Removal of PPS
The Pay-per-Share method is being removed from BTC Guild over the next 12 to 24 hours. For users who are not aware, the PPS method means the pool actively loses money during bad luck, with the assumption that the long run will make the pool significantly more. This has been the case since inception, but there is another risk associated with PPS in the form of the hot wallet. Pools keep a hot wallet balance which is used to pay miners when they request payouts.
Due to PPS being unrelated to blocks being solved, a PPS pool is required to keep the hot wallet balance significantly higher than a non-PPS pool. This means the risk of an attack on the pool draining the hot wallet is significantly greater. With the value of Bitcoins these days, paired with the shrinking of pools as larger private farms coming online, the variance of PPS (on the pool side) has become too significant for BTC Guild to continue offering it with the added risks it requires.
PPLNS is a better deal for miners in the long run. Even with the bad luck the pool has had the last few weeks, the pool is still positive on luck for the last 3 months. Mining on BTC Guild has produced better than 0% PPS equivalent payments for the last 3 months when factoring in orphaned block payouts, transaction fees, and Namecoins. Miners make more money, and the pool is able to operate without losing money when luck is bad, and without having to keep as many coins at risk should an attack ever be successful against the pool.
March 15, 2014
For your interests: It looks like BTC Guild now has dropped the PPS-method as a reaction to the bad pool luck over the last days.
Greetings Steve
