0xBUTT mining pools, and the absence of mining pools…
0xBUTT (also known as a ButtCoin) is a digital crypto-currency created as a meme-coin which contradicts the basic mechanisms of the most-popular digital asset known as the BitCoin. This project begun as an idea to simply contradict BitCoin’s inner mechanisms, and mining is one of them. Project is experimental, and the main objective is to simply have fun contradicting the BitCoin; thus the name ButtCoin has been derived as a satire. The purpose of this article is to explain why there are no pre-mined coins, how it is possible to have a zero pre-mine and yet the circulating 33 million coins, how the mining works, why there are no mining pools.
The first confusion that appeared while establishing this project happened with people asking about the availability of 33 million coins, yet it has been claimed that ButtCoin did not mine a single coin. The simple explanation is that 33 million coins are ERC20 tokens, and that a simple minting Solidity function can create as many tokens as you like. Furthermore, the mining is not done to keep the network alive, but simply to mint the tokens. Therefore, the 33 million tokens was a way to kick-start the project, share a part with exchanges, build a community, and feed the starving developers. Therefore, the mining simply means minting an ERC20 token by solving the Keccak hashing (SHA-3).
Soon, another confusion followed and raised a question about the total supply, since there are 33 million tokens. By design, we can mine this token to infinity, having the forever-rising difficulty. This means that there is simply no total supply. Since this token is self-destructive (meaning, 1% of each transaction is lost forever), a total supply would always be the available supply of a token. Furthermore, we can track how many tokens were burned, how many were minted, and how many currently exist. We can use these numbers to derive the more precise metrics while having additional variables. We can also track how much money in USD and BTC has been destroyed to know the minimum price of this token.
However, the forever-rising difficulty could become too hard, with too many tokens burned. In that case the token would become a store of a value instead of a deflationary digital currency. This has been solved simply by lowering the difficulty levels when 95% of tokens are burned. It could also happen that tokens are simply scattered, and that we cannot reach the 95%. In that case, we track the last mining reward. If the mining reward has not been issued in (approximately) 3 years, the mining difficulty must decrease. In this case, a difficulty does decrease rapidly, enabling the miners to make as many tokens as possible, and in the shortest time as possible. It may bring instability of the market-price, but only for a brief moment. Furthermore, this is only a fail-safe device which does not happen often, and it is what makes this token mine-able to infinity.
A complaint that was given by experienced BitCoiners was that this token introduces too many variables. Indeed, it does, and is an experimental token. Another variable and a confusion that it introduces is that block is the same as the mining era. This means that every mining era, we have only one block to mine. This idea is very important, and it will explain why there are no mining pools created by the ButtCoin.
This table (see below) has been made to illustrate the mining difficulty as well as the rewards per epoch. Please assume that you are solo-mining with a GTX 1080. The first few mining solutions happen very quick, then slowly turn into minutes, hours, days, weeks, etc… Each time the mining difficulty increases, the mining reward is increasing too.
Although the last era is 234 and the total number of mined tokens close to a billion, we should never reach that target. Instead, we will oscillate between the minimum and the maximum eras and be able to burn and mine the token to an infinity. This way, we have a forever self-destructive, and a forever deflationary currency that does not become a store of a value.
Now, to answer the last and the most confusing aspect regarding this token… there are not going to be any mining pools created by the ButtCoin (0xBUTT) team! Certain members may join and help the community to build the mining pools, however, ButtCoin is not going to provide one. Reason is very simple… The most frustrating aspect of any mining pool is having a “bad luck” mining the blocks. The interface, UI, metrics, and everything else may be perfect… However, people are simply not mining anything having a bad luck finding the solution for a block. Furthermore, some mining pools have different reward politics. Some take fees, others favour certain miners, etc. Since the mining difficulty is rapidly rising, there are two possible scenarios that can happen. One is, mining pool is created, and it is used for as long as the coin exists. Second is, multiple mining pools are created and given the rapid mining difficulty increase, people will choose which mining pool to join. At the end, there will be just one mining pool that everyone will use. This way, the distribution of a token will be somewhat equal among the people, and there will not be whales to manipulate the market. ButtCoin does not wish to be the whale on the market. The initial supply of 33 Million tokens is enough to make this project a success, and that is all that matters to a ButtCoin team. The rest is up to a community.
The last confusing aspect is the insane hash-rate displayed by the miners. Since we are mining one block per era, and since the model is different, the mining software is off and is not displaying things properly. Furthermore, even if it were displaying the proper numbers, the rewards are greater than what any BTC miner can obtain. To ButtCoin, miners come first, and are paid according to the amount of work they performed instead of being ripped-off by the rewards and electricity bills.