PEER-TO-PEER MINING POOL (P2POOL)
Managed pools create the possibility of cheating by the pool operator, who might
direct the pool effort to double-spend transactions or invalidate blocks. Furthermore, centralized pool servers represent a single-
point-of-failure. If the pool server is down or is slowed by a denial-of-service attack,
the pool miners cannot mine. In 2011, to resolve these issues of centralization, a new
pool mining method was proposed and implemented: P2Pool, a peer-to-peer mining
pool without a central operator.
P2Pool works by decentralizing the functions of the pool server, implementing a par‐
allel blockchain-like system called a share chain. A share chain is a blockchain run‐
ning at a lower difficulty than the bitcoin blockchain. The share chain allows pool
miners to collaborate in a decentralized pool by mining shares on the share chain at a
rate of one share block every 30 seconds. Each of the blocks on the share chain
records a proportionate share reward for the pool miners who contribute work, car‐
rying the shares forward from the previous share block. When one of the share
blocks also achieves the bitcoin network target, it is propagated and included on the
bitcoin blockchain, rewarding all the pool miners who contributed to all the shares
that preceded the winning share block. Essentially, instead of a pool server keeping
track of pool miner shares and rewards, the share chain allows all pool miners to keep
track of all shares using a decentralized consensus mechanism like bitcoin’s block‐
chain consensus mechanism.
more robust overall, as part of a diversified mining eco‐
system.
