A post launch look at SIGMA

  1. Lack of decentralisation — A single pool was frequently finding more than 50% of the blocks, with almost all blocks split between only several pools.
  2. Long block times — It had started to become extremely common to see blocks taking 20 minutes or more to come in instead of the target of 2.5 minutes. To the extent that sometimes only 500 blocks were found in a day instead of the expected 576. Erratic block times like this presents usability issues for our users as well as having potential security implications.
  3. High barrier to entry — It was expensive/impractical for potential new users to get involved in mining. This was a waste of a potential way to grow our user base and interest in the coin.
  4. Shrinking hash rate — Our Scrypt hash rate was shrinking over time meaning that security was slowly diminishing. While it was not at a point where it was problematic it also was not ideal going forward.
  5. Toxic mining community — We have found over the years (with some exceptions of course) that the community of people who own scrypt mining hardware and run Scrypt mining pools is very small, shows zero actual interest in the coins they mine at the best of times, and is outright toxic a lot of the time. It seemed it would be in the best interests of the coin to lose these miners and to attract instead fresh people in their place.

A look into performance so far

We are now three weeks past the switch over, so how are things going? Obviously a lot will still change as things mature, so we are watching with interest, but we are far enough past the initial activation that we already have some data that we can start to look at.

Decentralisation

Under Scrypt the majority of blocks were being found by only one or two pools. With it not being uncommon for a single pool to be controlling 50% or more of blocks. The below screenshot (July 2019) nicely demonstrates this.
This is not good at all, however to be clear this is not a Gulden specific problem, in fact as bad as the below screenshot is, the majority of PoW coins are in an even worse position…
It is also worth noting that for Gulden a single miner having 50% of the hash is a lot less of a problem than for a regular coin, the reason being that each block still requires a witness from our large and diverse pool of witnesses (834 accounts and growing).

Previous (July 2019) mining distribution under Scrypt — Courtesy Dactual.com
Previous (July 2019) mining distribution under Scrypt — Courtesy Dactual.com
Gulden; Mining distribution a week after activation — Courtesy Dactual.com
Gulden; Current mining distribution — Courtesy Dactual.com

Block times

  • max: 2158s (The longest block for that day took 36 minutes)
  • min: 1s (The quickest block took only 1 second)
  • mean (average): 162s (On average blocks took 162 seconds to find)
  • median: 56s (Half of the blocks for the day took less than 56 seconds to find, the other half more)
  • max: 785s (The longest block for the day took 13 minutes)
  • min: 1s (The quickest block took only 1 second)
  • mean (average): 148s (On average blocks took 148 seconds to find)
  • median: 100s (Half of the blocks for the day took less than 100 seconds to find, the other half more)

Barrier to entry/New mining community

The barrier to entry has quite clearly being lowered for now. With Scrypt to start mining Gulden an ‘investment’ in specialist hardware was required — while currently right now anyone with a reasonably new laptop or desktop machine can download the wallet, run it and expect to eventually find a block.

Map of Gulden nodes (last 24 hours) — courtesy Dactual.com
Gulden network witness weight — Courtesy Dactual.com

Shrinking hash rate

Under SIGMA the previous Scrypt hash rate is of course no longer relevant. We have started again from zero (so to speak) with the hash rate of the new algorithm, and we are still in the early days.
Still, so far the hash rate is in a healthy upward trend — which is what we should expect to see.

Gulden SIGMA network hash rate Oct 23 — Nov 08; Courtesy Dactual.com

Impact on coin security

The above all sounds good, but has it come at the cost of security? If so that would likely not be good.

Attack cost 3 confirms under current SIGMA conditions:We now have over 90'000'000 NLG locked up in witness accounts, with a total weight of 903'582'015.To create a single witness account that holds 1% of the  network weight an attacker would need to lock up 865’000 NLG ($6610) for a period of 1 months — this would give him a 1% chance of  witnessing any block he mines.An attacker would require at least 3 such accounts ($19830) in order to attempt to attack 3 confirms.Additionally the attacker would need additional funds with which to perform the double spend, it is a reasonable assumption that he is not going to lock up $19830 to try perform a double spend for substantially less - given the risks that a double spend has in terms of lowering the value of his locked funds.
Therefore we can assume at least an additional $20000 in coins required for the double spend.
If he were to acquire 100x the network hash rate (140 gh/s), at a rental cost of ($7656), he could mine roughly 100 blocks for every 1 the main network mines, as he would have a 1% chance of being the selected witness for each of these blocks this would give him a reasonable but not guaranteed chance of both mining and witnessing three blocks before the main network.The above assumes that acquiring over 5'190'000 NLG in order to attempt to stage this attack does not push up the price of the coin - in reality it is almost certain it will. An increase in the coin price means that the attacker would need to spend even more acquiring the Gulden as well as that the network hash rate will increase require more expenditure on mining as well.The attacker additionally faces various other difficulties in terms of ensuring none of this accounts are in cool down for the attack - and that such an attack is potentially detectable.This puts the attack cost at well over $50'000 at a minimum, likely more and for only 3 confirms, for each additional confirm more witness accounts are required and the attack becomes exponentially more expensive.
Gulden post-nonce distribution — Courtesy Dactual.com
Gulden pre-nonce distribution — Courtesy Dactual.com

Summary (tl;dr)

With SIGMA we set out to achieve numerous different objectives/improvements. So far it has exceeded our wildest expectations.

  • Network security has already increased, despite reduced energy consumption.
  • Block times, and therefore overall coin usability are massively improved. With expectation of further improvements still once phase4 activates.
  • Active installs/nodes/users on the network are massively up.
  • A more positive mining community has emerged.
  • Our community is invigorated and more alive again with new users coming in and old users having more to be positive about.
  • An increase in witness accounts has also been observed.

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