How is this a fair launch?

General
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one of Nockchain’s promoted values is that it will have a fair launch of a proof of work blockchain, meaning that…

  1. the native asset $NOCK will be issued solely through block rewards for successfully solving the proof-of-work puzzle, and,
  2. given the same energy and hardware investment, everyone will have the same chance to mine blocks and earn the block rewards that comes with them.

the implication is that there shouldn’t be entities of special privilege commanding the chain’s consensus or earning rewards, other that what electricity and compute each miner has in competition.

point #1 was nailed by not having any preallocation of $NOCKs for the developing company Zorp’s team, investors or other entities. all coins will be issued to miners as block rewards, according to the issuance schedule defined in the consensus protocol.

point #2 is basically a direct consequence of Nockchain basing its consensus on a proof of work puzzle, but there are technical subtleties that have been less discussed.

in proof of work, beyond the operational costs (mostly electricity) and hardware performance and costs, the efficiency of mining depends on the mining software. once the puzzle algorithm is known, it’s natural that miners will compete to write mining software that makes better use of their hardware.

the exact algorithm hadn’t been published until May 3, 2025, 2.5 weeks before the currently anticipated genesis launch date on May 21. anyone with knowledge of the final algorithm before May 3 could have used the time to create an optimized mining software that outperformed the open source implementation distributed to the public.

Zorp team members had knowledge of the puzzle way before the open-sourcing of Nockchain. in theory, they could gain a special privilege in the mining competition. knowing some of them, and expecting that they would be foolish to destroy the fairness of the launch, I didn’t worry much about this. later, in one of the weekly Twitter spaces, Logan said that team members will refrain from mining at genesis. again, this takes trust, but it made me dismiss this scenario altogether.

Zorp financed the development of Nockchain by raising venture capital funding. given the lack of a premine, many people wondered what investors got. I’ve read basically every blog post ever published on the Zorp and Nockchain websites, listened to all weekly Twitter spaces (most of them I attended live), and I recall two answers to this question: investors received company equity in Zorp and technical assistance from Zorp regarding the Nock stack.

this sounded unique. given my familiarity with some of the people at Zorp, it was good enough for me, especially after the Zorp blog post last June that was dedicated to the fair launch sentiment (emphases mine in all following quotations):

The rules for mining Nocks are transparent, the competition open, and the opportunity universal.

by miners running open source code available to anyone with a computer, the network avoids concentration, both economically and administratively, which broadens its reach and durability far beyond what is possible with community points or airdrops.

not to talk about this blog:

Bitcoin’s early mining implementations weren’t optimized. The community optimized the miner over time, and mining grew more competitive. We’re taking a similar approach: no pre-mine and releasing an open-source reference implementation of the mining node.

after this, I didn’t have any doubts about the fairness of the distribution of the knowledge about the puzzle algorithm.

then, on May 7, a mere two weeks before the genesis launch date, the Zorp website published a short blog post titled Zorp’s Business Model, including this:

Zorp is engaged in commercial agreements to license proprietary software to mining partners to help bootstrap the initial security and proofrate of the network.

I was shocked to read this after listening for 1.5 years how fair Nockchain’s launch will be. since Zorp were the only people with substantial foreknowledge of the exact proof-of-wok puzzle, and it turned out they sell proprietary mining software to their “partners,” I wonder,

how is this a fair launch?

the reason given, to “help bootstrap the initial security,” sounds preposterous after how much ink has been spilled about the resilient, bottom-up, self-organizing incentives of proof of work.

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Paraphraing the great Scott Adams, “fair” is for children and retards.

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Suppose the puzzle algorithm was published 3 months ago. Would you have produced any more prover optimizations than you have in the past 2 weeks?

I don’t think I’d have, but some professional miners might have meaningful optimizations by now, resulting in a more concentrated proofrate at launch.

