Disappearing solo miners

[Raulo]

If one looks at the bitcoinwatch pie chart, the "other" part of the pie shrank significantly. Since this calculation from reported hashes and global hashrate is rather inaccurate (e.g., due to changing speed between pools and a "luck factor"), I counted blocks solved by pools during 24 h starting 30 May 20:00 UT.
The whole Bitcoin network found 142 blocks. Individual pools:
deepbit: 55 blocks
slush: 22 blocks
btcmine: 18 blocks
btcguild: 12 blocks
eligius: 5 blocks
swepool: 2 blocks
bitcoins.lc: 0 blocks (unlucky day apparently)
total: 114
other miners and smaller pools: 28 blocks = 20%

I do not have some hard data but I think this is an all time low.

What we can guess from this statistics? Well, apparently with current difficulty the variance with mining solo is rather brutal for small miners. Even a few high-end rigs may be not enough to find a block in a week. And it seems people are rather risk averse. I find it interesting that a lot of people spend quite a lot of money on gambling and unfair lotteries (unfair=with payoff to winners less than ticket revenue). Yet Bitcoin, which is a fair lottery (and better than fair, with extra fees in the blocks), has so few players that want to take  the risk.  

Also, it seems that a notion that mining is rather concentrated is not true. Large miners prefer mining solo (we do not have stats for all pools but for those that publish statistics, largest miners are in teens GH/s max). Those big solo miners are apparently at best 20% of the global hashrate and likely less since there are definitely some hard-core solo miners with small hash rates. Therefore, mining income is rather widely distributed. I think it is rather good for wide adaption of Bitcoin. It is also good for safety and robustness of the network (even though it is concentrated in pools). Recent dynamics is for concentration of mining in pools. If it reverses, this may be a signal of a start of mining concentration.

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[Raize]

It's too bad this post is mostly buried. You're exactly right. It's starting to look like the entire network is going to be mining pools before too long and there is currently a VERY high incentive to be in the biggest mining pool, but also a VERY high incentive to not let that pool pass 50% hashrate. Which means we've basically got a PRECARIOUS PRECIPICE problem.

We don't have an incentive to leave the best mining pool unless it is over 50% of the hashrate, and the best ones start off free or nearly free. If someone who owned both a significant amount (tens of thousands in $X) of BTC and a large enough mining pool that was misreporting its hash rate had the inclination, they could offer to pay us more BTC out than the other mining pools, even going so far as to intentionally inflate the network then use double-spends to pay out to those of us mining with them more than they could have legitimately mined, and they could do this for $X/50 blocks worth of time. I kind of doubt the people who did the mining are going to accept that they have to willingly lose BTC.

[Vladimir]

Raulo very often posts great analytics. This is just another example. Thanks.

[Tukotih]

If a pool grows over 50% we should DDoS the shit out of it.
It's basically our only weapon...

[Genrobo]

If a pool grows over 50% we should DDoS the shit out of it.
It's basically our only weapon...

That's against the spirit of Bitcoin.

Bitcoin is a capitalist market.
He who holds the most riches has the best chance at profit.
He who has the most power has the best chance at profit.

[luffy]

i think tukotih refers to the security issues that a pool with >50% capacity could have to BTC, not that he doesn't agree with bitcoin spirit

[Chucksta]

If a pool grows over 50% we should DDoS the shit out of it.
It's basically our only weapon...

Easy to do, as long as you have the resources...

I think it was last year when I was inviolved in taking down a website run by an extreme islamic element's website. They were gearing up for a mass demonstration in Wooten Basset when the latest dead were returned from the fighting in the middle east.

We, as you say "DDoS the shit out of it". Basically the site was hit sooo many times that nobody could access it. They tried to get another domain up and running, but that too was hit, and made inaccessible.

That site was worth taking down, but no pool is. This could quite easily turn into a "DDoS the shit out of" pools war. We don't want that now, do we ?

[Vladimir]

He who holds the most riches has the best chance at profit.
He who has the most power has the best chance at profit.

Many people, it seems, for some reason think that being in the largest pool and paying largest fees somehow improves their chances. Kudos to deepbit for taxing their ignorance.

[Grinder]

Kudos to deepbit for taxing their ignorance.

You're not too bad yourself. You're selling mining power for about 4% more than it would currently cost to just buy the bitcoins at mtgox, and that's at the current difficulty rate.

[Vladimir]

Both mtgox rate and difficulty change all the time, my rate is more or less constant, sometimes it is more advantageous to buy there sometime here. My customers are the smartest people on this board, do not insult them please.

This is a wrong thread to discuss it. Let's stop here.

[Chucksta]

Kudos to deepbit for taxing their ignorance.

You're not too bad yourself. You're selling mining power for about 4% more than it would currently cost to just buy the bitcoins at mtgox, and that's at the current difficulty rate.

LOL, only just spotted what Vlad is doing... people out there really buy that !

I've got £1100 worth of equipment pulling in 2.5 Ghash/s !!  And that was overspend !

[Cryptoman]

I've been mining solo all along and plan to continue doing so, aside from a handful of CPUs that I don't pay electricity for.  My mining proceeds are running about 108% of theoretical, so I have no reason to join a pool.

