ergo chainlinkProof-of-Work and DeFi Ergo Summit - Mining & Minting

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foreign Summit and my talk will be about proof of work and defy so uh how can we use proof of work in a context of smart contacts run on the Ergo blockchain so lets start with uh basics of proof of work so proof of work is a very simple cryptographic primitive uh which uh basically works as follows so we have some meaningful message m uh then uh we had some uh usually a mean less and random uh string commands then uh we are getting a hash from message with nouns been added and if hash is uh less than some Target value uh then uh yeah our work is passing validation uh so uh depending on the target uh value uh we can do uh more work or less work we can also uh change t with time uh which is called difficulty Readjustment uh in the context of blockchain and the proof of work was initially proposed back in 90s around mid 90s initially uh mostly uh to combat email spam but there are the other proposals for example minimint from rivistan Shamir the greatest Minds in cryptography by the way and they proposed to use uh profile work to Mint uh well uh currency of Internet to be used in micro payments then Bitcoin appeared around 2009 so in Bitcoin proof of work is used to generate blocks so to commit transactions uh uh in an entity uh called the block and we are doing proof of work our block by iterating our uh the nuns field of it and uh yeah as I said before we are changing difficulty uh to uh have a block every 10 minutes and since 2009 uh well uh we are starting proof of work as a consensus mechanism and now its uh known pretty well and uh there are many advantages of Pro 4 because the consensus mechanism so it is simple It is Well started uh well uh its a problems are known well there are many proposals how to improve different aspects of proof of work as a consensus mechanism uh and uh well it seems uh well proof of work is a solid foundation uh to produce uh scarce uh money so digital gold uh like uh Bitcoin and uh Ergo and also uh provoke can be uh seen as fair and uh uh well more or less Anonymous distribution mechanism all right and uh uh well uh for about 10 years I also have a profile work as an industry uh with uh mining pools uh Asic manufacturers uh mining software producers uh profit calculators some big companies in the space some of them made IPOs so there are different uh media covering mining space specifically and so on so on and well what is the current state of proof of work industry so as we know since uh ethereum merge GPU Mike is a state of crisis so well most of GPU cryptocurrencies will are not profitable to mine after the match and I think this is still the case if you do not have a free or almost free electricity at least uh well uh Bitcoin mining is not in a good shape as well uh well uh because of uh some events in China as well as other countries uh so yeah in currently also uh Bitcoin uh prices uh not so good for the development of the proof of work industry so in case of Bitcoin this is about classics all right so producing Asics and yeah put them around places with cheap electricity and so on so there were a lot of uh uh dramatic events around uh Bitcoin mining I since 2019 even but yeah its uh uh somehow demonstrating her progress still but uh yeah with a lot of other dramatic events um all right uh then the question is uh What uh can we do uh two uh maybe uh use profile work on a smart contracts uh layer so [Applause] uh to well bring additional uh stream of uh Revenue a lot of streams of Revenue to GPU miners as well as other miners uh so uh there are many well attractive properties of proof of work and uh well if you are talking about uh D5 so uh Fair distribution is definitely one of them one of uh most attractive properties of proof of work and uh well uh in Ergo we have some uh very uh novel uh Solutions uh for manuals for example uh what we are calling in Ergo Community uh fire initial uh mining offering Fimo uh so uh uh lets get into details a mission in Ergo has done via Smart contract so all the arcs are explicitly exist since before the Geniuses blog and then uh yeah those arcs are not available immediately but rather they are locked uh uh with the contracts under every uh block the contract unlocks a block reward according to emission schedule uh so uh then uh yeah we have pretty much uh the same uh as a Bitcoin and other profile cryptocurrencies but in case of Ergo so ignition is not hard coded in protocol clients and uh well Erikson mods appearing out of uh thin air rather uh we have well uh precisely defined contracts and uh well uh this contract is uh not different from other contracts and uh this has a lot of advantages so we can test this contract separately from the courts and uh a mission logic could be checked by people are not familiar with protocol clients and languages used to call them so we have a better understanding better coverage and uh well its also uh well actually a harder to change the emission schedule so uh yeah there are many advantages but also uh whats interesting is that uh emission contracts uh could be uh well so initial emission contract could be reused for other tokens and also uh could be modified in different ways uh and uh this is the real thing so uh getblock dot ir mining pool is running sub pools uh which allowed to mine uh flux Neta Comet tokens in addition to erga so this brings additional profit to miners and this is uh well in case of launching new tokens a good alternative to airdrops right so also uh very simple so for a team launching cat talking there is no need to combat spam accounts and so on so I usually had problems in High Drops uh the software automatically and the distribution is then Fair so everyone needs to do work right so basically uh Bank lottery tickets with hardware and electricity costs are being spent to participate in profile work Lottery to get tokens via uh if Imo all right but uh thats what we uh do have now and actually uh in future we can have even a more interesting things so well we already discussed some on form for example Market driven emission and the idea is as follows so in addition uh to well uh just emission logic we can use an additional inputs from a reference market for example from a uni swap like automated market makers liquidity pool and uh then uh we can use an inputs from Market uh for example to reduce emission based on price in the reference Market assuming thats uh this price is reflecting the true