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suppose you have 2 kids in class one smart one retarded. should the smart kid be made to hold back?

it’s free for all, and it doesn’t mean that 3 retarded kids still can’t match the number churning capacity of the smart one. sure you pay more for 3 retards but you can still do it. think of it in terms of network mining opportunity cost. just throw more retards at it if you’ve the conviction for it.

equality doesn’t mean equity, no dei-for-miners here lmao

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We’ve been maximally transparent ahead of launch, defining explicitly what we mean by fair launch as well as explaining our business model in-depth, all before anyone points any compute power at the network or competes in the ZK-Proof of Work competition.

There will be no pre-mine. There will be a verifiable starting gun for the competition, the genesis block. The competition will start at the same time for everyone, and we hope will continue forever.

We have noted explicitly many time across our writing that asymmetries of information and expertise are realities no matter what.

Fairness is not equity.

We have taken a radically fair approach by not doing a pre-mine nor promising investors fixed sums of tokens. We deeply appreciate our investors and team for being willing to take on this exotic risk profile.

We’re not aware of any practical way to effectuate a research project of this scope without funding, nor are we aware of any practical way to achieve said funding in a more fair or transparent way.

Thank you for your feedback.

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Expecting a team to put THOUSANDS of hours into a project, make sacrifices, lose time with their families that they will never get back, bend over backwards to make a fair launch they didn’t have to make, etc. to not have any advantage at all in making money is actually delusional.

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Yea, I mean my take on this would be that information asymmetries != participation asymmetries. Once the chain is live, it is in effect actually beyond Zorp’s control. They might have some thought leadership or philosophical clout, but the heaviest chain is the heaviest chain after today and there’s nothing to say that their mining strategy would be the most competitive. Someone could roll in with GPU optimizations, wild ASICs, etc. and the heaviest chain will remain the heaviest chain. Same point would be made around upgrades from the dumbnet to a smartnet.

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I don’t believe anyone objects to the team receiving a larger share of the coins. However, it’s very dishonest to describe the project as a ‘fair launch’ if team members or partners likely already have functioning or nearly complete GPU, FPGA, or ASIC implementations. One could argue that this approach is even less fair than how many proof-of-stake projects begin, which are often criticized for being unfair.

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the team has clarified that partners will be doing CPU mining at launch, not GPU nor FPGA nor ASIC

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I’ve been following the Nockchain project since a month after its public announcement at Urbit Assembly 2023, reading all blogs, almost all tweets and listening to all presentations, Nockchats and most interviews. this May was the first time I’ve ever heard that Zorp is selling proprietary mining software to “partners,” who I presume are the investors. if this was made clear somewhere else earlier, then I overlooked it, and I’m curios to know where. please point to it.

there is a big difference between organic and artificial asymmetries. providing optimized mining software to select players, using your exclusive foreknowledge—not expertise, but the withholding of information—regarding the exact algorithm is an asymmetry you introduced on purpose.

the regular way of rolling out a new open source blockchain has always been publishing the code and running public testnets with community participation for months, especially in the case of proof of work, for fairness and hash rate stability. this was the case a decade ago when proof-of-work launches were the norm, and although they became more rare, there are recent examples too. for Nochckain, that period between open sourcing and genesis was two weeks.

I know this, and others may not, but you know this discussion is not about equity. it’s about honesty.

I don’t have a problem with the project raising funding. I recognize what a risky and capital-intensive effort it is, and respect your commitment to going forward with it.

I have a problem with the promotion Nockchain’s launch in every avenue as a unique, equal-opportunity mining event for over a year, then disclosing right before launch that Zorp sold insider knowledge that gives investors’ mining operations a head start over everyone else.

I have a problem with the project’s constant trashing of proof-of-stake ICO backroom deals when Zorp performed something like the proof-of-work equivalent of it. there’s little qualitative difference between investors receiving a premine and investors being given a higher chance of winning block rewards. in both cases, they look to make a profit on their investment by using their privileged access to the asset’s supply and dumping it on retail holders.

in some ways, a premine is more fair because the level of privilege of special parties is announced ahead of time, part of the consensus rules and verifiable in the source code. for Nockchain, this was and can only be opaque. only those with access to the proprietary mining software can know for sure how much they are outperforming the part of the network that uses the open source implementation.

