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Mining as lottery process

Mining should be considered lottery process, but not professional for-profit process.

The former are hobbyists who mine using their home machines in their spare time with their spare resources. The later are professionals who explicitly buy hardware just for mining and mine as mining farms.This is a philosophical stub regarding a certain aspect of Kulupu. It does not necessarily reflect the majority thinking of the community or even the reality.

The problem with mining as for-profit process is that it is too expensive. So it discourages others from joining. Lottery process, on the other hand, assumes that participants do this as an activity in one’s spare time. It expects close-to-zero cost of joining, a really small percentage of expected profit, and in the mean time, large rewards if the lottery is won. Those who join as professional for-profit process won’t be able to compete with those who join as lottery process, because the later can afford a much lower expected reward.

To make mining as lottery process a reality, there are three necessary pre-conditions:

  • The mining process can only mine to a user’s own wallet, but not any third party one.

  • The mining algorithm must run most efficiently on commodity hardware. It must be ASIC-resistance.

  • The user experience must be easy. A miner should be easy to run. It should take advantage of the spare CPU resources but should not affect normal usage.

Mining as lottery process can also be encouraged by long-term commitment rather than short-term profits.

A successful deployment of mining as lottery process will have everyone who is interested in a blockchain mining the blockchain using their own computers of the spare resources. The network hash-power, as considered in today’s term, will be over-populated, leaving only a small margin of expected profits. Professional miners will find the profit not attractive, and thus hesitant to join, because dedicated mining rigs will require dedicated maintenance costs and power consumption. Each of the hobbyist miner’s hash power may be small, but collectively, those spare resource mining power should be larger than any of the professional mining farms.