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 to remain profitable.

Mining power and profitability boils down to a simple formula involving three main components:
Mining (or Hashing) Power, Energy Efficiency, and Energy Costs.

If a miner can increase their overall Mining Power or Energy Efficiency per unit without an increase in Energy Costs, a miner can increase their profitability.

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 hedge their hardware investments by artificially boosting their Mining Power without needing to add or upgrade their machines.

Without any Emblems, a miner receives 2 Overline for a successfully mined block. Emblems grant their owners the ability to add more transactions per block mined and thereby increase their Overline reward. The size of the expanded block and larger Overline reward is dependent on how many Emblems are attached to your miner.

The algorithm calculating the Overline bonus for EMB is logarithmic, meaning that as you own more Emblems, the relative cost of each bonus unit of Overline increases. To get any bonus reward you must have at least 6,757 EMB, which would result in 1 bonus Overline token and a total reward per mined block of 3 Overline tokens. 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 Overline and a total reward per mined block of 166 Overline for that miner.

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.