Bitcoin Forum

As i am doing with friends, if 10-20 people invested 5k each, paying for the mining rig, you would all break even in 3-4 months and all the monies after would be profit...

so why are we not working as a collective??

lets all get rich!!

Is this pretty much what all mining pools are?

the rewards are higher.

as all GPUS will work together in your own mining pool therefore the profits are split evenly between 10-20 people only and no more.

maybe im wrong, maybe its less people + more investment = high profit.

how big are these "physically"

Have you actually gone through realistic calculations, or does it just seem to you that a collective should lead to riches somehow?

Can you provide specific calculations for this? What cards are being used, hashrate, power consumption, etc.

Mining in a "collective" as the OP suggests would, at best, yield a few percent more profit compared to mining in a standard pool. Since pooled mining produces only modest returns at best, there is no way anyone is going to get rich by following the OP's suggestion. My guess is that the OP doesn't really understand the economics of mining, and hasn't done realistic calculations. Basically the OP has just made an off the cuff remark that has no basis in reality.

+1

All you would get extra are the block fees, which are next to nothing (circa 0.01%). Even if you were pushing double to triple digit Ghash/second they are still relatively nothing (at the moment) In a few dozen years the fees MAY be more than the block generation value.
e.g.
Generation: 50 + 0.0178 total fees
Generation: 50 + 0.0015 total fees
Generation: 50 + 0.0235 total fees
Generation: 50 + 0.0045 total fees

That really depends on the pool; Eligius pays everything. Maybe OP doesn't know about pooled mining?

True, but the current block generation fees it really makes no odds whether a pool shares them with the miners or keeps them. I do agree that every little bit helps, but at about 0.01% that is still only 1 extra Bitcoin for every 100ish blocks generated.

I suspect that the Original Poster does not fully understand how mining works.
(took me a second to work out what OP stood for)

Maybe an example would help.
At current difficulty of 1777774.482
@ 1Ghash/second (solo mining) you would probably find a block once every 88 days, 8 hours, 59 minutes (on average)
@ 10Ghash/second (solo mining)  you would probably find a block once every 8 days, 20 hours, 5 minutes (on average)
@ 100Ghash/second (solo mining) you would probably find a block once every 21 hours, 12 minutes (on average)

Note the magical words above "average" and "probably". Lets take the 10Ghash/second rate of searching for a nonce to generate blocks.
So the average is 8 days, 20 hours, 5 minutes, but this is all statistics so you will have a 50% chance of finding the nonce to solve the block after 6 days, 3 hours, 0 minutes, and a 95% chance of solving a block after 26 days, 11 hours, 23 minutes. It is all down to luck and statistics. The reason why almost everyone joins a pool these days is because a pool smooths out the rough patches. Solo mining you could be really unlucky and the first few blocks you find will take 26+ days each to find, or you could be dating lady luck and the first few blocks take less than a day each to find.

On average at 10Ghash/second (at current difficulty) you will in the long term find blocks at the average rate of one block every 8 days, 20 hours, 5 minutes.

Joining a pool increasing the hashing power so the pool will find blocks faster, but not faster than the combined rate of all it's miners. If the pool consisted of 3 miners one at 1Gh/sec, one at 100Gh/sec and you at 10Gh/sec the combined rate (at the current difficulty of  1777774.482) of 111Gh/sec would one average generate a new block every 19 hours, 6 minutes.

But statistics are still at play so there is a 50% change of find a block after only 13 hours, 14 minutes and a 95% chance of finding a block after 2 days, 9 hours, 14 minutes.

There is no magic involved you mining at 10Gh/sec will still end up with, on average, 50 BTC after 8 days, 20 hours, 5 minutes.
The pool in total, on average, should have mined 555 BTC after 8 days, 20 hours, 5 minutes.
500 going to the 100Gh/sec miner (10 times more hashing power than you).
50 going to you mining at 10Gh/sec and
5 going to the 10Gh/sec miner. (10 times less hashing power than you).

There are only two ways for the amount of bitcoins you receive to increase. One is for you to add more hashing power, the other is for the difficulty to decrease. It has been trickling down over the last few difficulty re-evaluations. And it is predicted to decrease at the next difficulty adjustment in 94 blocks time to about 1750233. But that is not going to increase your possible income by any significant amount.

Pool mining, solo mining or a group of friends buying hardware will not increase your average generated BTC's, It is purely based on your hashing power and the difficulty. The difficulty is adjusted up/down every 2016 blocks generated, circa every two weeks, to match available hashing power to try and keep the new block generation rate on average once every 10 minutes. So as more hashing power joins the Bitcoin network the difficulty increases, and if hashing power leaves the difficulty will be reduced.

This takes a lot of trust. Maybe move next to each other and start this up? I'd be up for it.

Please read the two lines in green on my last post.

If one person spends 5K on mining equipment, or 20 people together spend 5K each on mining equipment, they will not magically get extra Bitcoins from nowhere.

So if one person spends 5K on equipment and joins a pool, any pool, they will get almost the exact same number of BTC's as joining up with 20+ other friends. Maybe 0.01% less (if the pool keeps the block generation fees) and maybe a percent or two less if the pool charges for their bandwidth costs and server(s) rental/purchases. But the same extra, hidden, costs if not more would exist for 20 people mining together.