With the advent of the Staking economy, the competition between mining pools is also accelerating. PoW mining pools such as Xinghuo mining pool have cut into Cosmos mining and sounded the first fire of war. Emerging PoS mining pools are familiar with consensus algorithms and have a community foundation. expand influence.
The origin of the mining pool is to gather the power of everyone to mine. The earliest PoW mining pool, Slush Pool, was established in Prague, Czech Republic in 2010. With the increase in computing power competition, the probability of retail investors digging a block decreases, and retail investors join the mining pool to increase Individual computing power competitiveness, more and more large mining pools (BTC.com, F2Pool, AntPool, etc.) have emerged.
The purpose of studying PoW mining pools is to get a glimpse of the future model of mining pools in the PoS era from the history of PoW. The rules of each chain in the PoS field are different. In order to increase efficiency, there are usually certain restrictions on the block generation nodes, unlike the PoW era. As long as the node is running, it can be a miner on the chain. In PoS, the requirements range from strict (more centralized) to loose (more decentralized). Examples are EOS 21 block producers, Cosmos initially 100 block producers, and Tezos currently 450 Block producing nodes (Tezos has no limit on the number of nodes, but the node threshold is 10,000 xtz), the income of these nodes is positively related to the amount of Staking they can obtain, the higher the amount of Staking, the higher the probability of digging out blocks to obtain award.
Having a threshold actually means that PoS has the gene of a mining pool. The increase in the number of staking received by nodes is actually the mining pool that is often said in PoW.
Why do nodes in any blockchain project have the shadow of centralized services
1. Generally, coin holders do not have the time, energy and expertise to run nodes, so they hand over to third-party centralized node entrustment services.
2. This is how the system is designed (for greater efficiency and stability). Even if retail investors have the ability to run nodes, if they do not have enough coins or receive enough staking, they will not be able to become profitable nodes. Even if retail investors meet the system threshold, the number of blocks produced by small nodes in a short period of time is also affected by random lucky values. It is likely that there will be no block production income for a long time. Joining node services (mine pools) is a way to obtain stable income.
The world must be divided for a long time, and the world must be united for a long time. Mining pools are an inevitable stage. Of course, some blockchain projects have already had relevant corresponding measures. We are waiting for the infrastructure to mature, and we will discuss it in the last article. In this article, we only discuss PoS The direction of nodes or PoS mining pools.
In PoW, several mainstream mining pool models have been derived due to the needs of miners
1. PPLNS mode: the full name is Pay Per Last N Shares. Each miner has its own computing power. By joining the mining pool to collect computing power, the final reward is divided according to the proportion of its own computing power in the overall. This mode has a random lucky value component , if the mining pool digs more blocks that day, the reward will be more, if there is no block, there will be no reward.
2. PPS mode: Each miner is divided into daily rewards according to the proportion of his computing power to the computing power of the entire chain, so basically the income of miners is stable, and the risk of fluctuations caused by lucky value is borne by the mining pool .
3. PPS+ mode: It is a mixture of the above two modes, mainly because some transfer fees are also given to miners.
4. Solo mode: mining by yourself.
In the above mode, the handling fee required to participate in the PPS mode is higher than that of PPLNS, because the mining pool bears higher volatility risks.
In comparison, in the PoS economy, there are not so many different models due to the randomness of mining, because the PoS blockchain produces blocks faster, and there is an upper limit for the number of nodes under the threshold. According to the current observation of Wetez , the entrusted services provided by the node have these categories
1. Guaranteed income model: When the node loses the block for any reason and loses the reward, the node still guarantees that the client has the reward of the block.
2. Enhanced version of guaranteed income model: Slash penalty rules are different for each chain. For example, the Slash penalty on Cosmos is quite severe. The system will confiscate the tokens pledged by nodes and users for staking, which may be born in the future. Guaranteed nodes launched an enhanced version of guaranteed income to attract users.
3. Timely arrival mode: In order to ensure that nodes do not do evil, each PoS consensus blockchain will have a token lock-up period. Tezos is about 15 days, Cosmos is about 30 days, and ETH is about 4 months in the future. Nodes with certain liquidity funds (such as exchanges) promise that the income will be released in a timely manner on the same day to meet the liquidity needs of users.
The next battlefield will become more and more intense. PoS nodes will expand their business horizontally with different blockchain projects, and develop a unique PoS mining pool. PoW mining pools will see the sweetness of PoS node profits, and they will also grind Huobi Mining Pool and Babbitt's Matpool have cut in, and the future will only be more intense.
So do the emerging PoS node teams have an advantage, or do the rich and powerful PoW mining pools have an advantage?
Let's compare the target users of PoS and PoW:
The target users of PoW are a group of technology-savvy people who know how to buy mining machines and how to calculate which mining pool is more beneficial to them.
The target users of PoS have been expanded, not only those who understand technology, but even novices and speculators who do not understand technology at all. As long as they hold tokens on the chain, they are potential users.
PoS is still in a chaotic era, there is no index mining pool, and there are no sufficient community tools to compare the income and proxy rules of different nodes on different chains. Except for the exchange nodes, the users of each node are scattered Yes, like isolated islands, when the handling fee is similar, users usually choose the most prestigious and trustworthy nodes in their minds. Generally speaking, the node that is closest to the user and can often tell the user the latest information and answer questions The node is the user's commissioned node.
Nodes in the PoS ecosystem have several characteristics
1. High technical ability, able to output chain-related technical articles
2. High reputation and prestige, usually early participants assisting project development
3. Provide other business services, such as wallets, browsers, community developer tools, etc.
4. Types of operating activities, holding various roadshows and writing various popular science articles
5. Geographic type, nodes of each language area
Taking a closer look at a more competitive future, when services are close to homogeneity, yields and handling fees are close to homogeneity, and information becomes more transparent, the last competitive element will be
1. Reputation and membership system: Although the entrustment service is decentralized, it is essentially a long-term requirement. If the node wants to successfully increase the stickiness of entrusted users, it must first increase the reputation of the team, and then bind entrusted users by establishing a membership system long-term relationship.
2. Issuing coins: You can see that in the PoW ecosystem, such as Viabtc, Coinprint mining pools have issued their own tokens. This token is the second reward in addition to mining income. It is usually used to deduct handling fees. Buying peripheral products and enjoying other dividends of the platform in the future, etc., but most of these are marketing methods, and the value of the currency can only be supported by real application scenarios. Similar token gameplay will definitely appear in the PoS field in the future.
3. Fee rate competition: This is the factor that most directly affects the entrusted user’s income, but it also damages the interests of nodes. The currently observed method is to promote the fee rate first and then adjust it, or adjust it in the middle of a few cycles Reduce the handling fee rate.
Wetez believes that this situation will change dynamically, but nodes that are early participants and can build reputation will have great advantages, and the operation results of nodes on one chain will become the basis for the reference of token holders on the next chain.
In the end, who will be the super-large PoS mining pool?
The most likely is the PoS mining pool backed by the exchange. According to the rule of 28, a small number of people hold most of the resources. PoS with a large amount of resources is nothing more than exchanges and Token Fund capital parties, and many capital parties have invested in exchanges. , based on strategic considerations, the capital side will hope to assist the exchange to obtain more income and traffic through entrusted business, so those who can obtain the entrusted agency service of the exchange will become a super large PoS mining pool.
Although the consensus mechanisms of PoW and PoS are very different, the motivation of capital profit and maximizing profit will make nodes and mining pool business models very similar. In the future, there will definitely be PoS nodes such as F2Pool and AntPool in the PoW era.
