Mining 101 and beyond...
It seems that I often get asked the same questions over time so I thought it would be a good idea to post some information that many of you might find helpful. My data come from my experience as a miner, pool owner and miner myself and having spent hundreds if not thousands of hours developing
https://smarterhash.comMy comments are primarily related to scrypt coins but nearly all coins share the same features/limitations.
First off there are always exceptions to what I am posting but they are uncommon since most coins follow the same rules in terms of difficulty adjustments and block generation times. So no matter what I assert is that someone could always find an exception if they look hard enough, but for the majority of time my recommendations and assertions hold true.
1. More hashing power does not mean you will make more money - most of the time it's just an opportunity to waste more hashing power. Which in effect is great for the people who know where to NOT waste their hashing power because it means less competition for them.
2. Don't be a lemming and flock to what's HOT - chances are everyone else is flocking there too an you're wasting hashing power by fighting over coins. - be smart, don't always follow the crowd.
3. Looks for opportunities in coins that get deserted network hash wise when the lemmings flock to the 'hot coins'.
If you choose the wrong coin to mine you'll waste a lot of hash.
For instance - let's say you have 1 GH/s of mining power and decide to mine EAC. As of the time of this writing EAC was generating $210 in coins per day.
You do understand that coins are not bottomless pits of block generators - right?
Each coin only produces N blocks per day and each block carries a block reward and when you multiply those out times the current coin value that adds up to a BTC amount which equates for a dollar value.
so... as of this writing - EAC's Network Hash is 2.381 GH/s and if you started mining with your 1 GH/s - total network hash would be 3.381 and your 1 Gh/s would account for 29.5% and that would give you 29.5% of the coins daily yield which totals $210 so your percent would be $61.95.
compared to other coins (as of the time of this post) this is not a good investment of your hashing power.
which is why I developed SmarterHash - to let people know what's the best coin to min for profit.
but let's go back to selecting a coin.
On my website I see that currently NOTE (Dnotes) is a better investment for 1 GH/s of mining power.
why?
Current Network Hash for NOTE is 6.4 GH/s and if I added my own 1 GH/s to this coin the total network hash for NOTE would be 7.4 GH/s and my percent would be: 13.5% BUT NOTE is currently generating $544/per day in coins and 13.5 % of $544 = $73.44 which is what you would make IF NOTHING CHANGED - i.e - blocks per day, coin value and network hash - whcih is why we generates charts and show averages for all for the variable that can affect a coins profitability - so you can make an informed decision.
Of course there are actually 8 other coins that are paying much better than EAC and one in fact is paying $122/day for 1 GH/s and just as an FYI - LTC would pay $91/day based on 1 GH/s and Smarterhash members know which ones they are.
more information to follow in other posts but remember this.
Since every coins has a fixed daily yield - every single MH/s you add to a pool or the network hash of a coin when mining dilutes the profitabilty of all current MH/s already on that coin -including you own!
And remember this - profitability "the majority of time" varies by the amount of hashing power you have. I.E. - if I had used 25 MH/s as your mining power in this example an entirely different set of coins would have show up as most profitable with Hashpay being 8th on the list and Mooncoin being 9th on the list profitability wise an the #1 coin on this list yielding 0.00116000 BTC/MH/Day based on 25 MH/s of mining power.