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a premine is more fair

and here we part ways philosophically

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In that same blog post you referenced, Thinking About a Fair Launch, Logan wrote:

“Though Nockchain will have the fairest launch since Bitcoin, don’t get us wrong: fair competition does not mean equality of outcome. As the architects of Nockchain, we have some initial competitive advantages. Our technical familiarity with Nock, our proximity to the chain and its roadmap, and our early vision for the future of ZK-compute may give us an advantage similar to that of early Bitcoin contributors or members of the Cypherpunks Mailing list.”

The subsequent details released recently are harmonious with these statements from last year.

From the Telegram group and on X, it looks like there are thousands of people, many in Asia, prepared to run miners and buying large amounts of hardware. Further, these people have had multiple weeks to optimize the miner implementation. Who knows how much hash power they will be throwing at the network, even from launch?

Nockchain’s launch is much fairer than a premined ICO token.

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There are already GPU miners

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emphasis mine. this advantage is anything but similar. Satoshi didn’t sell insider knowledge about the use of SHA-256 to investors. it was actually mentioned in the Bitcoin white paper, published months before genesis. the Cypherpunks Mailing list is an open discussion forum. the Zorp team chat and private repos were/are not.

and we’ll never know how much more optimized the proprietary miner implementation is that was developed for months or possibly over a year by the only people who had long-term access to Nockchain’s source code.

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I’m not sure what you’re aiming for out of this discussion.

Zorp communicated intents and relevant definitions early and more than once. It’s not going to change its business model just so that mining pools can capture all of the value of $NOCK.

Zorp as a company seeks to embody a particular ethos about the world and the way that tools like Nock and Nockchain are used. Utilizing investment to enable that world is a consistent move to make.

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to quote and emphasize myself:

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The early Bitcoin devs certainly had, and profited from, asymmetric information and expertise, right? Satoshi leaving one wallet untouched is a beautiful gesture, but that doesn’t mean he (or other early devs) did not profit from their asymmetric info and expertise. Of course they did. But we still call that a fair launch, indeed one of the fairest conceivable.

Now, @chaser you say that Satoshi “did not sell his insider knowledge about the use of SHA-256”, and that it was mentioned in the Bitcoin white paper published months before genesis.

But he and the people who developed Bitcoin did sell their inside knowledge about the system—not to investors, but by mining it; they effectively “sold” their unequally distributed knowledge and skills to get tokens before others knew about it. Even if you think Satoshi himself was some angelic being who profited zero, that’s more poetic than anything else—the point just moves to the other early devs who helped to build it and mined at the very beginning.

The way I see it, Zorp is doing the same thing, just financially engineered for 2025. Effectively giving some of their asymmetric advantage to investors in order to finance the construction of this thing in an advanced and competitive post-Bitcoin context seems to me perfectly fair and quite precisely the same fairness as Bitcoin. Not necessarily equitable in outcomes, but fair.

Actually, you could make the argument that the Nockchain launch will be more fair than Bitcoin’s. Satoshi mentioned the Bitcoin white paper months before genesis, but did he actively spend time and money to inform the world that Bitcoin was coming and they should prepare to mine? Did he do that for a whole year? No. Zorp did. So Satoshi gave the world slightly more time to read the white paper than Zorp gave to study the Nockchain architecture (by a few months), but Zorp gave the world much more time to prepare for what was coming (by more than a few months).

And honestly, the consumer social web is more open than the Bitcoin mailing list was. Logan said more than a year ago now in a few places that are easily read/listened to/searched for that Nock has interesting advantages for ZK-proving and that he was building an L1 to do this. Hearing that, studying Nock, studying ZK, and preparing to mine at genesis over the past couple years would have been more open, feasible, realistic, and accessible for the average person in the 2020s than getting early exposure to Bitcoin at genesis!

