Proposal: Verified mining

[Steve Sokolowski]

I wanted to put out a proposal called "verified mining," which I also put out to a vote in a poll to see how many customers would be interested.

In "verified mining," customers who participate in the program would earn more than the standard amount paid to unverified miners. If the program were to be adopted, it would be optional, and customers would still be able to continue mining with no penalty if they chose not to participate.

To become verified, customers would be expected to do the following:

• Earn more than a minimal amount to be eligible, probably something like $10/month.
• Participate in a basic identify verification process, which would take about 60 seconds and require a driver's license or passport. The information would be stored offline so that it is protected from hackers. To succeed with the verification, customers would have to prove their identities and not have criminal records.
• Agree to either not use cloud mining services, or to accept liability if you end up renting low luck miners from cloud mining services.
• Agree to not download firmware from untrusted forums and links on the Internet. The manufacturer default firmware and whitelisted firmware, and overclocking and underclocking would all be allowed.

This "verified mining" program would not be a "know your customer" program like exchanges follow. Since the law doesn't require us to collect identity data to track payouts and submit government forms, we wouldn't do that.

Instead, verified mining would be fully independent of whatever tax or other regulations we need to adhere to. None of the verification data would be shared with any governments or other companies under any circumstances. Verification data would not be cross-referenced with data from other sources. Verified customers would still be subject to, or not be subject to, the same IRS paperwork requirements as exist currently, and customers could be verified miners without passing the $600 threshold, or they could remain unverified after passing the $600 threshold.

In exchange for becoming verified, verified customers would receive a 6-10% earnings bonus. The exceptions are that solo mining would be excluded from the earnings bonus, and the bonus would not apply to referral revenue. We'll calculate the exact bonus if the program receives positive feedback.

Please offer your thoughts on the proposal here, and be sure to vote in the poll to state whether you would participate or not if we decided to move forward!

[ryguy]

I suppose I am unclear what your third criteria is proposing in terms of accepting liability for any low luck miners that may be rented. In your documentation you already enforce balance forfeiture and other criteria that can be applied to detected low luck miners. What additional "liability" are you proposing here?

I see no real issue with the other criteria and would likely participate, but I need more information before I can be sure.

Also would this increase in earnings be reflected in the profitability data provided by the WAMP API or would it only be reflected in individual user accounts?

[RCMco]

Hello Steve,

What is the purpose of such a program and what is the benefit to Prohashing.com ?

Michael

[Steve Sokolowski]

I suppose I am unclear what your third criteria is proposing in terms of accepting liability for any low luck miners that may be rented. In your documentation you already enforce balance forfeiture and other criteria that can be applied to detected low luck miners. What additional "liability" are you proposing here?

I see no real issue with the other criteria and would likely participate, but I need more information before I can be sure.

Also would this increase in earnings be reflected in the profitability data provided by the WAMP API or would it only be reflected in individual user accounts?

We would have to be more clear about that in the terms - this is just a rough proposal and it hasn't been decided yet. The case we need to address is one where a miner rents a huge amount of hashrate, like $10,000 in a day, and it finds no blocks, like has happened before with ETH. The low-luck miners query only penalizes customers for future earnings, not past earnings. Here, we would expect the miner to pay the $10,000 back.

But because this happened a few times and it would be bad if we had to go after customers for things they can't control, it may be better to just state in the verification agreement that verified mining does not allow cloud rentals. Do you think that's better?

With the API, I think that we would continue to display the statistics we do now, because if people show up thinking they can just register an account and get the verified mining rate by doing nothing more, they will get mad. Most likely we would provide a new endpoint for the bonus amount, and then people who want to write software can multiply by 1.07 or whatever it is.

[Steve Sokolowski]

Hello Steve,

What is the purpose of such a program and what is the benefit to Prohashing.com ?

Michael

From what I can tell across forums, and from what we gathered in queries, pools generally only earn about 90% of what they are supposed to earn because some software does not submit blocks at the expected rate. This issue is not specific to Prohashing.

Because we comply with the law, we can make use of criminal background checks to ensure that we have honest people in the verified mining program. Other pools that are anonymous can't work with above-ground verification companies, so they offer workarounds like "party mining," where you have to find your own "party" that you trust. Most miners don't know other miners who are trustworthy, the parties aren't large enough to have regular blocks, and it takes a lot of time and effort.

The theory is that there will be a significant difference in profitability by creating what essentially is a separate pool of trusted miners. Nobody has ever tried it before, so we don't know what the bonus will be, although we expect it to be substantial. If it turns out that trust is not the issue and there is actually some sort of hardware problem inherent in all miners, then we're not going to charge anything for verification, and we'll just delete the verification data and discontinue the program.

[ryguy]

I suppose I am unclear what your third criteria is proposing in terms of accepting liability for any low luck miners that may be rented. In your documentation you already enforce balance forfeiture and other criteria that can be applied to detected low luck miners. What additional "liability" are you proposing here?

I see no real issue with the other criteria and would likely participate, but I need more information before I can be sure.

Also would this increase in earnings be reflected in the profitability data provided by the WAMP API or would it only be reflected in individual user accounts?

We would have to be more clear about that in the terms - this is just a rough proposal and it hasn't been decided yet. The case we need to address is one where a miner rents a huge amount of hashrate, like $10,000 in a day, and it finds no blocks, like has happened before with ETH. The low-luck miners query only penalizes customers for future earnings, not past earnings. Here, we would expect the miner to pay the $10,000 back.

But because this happened a few times and it would be bad if we had to go after customers for things they can't control, it may be better to just state in the verification agreement that verified mining does not allow cloud rentals. Do you think that's better?

