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Mining pools were formed quite early in Bitcoin's history. Since then, they have not been considered ideal because of more and more centralization creeping in. But it seemed the community has learned to accept and live with this necessary evil.

So in this context, has it ever been discussed to build mining reward pooling into the actual Bitcoin protocol, making centrally administrated mining pools obsolete?

A technical implementation could look like this:

A miner that finds a hash with difficulty n still solves a block around every 10 minutes, but also miners who find a hash with difficulty n-1, n-2, or even n-3 can submit their solution[1], however without triggering a solution for the current block.

The mining reward could then be distributed in one transaction proportionally to all miners who have found hashes.

Are there any altcoins that implement this or a similar concept already?

I'm aware there's P2Pool, but it uses a separate blockchain, which causes latency issues that make it unable to compete with centralized mining pools.


[1] Submit their solution how and to where? This would be a technical detail to discuss later. They could be opening a transaction channel or the like.

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    Are you familiar with the "Uncle Blocks" of Ethereum? – Murch Jun 16 '16 at 12:44
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I believe this would be very difficult to implement in Bitcoin. Not only because of technical feasibility, but also because gaining concensus would be difficult.

The mining reward could then be distributed in one transaction proportionally to all miners who have found hashes.

This appears to be making modifications to the coinbase transaction, which would almost certainly require a hard fork. Also, what is preventing the miner who created the block at full difficulty from simply cutting out all the miners who submitted blocks at n-1, n-2, etc...? How would other network participants know that other miners have been cut out, so know they should reject the block? That trust model would have to be solved.

If a hard fork is necessary, you would need concensus from the mining pools...which are the entities your are attempting to disrupt. Even though their hashing power comes from individual participants in the pools, it would be hard to push something through that isn't necessarily in their best interest.

Finally, what would prevent individual miners from banding together to "game" the new protocol, thus re-creating mining pools on top of this mining pool protocol? Building pools into the protocol won't stop people from pooling together...it will just give them different goals for them to pool resources for.

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One simple reason why this is not feasible: you would need to store in the next block the block+hash of all the miners claiming to have resolved some difficulty level in order to reward them. Simply not possible.

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