But at this point we’re mincing. Fair launch means no pre-mine. If you know more and put in more work/risk early, you might gain more. Remember, you also might not!!! It’s not impossible that some geniuses come in really fast and Zorp’s asymmetric advantage totally vanishes. This is a real game, Zorp has risked a lot, investors have risked a lot, and Zorp has been honest about the rules of this game they have constructed. What more can anyone do?

They defined what they meant by fair launch many months ago, and they’ve honored that; they have also said explicitly many times that actual results would be determined by knowledge, skill, risk, and effort (of which they obviously have more than others, at least with respect to Nockchain). So even if someone for some reason is dissatisfied with the terms of this Fair Launch, they defined their terms and they’ve stuck by them. I really don’t see what more they could have done to engineer the fairest possible launch of a Proof of Work chain in 2025.

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Also worth pointing out that there has been reasonable public speculation about details, including on this very forum 0 for months.

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Recent revelations indicate that this project is not what most people following thought it would be. Perhaps insiders made peace with a launch called “fair” but isn’t months or years ago. Most people who don’t have NDAs are learning the reality of the situation now and don’t like it. Telling your community “this is who we’ve always been” when they tell you they’re surprised will earn you no new allies and will likely lose you even more.

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@justin, the analogy to how Bitcoin started is misleading. imagine the following alternative universe:

Satoshi publishes his paper, indicating his intention to launch a proof-of-work blockchain based on it, telling everyone that mining will be an open competition. he even hints at what kind of hardware would be the most efficient, deepening the illusion of fairness. however, this time, he excludes any mention of the SHA-256 hash function from his communications. he goes on to develop two software kits: one for public release, and a private mining software that computes SHA-256 more efficiently that the public one. he privately reaches out to certain entities and sells them licenses to the optimized version. 1.5 years later, he publishes the open-source version, making the choice of SHA-256 public, sends the private version to his customers, and launches Bitcoin shortly after. most miners think they are participating in a fair competition, while Satoshi’s customers started with a higher rate profitability, winning more block rewards with the same hardware and electricity. the optimization of the mining software proceeds on two, unlevel paths: one for those who first had access only to the public release, and another for those who got the private version.

what that is called by today’s standards is an elaborate insider scam. Zorp did this same with Nockchain. it’s elaborate because Zorp can wash their hands, saying that they didn’t mine the chain at genesis using their insider knowledge—right, they just outsourced it to someone else.

early Bitcoin miners had an advantage solely because of their expertise. they all learned about the consensus algorithm and got the source code at the same time. Zorp’s customers have an advantage because the source code was kept secret from the public until 2.5 weeks before genesis.

“slightly”? as in, 2.5 months vs 2.5 weeks? and, remember, Nockchain has been under private development for at least 18 months, during which the development of the proprietary miner could proceed.

show me where the exact proof-of-work puzzle was confirmed before May 3, 2025. that’s the only thing that matters for mining software optimization.

they haven’t been honest. for 1.5 years, I’ve been listening to the constant bragging about a fair launch and how it’s a righteous and revolutionary approach in the age of shady premines. there was also the misleading hint that Zorp’s advantage would be like that of the “early Bitcoin contributors.” instead, the closest thing to the truth so far was communicated only on May 7. did @logan announce in front of the Assembly 2023 audience that “we won’t have a premine, but will sell a closed-source, more efficient mining client to entities of our choice, don’t call us”? was this ever discussed on any of the Nockchats? it wasn’t, but that’s what would have been honest. the problem is not that Zorp is making a profit, but that it was lying about the nature of the game from the very beginning.

the excuse of doing this to “help bootstrap the initial security and proofrate of the network” is hilarious given that, days later, in this Twitter space (4:10–8:34), @logan emphasized how proof-of-work consensus is a permissionless setting, contrasting it with most proof-of-stake setups where aligned parties receive a privilege in sequencing the chain.

one of Zorp’s investors reached out to me, saying they didn’t receive this asymmetric advantage. can you or anyone from Zorp answer the following questions?

  1. how and since when were the “mining partners” made aware of the opportunity to purchase an optimized version of the mining software that takes advantage of the previously private nature of the source code?

  2. who are these mining partners?

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