With the API, I think that we would continue to display the statistics we do now, because if people show up thinking they can just register an account and get the verified mining rate by doing nothing more, they will get mad. Most likely we would provide a new endpoint for the bonus amount, and then people who want to write software can multiply by 1.07 or whatever it is.

Thanks Steve. I figured it was in order to recoup financial losses, but I wanted to be more clear about the proposal to ensure I understood what you meant. Obviously the terms will be more specified, but I appreciate the general idea.

If you are going to ban any cloud mining from being verified then I would not be able to participate in that program. Obviously I'm not going to think that's better from my end since it causes me to lose out on extra earnings merely due to how I choose to obtain hashrate and not because of my actions with the pool. Whether there is a way to include cloud mining users for this program will depend on its aims and information to which I likely don't have access, but I would appreciate it if you would try to include those of us that are not acting maliciously no matter the source of our computing power.

The API question was related to software as I wanted to see whether I would need to produce any updates to what I already have.


Thanks for the quick response

[Steve Sokolowski]

I suppose I am unclear what your third criteria is proposing in terms of accepting liability for any low luck miners that may be rented. In your documentation you already enforce balance forfeiture and other criteria that can be applied to detected low luck miners. What additional "liability" are you proposing here?

I see no real issue with the other criteria and would likely participate, but I need more information before I can be sure.

Also would this increase in earnings be reflected in the profitability data provided by the WAMP API or would it only be reflected in individual user accounts?

We would have to be more clear about that in the terms - this is just a rough proposal and it hasn't been decided yet. The case we need to address is one where a miner rents a huge amount of hashrate, like $10,000 in a day, and it finds no blocks, like has happened before with ETH. The low-luck miners query only penalizes customers for future earnings, not past earnings. Here, we would expect the miner to pay the $10,000 back.

But because this happened a few times and it would be bad if we had to go after customers for things they can't control, it may be better to just state in the verification agreement that verified mining does not allow cloud rentals. Do you think that's better?

With the API, I think that we would continue to display the statistics we do now, because if people show up thinking they can just register an account and get the verified mining rate by doing nothing more, they will get mad. Most likely we would provide a new endpoint for the bonus amount, and then people who want to write software can multiply by 1.07 or whatever it is.

Thanks Steve. I figured it was in order to recoup financial losses, but I wanted to be more clear about the proposal to ensure I understood what you meant. Obviously the terms will be more specified, but I appreciate the general idea.

If you are going to ban any cloud mining from being verified then I would not be able to participate in that program. Obviously I'm not going to think that's better from my end since it causes me to lose out on extra earnings merely due to how I choose to obtain hashrate and not because of my actions with the pool. Whether there is a way to include cloud mining users for this program will depend on its aims and information to which I likely don't have access, but I would appreciate it if you would try to include those of us that are not acting maliciously no matter the source of our computing power.

The API question was related to software as I wanted to see whether I would need to produce any updates to what I already have.


Thanks for the quick response

Are you taking your own miners and using a service like Mining Rig Rentals as a proxy, as their administrators stated happens sometimes? I didn't know this, but unlike at Nicehash, at Mining Rig Rentals you can select a default pool for when nobody is willing to pay more for your miners. Or, are you renting other people's miners?

These two situations are vastly different. There would be absolutely no problem whatsoever if you're just running rigs through Mining Rig Rentals when nobody wants to rent them.

[RCMco]

Thanks Steve, your explanation to my question as well as your answers to other posted questions has given me a better understanding of what it is you are proposing.

[ryguy]

We would have to be more clear about that in the terms - this is just a rough proposal and it hasn't been decided yet. The case we need to address is one where a miner rents a huge amount of hashrate, like $10,000 in a day, and it finds no blocks, like has happened before with ETH. The low-luck miners query only penalizes customers for future earnings, not past earnings. Here, we would expect the miner to pay the $10,000 back.

But because this happened a few times and it would be bad if we had to go after customers for things they can't control, it may be better to just state in the verification agreement that verified mining does not allow cloud rentals. Do you think that's better?

With the API, I think that we would continue to display the statistics we do now, because if people show up thinking they can just register an account and get the verified mining rate by doing nothing more, they will get mad. Most likely we would provide a new endpoint for the bonus amount, and then people who want to write software can multiply by 1.07 or whatever it is.

Thanks Steve. I figured it was in order to recoup financial losses, but I wanted to be more clear about the proposal to ensure I understood what you meant. Obviously the terms will be more specified, but I appreciate the general idea.

If you are going to ban any cloud mining from being verified then I would not be able to participate in that program. Obviously I'm not going to think that's better from my end since it causes me to lose out on extra earnings merely due to how I choose to obtain hashrate and not because of my actions with the pool. Whether there is a way to include cloud mining users for this program will depend on its aims and information to which I likely don't have access, but I would appreciate it if you would try to include those of us that are not acting maliciously no matter the source of our computing power.

The API question was related to software as I wanted to see whether I would need to produce any updates to what I already have.


Thanks for the quick response

Are you taking your own miners and using a service like Mining Rig Rentals as a proxy, as their administrators stated happens sometimes? I didn't know this, but unlike at Nicehash, at Mining Rig Rentals you can select a default pool for when nobody is willing to pay more for your miners. Or, are you renting other people's miners?

These two situations are vastly different. There would be absolutely no problem whatsoever if you're just running rigs through Mining Rig Rentals when nobody wants to rent them.

I am renting others' rigs. That's why I wanted to confirm what you meant on the third criteria as it would potentially apply to my renting of rigs.

[PolakCrypto]

What is this like a "rewards card" for stores to track everything you buy but for mining? I think the idea of mining people like is to be pseudo-anonymous.

I'm not giving my drivers license to be stored for potential identity fraud down line somewhere when a database gets hacked or leaked or compromised.