price well due to Arbitrage this would be the case problem so uh yeah we cannot use uh emission then uh when uh for some time a price on the reference Market is below some uh Target price and uh well if uh price on the market is above the target for enough time then uh we can uh race the target eventually also uh which basically uh means that emission is uh well uh not uh uh setting Stone but uh rather would be changed according to market conditions uh which actually could lead her to interesting games between miners supplying new tokens to the markets including the reference market and buyers right and uh yeah I think in the future we will see uh some contracts some some interesting uh games maybe uh new problems uh with uh such contracts uh new interesting problems as usually all right next property uh attractive property of proof of work is hardness so uh to get results uh you need to do some work right and uh this uh uh work uh well average expected amount of work could be a set by setting a Target right uh and uh uh there are many applications so uh for example vanity nfts and actually its a continuation of old vanity uh Bitcoin address idea from uh 2012 Maybe right so they will uh and uh I guess still around some vanity address generator so for example if you want to have a Bitcoin address like uh one Microsoft uh some hotels uh then uh yeah you can get such address by iterating our uh and input and here after a certain amount of work done on average so you will uh generate such an address and now we have nfts so some of them uh well uh where in terms of items uh nfts to represent uh but we also uh can have uh lets say a technical variety by uh doing some work so uh basically uh combining uh well uh when it uh from The Real World with uh well technical when it so in Ergo our token ID is uh well uh ID of first meaning transaction input and then you can iterate our some filter that transaction had to get a token ID have a certain properties and then yeah you can have an nft representing not just um uh something uh rare awesome in uh real world but also uh having some math work right and there are some vanity nft generators on arga for example uh cyti by the way uh alcohol winner and uh you can play with this uh application and you can generate your own vanity nft with it all right and uh well uh whats not done yet but uh definitely I can be built and use this uh well uh some access uh tokens a sort of access tokens uh so uh we can imagine a smart contract which I can issue her tokens for her work done and presented to the contract and then such tokens can be uh used uh instead of uh utility tokens assault right if well uh there is no reason to sell the tokens right for some reasons and um yeah such tokens can be used than as uh kind of uh utility uh dragons here so for example uh we can imagine uh that they can be used to register a name in a name system right and then manuals can uh actually uh have additional profit by generating such tokens uh and uh yeah they also uh can sell them on secondary uh markets uh which uh well again Im not here none but uh sounds interesting um um then uh yeah lets talk about so how a smart contracts can be uh used uh to improve uh decentralization on the consensus layer foreign time ago actually initially in the context of Bitcoin there was a P2P pull proposal using dedicated chain to store shares then uh there was a paper on a smart pool for ethereum but it was too expensive uh to be launched on the ethereum blockchain and as far as I know there is uh now any uh practical instantiation uh yet uh I mean uh the the the uh such instation on the ethereum itself and uh there are no such contracts on well ethereum uh like blockchains which are still on provoked such as ethereum classic and ethereum pop uh all right um but uh uh in Ergo there are uh now uh certain attempts uh to uh build a new generation of uh smart decentralized pools empowered by uh Snips so succinct turn on attractive share proofs and uh well then uh uh shares or whether even uh proofs of shares to be stored on uh layer 2. um I guess uh uh there will be another talk during the summit about Snips specifically and uh get Block is uh working uh on that uh so lets uh wait uh for uh decentralized pools and this would be uh well uh agreed success in case of uh uh successful application like that running in the wild um thats uh you know uh for my talk I guess but uh well there are other uh applications if we are talking about proof of work and uh D5 uh so um there is uh uh go up swap application still in development uh which allows to automatically convert mining profits into stable coins uh which could be especially uh good for some uh jurisdictions to simplify Taxation and so on right uh well uh then uh what was uh discussed uh but still not done well uh for both of Ergo and uh also ethereum well uh I I dont know about any uh contracts run on ethereum uh I mean before Merchant now an ethereum classic ethereum Paul zone so our contraction uh mining crash rate when uh miners uh again uh well I do Financial hard contracts uh with conditions on feature hash rate to stabilize the future income so there are some proposals in our community but still there are no any applications about that uh then uh lets uh not forget about possibility for contractual layer for smart contracts to uh well modify properties of the consensus protocol uh there are different possible applications here right so uh when uh Argo has a non-outsourceable uh proof of work uh so uh Vision thats a non-out source ability for the Ergo and uh for all the Practical known outsourcability proposals can be bypassed by using smart contracts uh collateralized smart conducts then yeah with miners waiting on the blockchain we can imagine uh smart contracts uh to be used so to uh Grease miners to bribe them towards for certain things and so on so uh well uh its uh still uh very actively developed a topic before can defy and we can imagine a lot of new interesting proposals and applications here and well uh lets hope for a successful developments and for more profits for miners uh supporting decentralized networks ah thank you for your attention Ergo Foundation member and core developer Alexander Chepurnoy gives his presentation on Proof-of-Work on Ergo, including all the unique advantages and possibilites.For more information on ErgoHack V or to participate in the next one, visit -------------------------------------- Website Whitepaper Ergonaut 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