Koomey's Law

Koomey's Law states that, “for a fixed computing load, the amount of power required will fall by half about every year and a half.”

Since the creation of coins is based on how much energy processors use to solve a problem, EnCoin must adjust the difficulty to account for Koomey's Law or coins will be created too cheaply.

Adjusting Difficulty

While Moore's Law covers how increases in processor power are handled, it fails to account for when processor power remains level or increases while energy consumption or price decreases. Modern GPUs use approximately 150 watts of electricity but there is no guarantee that future GPUs or cheap, specialized hardware won’t use 75 watts. If fusion power is finally invented and rapidly adopted, the cost of electricity may halve.

Either way, the EnCoin Network has a solution. After 10 CCPs, the Mint Block coin award will either adjust down to 4.5 coins per block, or back up to 6 coins per block. Each time the difficulty will divide or multiply accordingly.

When the award drops to 4.5 coins per block, the client software will automatically adjust the minter’s output accordingly. If the minter finds that it is still profitable or more profitable to raise their output back up, then they are free to adjust it themselves. This will encourage competition among more efficient devices and weed out less efficient devices. Instead of 125W devices leeching value off of 150W devices, they will now be the trend-setters for difficulty. When the block award and difficulty increases again, Mint Blocks will take more Coin-Hours to find than in the previous 6 coin award period, thus adjusting for changes in the consumption or price of electricity.

EXAMPLE:

  1. The current difficulty for creating coins is a value of 100 which causes the average coin to be produced in 50 coin-hours.
  2. The Network originally had 100% of computers producing coins using 150W of electricity to produce a coin in 50 coin-hours, 50 * 150W or 7.5kWh per coin.
  3. 50% of the computers producing coins now use 125W of electricity while 50% continue to use 150W, while both produce coins at the same rate.
  4. The cost to produce a coin in 50 coin-hours is now 50 * 137.5W or 6.875kWh.
  5. When the Mint Block award drops to 4.5 coins, the difficulty drops to 75 as well and the client scales back computer output to 75% so that 125W computers are using 95W and 150W are using 115W.
  6. By using the client calculator, those using 95W can easily see that they will make more coins at a profit by increasing their output to 115W (17%). Those using 150W computers cannot profitably increase their output because they are only getting 4.5 coins where they were once getting 6. The client can even be used to automatically increase this power output based on the market price supplied by the user (or by having the client contact a site in lieu of this).
  7. Now the original 125W computers are producing coins at a 17% faster rate than their 150W competitors. This will cause the difficulty to increase by 8.5%.
  8. When the block award returns to 6 coins, the difficulty will be 108.5, or 54.25 coin-hours to make the same coin as before. 54.25 * 137.5W ~ 7.5kWh.

A formula could be added so that if it takes too long to award blocks—such as if it begins to take over 100 coin-hours for one coin, the difficulty and the award could be cut in half, for example. This would be easy to regulate.

koomey_s_law.txt · Last modified: 2015/10/15 21:32 (external edit)
 
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