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

A sharechain has the capability to reject a miner’s submitted share if the coinbase transaction is invalid. However, it lacks the authority to enforce payout redirection on the actual Bitcoin mainchain. This limitation means that even if the sharechain establishes rules around payouts, a miner who successfully mines a valid block on the mainchain retains the technical ability to redirect the block reward to their own address and broadcast the block regardless of the sharechain’s expectations.

Since the sharechain operates off-chain, its only recourse against such behavior is to impose penalties outside of the mainchain protocol. These off-chain penalties could include exclusion from future participation or other community-imposed sanctions, but they do not directly prevent miners from acting in self-interest when they control block production.

The core incentive issue arises from this disconnect: there is no mechanism within the Bitcoin protocol itself that obligates miners to honor off-chain agreements about reward distribution. As a result, miners are incentivized to bypass the sharechain's intended recipient whenever possible, especially if they themselves are not slated to receive the reward. This creates a significant challenge for designing trustless pooling schemes that rely on voluntary compliance rather than enforceable protocol rules.