Hey Stackers! I love this community and want to pitch in to help on what I see as the number one priority right now.
The current game theory of how Stacks mining is designed is leading to a low # of miners and low mining throughput. Below I will explain how to increase the number of miners and the total mining throughput.
Let me first explain the problem as I see it.
The fixed cost of bidding for a block drives a stable equilibrium of a small # of miners. There’s no shortage of those who want to mine. They just drop out because it’s only profitable to be the largest.
I have first hand experience of this. I was a miner for a bit and then drove up my % of the pie until I was #1 for an extended time. At that point I was unprofitable & forced everyone else into unprofitability. Then it became a game of chicken. I blinked as I didn’t want to keep losing $. This is something every miner experiences.
The key to solving this imbalance is that miners should only send bitcoin transactions once it is clear that they have won the round. This minimizes the # of tx’s per round (only the winner sends), and it ensures the fixed cost of the bitcoin tx fee doesn’t favor larger miners.
How do you accomplish that? You have “bid to mine” transactions occur on the Stacks chain with $STX posted as collateral. The miner that wins the round then posts the transaction, & thus isn’t wasting tx fees on blocks not won.
This solution can be applied to the current situation, where fixed cost tx fees drive smaller miners into unprofitability. See my post explaining it: Stacking: a New Consensus Algorithm for Blockchains - #60 by shea256
This problem needs more prioritization than it currently is getting and I’m happy to contribute because I want to see Stacks grow during this bear market and beyond. Scaling chains for Stacks is awesome, but first we need to focus on the big issues with the main chain.
I’m happy to draft a SIP and join any working group who wants to take this forward.
Lastly, thank you to the entire Stacks community. We have one of the best communities in crypto and that’s no accident. Let’s keep making strides forward to improve what we’ve built on!