Exponential decrease in the number of nodes

Before the last update was implemented, I warned about the possible consequences that this update would cause.

I remember seeing 130,000 nodes or more, but in less than 15 days, almost 40% to 45% of all nodes were shut down.

As a result, the network is becoming increasingly centralized in the hands of the big miners … Currently I have 400 nodes, all paid for by me, but I am very concerned about the small miners and the beginning miners.

I ask the NKN team if this security breach will soon be resolved in another way, because if the node generation rate continues, the number of nodes will drop dramatically within a few months.

Remember that the NKN network is made by miners, you cannot in any way cause problems for miners, whether they are beginners or experienced.

The first update that caused a problem for miners, caused the loss of about 40% to 45% of the entire network, I think it is very important for you to be aware of this very expressive percentage.

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I think you have a point, but you are exaggerate your numbers. At the highest point, we probably have a bit over 110K active nodes, not 130K nodes.

Also we are still in the middle of migration to the latest v2.1.2 software, thus some nodes are not yet back online yet.

In any case, as a miner, wouldn’t you be happier if your mining rewards is more due to less nodes? What is your true motivation to keep nodes grow uncontrollably? Because if that happens, and NKN token price remain the same, it only means nobody can be profitable to run nodes. Does that actually help the small miners you claim you want to protect?

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Hi !

I kinda share @brounk9x concerns.

There’s 2 pov here, the first one, as you said @zbruceli, as a miner, I’m of course happy to see less nodes so more chances for my nodes to be rewarded and my activity to be profitable …

But I found that view a little short term?

If I invest in NKN as a miner it’s also because I believe that NKN could solve a “real world” issue : centralization.
If the amount of nodes keeps on going down with a few miners having a majority of the nodes where is decentralization ? If you look at the actual numbers, there’s approx 500 unique wallets rewarded per day where there’s nearly 4k rewards available per day …

I know that some nodes have still to give their reward to the nknx team so will appears later but all those factors combined raise some concerns on my side …

So my question is : what is your plan to avoid this centralization and incentive more new miners to join the network?

Thank for you answer!

Interesting discussion, I would like to offer an alternative point of view as well as my own insights.

The number of nodes going down a little bit doesn’t concern me much really. I am a small miner and only run one node, this means I will have a greater chance at rewards.

Since we can’t for sure say which nodes left the network, it seems strange to assume which ones left.
Could it have been small miners such as me because they weren’t getting much rewards? Possibly.
But I don’t think the small miners have an expectation of getting rich, they just contribute to the network because they are interested in the project.
I have seen people claim to operate thousands of nodes, this has a heavy cost per day and if the ROI isn’t high enough, it would make sense they would shut their nodes down.
My suspicion is that is where the majority of the nodes went, people invested in high cost cloud nodes, which is centralized to a certain degree, and it didn’t pan out for what they were expecting.

I got involved in the project because I read a news story and thought the project looked interesting. High visibility press attracts various people with different intentions.

It seems this press also attracted nefarious actors as well. Thus in an effort to mitigate, the development team had to do something and adding a small barrier to entry makes a lot of sense.

First, it lowers new nodes, since you can’t just add them at a whim, there is a small cost involved with node creation. That is probably the best up front way to keep those who mean the network harm away.

Secondly, since the node pool isn’t growing with a lot of new nodes and wallets, it becomes easier to isolate and identify the problems.

I estimate once these issues are resolved, the node generation fee will be changed in some way if not removed entirely.

The security of the network is important to me as a node operator who wants to see the network grow and succeed in the future. We are still in the beginning here and the last thing the developers want to do is harm the community.
Think about it from their point of view.
What would you do if you were in a position to make changes?

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Hi @Rfspades

thank for your contribution! Really interesting :slight_smile:

I totally agree on your point about the security, if the generation fee is required to protect the network against nefarious actor, generation fee it is and there’s nothing to say against it. My concern is more about the centralization of the nodes in the hands of a few instead of thousands. The generation fee in a way doesn’t solve this issue as the one having multiple nodes running generate enough rewards to keep on deploy new nodes when new comers have (for now) quiet some barriers to join …

I really don’t know any magical solution to keep at the same time a secure network AND low the entry barrier for new nodes to join the network, it’s clearly a complicated equation to handle but I would love to be sure the team will come up with a solution in order to allow the network to grow in a de-centralized way.

Define the future isn’t easy :slight_smile:

I do agree with you @TheAL

The high number of nodes run on cloud services is disconcerting to me personally, but it does seem necessary at this point in time. The team seems to be learning about the exploits people have been using in the past to gain undue mining rewards. I like this a lot.

Yes, it’s true that those with many nodes will have more rewards and be able to open new nodes much easier than a brand new entrant. There is a point of diminishing returns, i feel, when you would reach a certain number of nodes. Since you pay a fee for each new node you set up in a virtual cloud environment. Plus, theoretically for each new node on the network the return on that node would be less.

It’s an interesting experiment to watch what transpires as far as the profitability of cloud mining as a business venture.

The team has said they are looking into a faucet program to get small node operators past the barrier to entry, but verifying an actual new node operator will be difficult. Perhaps some sort of location based, per account review would be useful?

Long term, I can see the benefits being weighted heavily toward the small miners. This alone will attract people as the word gets out about this project. Every day new people get into crypto and realize it’s a community of different projects looking to change the world. It’s so much more than just trading on coinbase.

Look at the advantages for small time miners such as me. I already have the equipment, so I incur no cost of running a machine that is already on anyway. I pay for internet, and the bandwidth doesn’t get fully used. I already pay for it, why not use it? There is next to no cost at all for operating a node on a small scale, provided you already have the equipment.

Plus, you have a chance to get some crypto rewards for helping out!

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Regarding how can we balance centralized (cloud, mining pool) versus decentralized:

  1. I believe both are important. cloud based nodes offer higher bandwidth and lower latency, and higher availability, which are important for some applications. home/private nodes offer lower cost, proximity to more users, and decentralization.
  2. The balance of the two will evolve over time due to a few factors: convenience, scalability, cost, traffic patter of applications running on top of NKN, different pricing model for different services running on top of NKN.
  3. Today the NKN network is more centralized, in terms of node location and ownership. But we do see it will change over time, and we have some early data points from our experience in running nCDN video delivery for iQiYi. Cloud servers are just too expensive for high bandwidth applications.

What NKN is doing to enabled decentralization

  • We are working with community developers for faucet function, to support new small independent miners to test out NKN and run their first node by paying their 10 NKN fee.
  • We are making products like nConnect that will add additional income to miners.
  • We are supporting 3rd party companies that will further utilize NKN bandwidth and pay miners additional income.
  • We are giving bounties to entrepreneurs who can build all-in-one NKN home mining machines with simplicity of smartphone app management. In addition, we are giving bounties to enable existing mining machines (e.g. Chia, Helium) to run NKN node at the same time. Then it will enable everyone who can install a home WiFi router to run a NKN node at home.

It is indeed a very exciting social-economical experiment that we are all the first person witness, and I thank you all for your enthusiasm and constructive feedbacks.