delvingbitcoin
Ecash TIDES using Cashu and Stratum v2
Posted on: January 8, 2025 14:42 UTC
In the realm of decentralized mining pools for Bitcoin, the concept of "shares" plays a pivotal role, representing full bitcoin blocks that adhere to a lesser proof-of-work (PoW) difficulty than the main Bitcoin network.
These shares, potentially encompassing up to 4MB of transaction data, pose significant challenges in terms of validation, particularly when the transactions contained within a share are not present in the validator's mempool. This situation necessitates either the storage and download of transaction ID lists for every share or, in more extreme cases, the entire 4MB block. To address these concerns, the introduction of Braidpool, a public blockchain designed as a Directed Acyclic Graph (DAG) where each DAG entry represents a share, has been proposed. By employing Deterministic Block Templates, Braidpool aims to streamline the validation process by ensuring that shares implicitly commit to a set of transactions within a predefined mempool, thereby eliminating the need for separate storage or transmission of transaction data for validation purposes.
However, the implementation of such a system is contingent upon the establishment of a consensus algorithm for the mempool, a feature currently absent in analogous systems like TIDES and Cashu, which complicates the transportation and storage of data due to the absence of a publicly known transaction list. The design of Braidpool inherently limits the size and frequency of shares it can support, dictated by the latency involved in transmitting these shares and the time required to reach consensus on them. With an estimated bead time ranging from 250ms to 1000ms, a miner with 0.1% of the Bitcoin hashrate could expect a monthly revenue variance of approximately 1.5%, highlighting the necessity of variance reduction strategies inherent to mining pools.
To accommodate smaller miners, the concept of Braidpool sub-pools has been introduced, offering an alternative payout mechanism through eCash tokens derived from shares in the parent pool, rather than direct Bitcoin payments. This model significantly reduces the monthly revenue variance for miners operating as few as four S21-class devices, thus providing a viable solution for small-scale operations. However, for the smallest class of miners, such as those using BitAxe, the feasibility of achieving steady income becomes questionable due to the limitations imposed by transaction dust limits, making solutions like Lightning or eCash tokens more suitable for handling small denominations. Despite these challenges, participation in a Braidpool sub-pool still presents a lucrative opportunity for these small-scale miners, akin to entering a lottery with potentially rewarding outcomes.