PoP Subsidies
See: PoW_vs_PoP_Mining
Contents
Overview
PoP Subsidies allows someone who was already going to send a Bitcoin transaction to upgrade that transaction to a VeriBlock PoP transaction, earning a VeriBlock reward in exchange for embedding data in their transaction which secures VeriBlock (and other VeriBlock-secured blockchains) with Bitcoin.
Normal PoP miners who secure the VeriBlock blockchain to Bitcoin do so by publishing VeriBlock blockchain state data to Bitcoin by performing Bitcoin transactions. With PoP Subsidies, this publication is done inside a transaction that a user was already going to send on the Bitcoin network anyway, thus subsidizing their Bitcoin transaction fee with the VeriBlock PoP mining reward.
PoP Subsidy Details
In order for a user to take advantage of PoP subsidies to earn VeriBlock while sending Bitcoin transactions, they must be using a Bitcoin wallet with PoP Subsidy integration.
Upgrading a Bitcoin transaction to a PoP Subsidy Bitcoin transaction requires embedding 80 bytes of data in a Bitcoin transaction using OP_RETURN (which adds a total of 83 bytes to the size of the Bitcoin transaction). In return, this transaction will pay the miner for their publication with a reward in VBK. Acquiring the data to embed and adding it to the Bitcoin transaction is handled automatically by the PoP Subsidy-enabled Bitcoin wallet. The PoP Subsidy-enabled Bitcoin wallet will perform a PoP publication of the VeriBlock block it estimates will yield the highest reward.
Adding the additional 83 bytes to the Bitcoin transaction does increase the total fee paid for the Bitcoin transaction, but when PoP Subsidies are used on Bitcoin transactions that are paying appropriate competitive fees, it is expected that the rewards from VeriBlock PoP mining will exceed the extra fees spent sending Bitcoin transactions, thus subsidizing the Bitcoin transaction fees. In some cases, the reward for PoP mining can even be higher than the fees paid to send the entire Bitcoin transaction.
Generally, the users who would benefit from performing PoP subsidies are those which are sending Bitcoin transactions with transaction fees that are high enough to have a high chance of getting the transaction into the next Bitcoin block, but are not so high that the user is paying for the near guarantee of being in the next block.
How the VeriBlock wallet receiving the VeriBlock PoP payouts is managed depends on the specific PoP Subsidy-enabled Bitcoin wallet operates. For multiwallets that support both Bitcoin and VBK, they will likely manage a VeriBlock wallet on your behalf inside the wallet. For wallets that are Bitcoin-only (or at least do not support standard VeriBlock wallet functionality), they may either generate a VeriBlock wallet file for you (which you would need to import into wallet software that supports VeriBlock to spend), or they may require that you generate a VeriBlock address elsewhere and paste in that address to receive rewards.
