Comment by emil-lp
2 months ago
If you mine a block without revealing it, not only are you the only one that can mine the next block after that, but everyone is mining on the "wrong head". There's of course the risk that someone finds a different head in the meantime, but otherwise, you waste competitors' resources, while you get an advantage on the next block.
What makes it more likely that your first block ends up the next head and you're not wasting your own time on the second one if someone beats you to the first one while you're holding off?
For an arbitrary block, nothing.
It doesn't have to be arbitrary. You know when a block was "lucky" and you found it ahead of average by a given percentile. You leverage those blocks.
They are not mining on the wrong head. They are mining on the current head. If they find a block it will be accepted as the new head and the withheld block will be rejected, so it's not wasted mining time at all.
Not an expert, but I have two thoughts:
1. They don't have to wait until another miner finds a block, they can just wait "for some time" and then release their block. All that time gives them the edge for the next block.
2. My understanding is that if two different blocks are found concurrently for the same head, then the network waits for the next block to select which "new head" is accepted. I.e. when there are competing chains, the longer chain wins. So I could imagine that a strategy could be to wait until some other miner announces their block and release yours precisely at that time, hence creating two competing chains. But you presumably have an edge because you have already been mining for a while on top of your block.
There's no edge. Having spent time mining in the past doesn't increase your odds of finding a block in the future.
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You can determine statistically whether you have found a block relatively early, and conversely whether other miners are unlikely to find one soon.
So you can get a head start on the next block from the likely new head block you've found.
It only works on average of course, you might be the one wasting resources if someone else published a block while you're withholding yours, but the trick is for you to gain an edge on average.
Now what happens if everyone is doing that calculation? That's where you need to do the game theory analysis (which I haven't and don't claim to understand).
> You can determine statistically whether you have found a block relatively early, and conversely whether other miners are unlikely to find one soon.
Finding a block relatively early doesn't affect the odds of others finding a block soon. The odds are always the same, each hash is an independent event.
I don't see why withholding would get you an edge on average. If the others find a block while you're withholding, you lose your reward. If you find another block before them, you get the rewards of 2 blocks, exactly like if the same happened but you didn't withhold.
The only way for you to have an advantage is if you find a 2nd block at the same time as another one finds one on the other chain. You can then publish a height of 2 vs a height of 1, so you win. But to do that you have to first put your first block reward at high risk by withholding it. I don't think the odds are in your favor here.
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