Creating money out of thin ether

One more reason for formal verification, when I’m asked why should we use it and why Cardano brings with it massive transformation and consolidation:

" … mining pools which are profiting without doing any work—but this time, they’re playing by the rules. Data from crypto intelligence platform CoinFiand analytics platform Alethio suggests Ethereum has succumbed to a process called “spy mining” or “SPV mining” which was prevalent in Bitcoin from 2015-2016."


Man, you got me so bad. I was hoping to read a story about the US Federal Reserve :joy:, after reading only the headline in a forum notification message


Empty blocks are being propagated at a 15 per cent faster rate which means spy miners are rewarded with an up to 15 per cent increase in revenue. If mining pools all jump on the bandwagon, blocks picking up transactions may get fewer and far between. This means transactions would take longer and gas fees could rise. It could also drive legitimate miners to other coins, reducing the security of the network. >

Unbelievable! This is a classical example of lopsided game where the incentive scheme has not been thought through. The fact the network still functions is a miracle!

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I know right, it shows that miners do not know to exploit this or are honest, I wonder which one it is :thinking:

There is a rational explanation. I think the number of bad actors cannot exceed majority as such a case would cause the network to break down hence eliminate all future cash flows to the miners.

So in evaluating the extra 15% return the decision tree involves weighing the future benefits from continued mining against the present 15% upside. Large miners wouldn’t do that unless they can switch to another network should the shit hit the fan… fringe mining pools could get away with this, which is what happened.

I am assuming ETH mining pools have their machines optimized for ETH mining and will be handicapped by screwing this network and switching to other networks.

The whole situation actually validates the security assumption of PoS, that players invested in the system have no monetary interest in sabotaging the network. If miners at ETH can’t/won’t do it even though they have choices then it is safe to assume that no sane Cardano stakeholder would either.

The things you learn from other people’s mistakes.


Wow, crazy, I’ll let Vitalik know.

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Wow @Jotunn That’s not good news. Thanks for sharing.

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