How do Emblems provide Synthetic Mining Power?
What does it mean to mine a blockchain?
Generally speaking, “blockchain mining” is the process of adding transaction records to a blockchain’s public ledger of past transactions. This process is both difficult and resource-intensive and is done by devoting computation power from a "mining rig", or a single computer system, that performs the necessary computations for "mining".
What is "Mining Power"?
For miners of tokens like Bitcoin and Ethereum that compete with global dedicated computing resources, in order to win more blocks, their machine(s) must have more mining power than their competitor's machine.
Mining power boils down to a simple formula involving three main components:
Hashing Power, Energy Efficiency, and Energy Costs.
Miners are incentivized to optimize all components of that formula. Increasing their overall Hashing Power or Energy Efficiency per unit without an increase in Energy Cost is the primary method users take to increase Mining Power.
How do miners increase their Mining Power?
Miners can increase their Mining Power by:
- Physically adding more machines to their mining rig/farm.
Downside: This increases the Energy Costs.
- Selling their old machines and purchasing new ones.
Downside: Staying competitive via this method would require frequent replacements and downtimes, as improved hardware development occurs at a high frequency.
Emblems as Synthetic Mining Power
Emblems, the ownership token of Overline, represent a method for Overline miners to artificially boost their Mining Power without needing to add or upgrade their machines.
Without any Emblems, a miner receives 2 Overline(OL) for a successfully mined block. Emblems grant owners the ability to add more transactions per block mined and thereby increase their OL reward. The size of the expanded block and larger OL reward is dependent on how many Emblems are attached to a given miner.
Emblem rewards are completely on-chain and are automatically rewarded to the address of the miner who successfully wins a block AND has assigned an address to their mining rig that holds the requisite amount of Emblems. The Emblem ecosystem for miners does not require any staking or depositing of EMB to any 3rd part address whatsoever.
The algorithm calculating the OL bonus for EMB is logarithmic, meaning that as you own more Emblems, the relative cost of each bonus unit of OL increases. To get any bonus reward you must have at least 6,757 EMB, which would result in 1 bonus OL (a total reward per mined block of 3 OL). Any amount below 6,757 EMB does not grant any Overline bonus to a miner who wins a block. To reach their maximum marginal utility, a miner would need 59,239,883 EMB, which would represent a bonus 164 OL (a total reward per mined block of 166 Overline).
By enabling miners to win more blocks and even increase the rewards per blocks, Emblems provide "Synthetic Mining Power" in a way previously only possible through upgrading or adding new hardware to a miner's setup.
Updated 29 days ago