[grue]

I've been mining solo all along and plan to continue doing so, aside from a handful of CPUs that I don't pay electricity for.  My mining proceeds are running about 108% of theoretical, so I have no reason to join a pool.

if you pool hop, you can get 28% more

[Raulo]

I've been mining solo all along and plan to continue doing so, aside from a handful of CPUs that I don't pay electricity for.  My mining proceeds are running about 108% of theoretical, so I have no reason to join a pool.

Good for you but for each miners with 108% efficiency, there is one with 92%. But solo mining obviously brings more income on average. You have no pool fees, you collect extra blocks fees and there is usually less downtime. And you have extra fun with unpredictable character of Bitcoin lottery (and some frustration with the same).

The problem with pool concentration is a bit overblown. There is no motivation for pool operators to play dirty. Any potential gain will be overshadowed by loss of reputation. The only problem I can think of is that some rogue player hacks into one of the pool and uses its power to perform >50% attack in order to damage the Bitcoin reputation. This is rather problematic and can be theoretically detected by pool users (and obviously pool operators). >50% attack requires building upon parallel blockchain and not distributing it to the Bitcoin network until after it has grown by more than a few blocks. Therefore, pool users can detect it if they find that there are winning shares (in their logs) that were not subsequently contributed to the Bitcoin network by the pool. It takes some time to build the parallel chain, so even for a 60% total hash entity, and 6 blocks per hour for the whole network, the rogue player advantage is 1.2 blocks per hour (3.6 vs 2.4 blocks). It will take more than 4 hours on average to build a 5 block longer chain (with some luck it can be shorter, though). Anybody that detects such a problem can raise the alarm. Even nonpool users should detect such a bizarre slowdown in the block generation of the main Bitcoin network. There will need to be some automation in this detection but it is possible to do. If such building of parallel blockchain is detected, it is enough for several percent of the "rogue pool" miners to switch to another to stop it.

[innervisi0nn]

If a pool grows over 50% we should DDoS the shit out of it.
It's basically our only weapon...

Isn't the application built so bitcoind doesn't allow a pool to grow higher than 51%?

[finnthecelt]

If a pool grows over 50% we should DDoS the shit out of it.
It's basically our only weapon...

That's against the spirit of Bitcoin.

Bitcoin is a capitalist market.
He who holds the most riches has the best chance at profit.
He who has the most power has the best chance at profit.

Isn't capitalist also democratic? If it would jeopardize the sake of the community for profit, isn't that the current regime we are living under? Just thoughts....

[casascius]

A mining pool that paid zero-variance or on shares could quickly be "DDoSed" out of business simply by a few people modifying their miner to withhold shares that actually meet the difficulty requirement to solve a block, but submit all the shares that do not.  One line of code would do it.  Something I believe others have already mentioned.

[Jaime Frontero]

the only problem with solo mining is the short time between difficulty increases.

right now, i wouldn't solo with 9.9 Gh/s that cost me more than 2,500 USD.  that's how much USD i could reasonably expect to generate during this difficulty level.

in fact, that's my 'rule of thumb':

if i can't solo-generate enough Bitcoin to pay for my hardware during the difficulty level it goes online, i will only mine in a pool.

i was solo mining up until the 127k difficulty level, half-and-half after that one.  now, i'm purely in pools.

you have to be sure you can get your money out while the getting is at its best.

[fpgaminer]

then use double-spends to pay out to those of us mining with them more than they could have legitimately mined, and they could do this for $X/50 blocks worth of time.

The ability to double-spend on the Bitcoin network is a bit of a misnomer, and it sounds like you have gotten the wrong idea because of that. You can only double-spend on the Bitcoin network to the extent that you can temporarily fool two or more Bitcoin clients into accepting transactions that aren't actually valid, because the coins used in those transactions were spent elsewhere. This is only temporary, and eventually all but one of those conflicting transactions will be found invalid.

So, you can't create money with a double-spend attack; only trick people temporarily.

That site was worth taking down

No, it wasn't, and neither is any website "worth taking down." The internet is a means by which all information is allowed to freely flow from one willing entity to the next, no matter how offensive people may deem that information to be.

Many people, it seems, for some reason think that being in the largest pool and paying largest fees somehow improves their chances. Kudos to deepbit for taxing their ignorance.

I don't know what other people's motivations are, but I personally use a pool because it provides a convenient means of knowing that my miners are working, and how much they are earning. With solo mining, how are you supposed to know your miners haven't gone offline? You can set up your own pushpool or mining proxy, but I'd rather spend my free time working on the open source FPGA project.

While we're on the subject, perhaps someone can help me understand one aspect of solo mining I haven't had the chance to personally explore. If your 95% probability solo mining time is >2 weeks, for example, will the difficulty changes ultimately have an adverse effect on your income? Statistics was never my strong suit.

[DarkKnightNomeD]

to Solo Mine at the Moment you need each rig to run 1.5 gig or 2 gigs

at 2 to 3 to 4 machines, your chances of mining a block, thats worth anywhere from 50 coins to 300+ coins increases

its a gamble

with pooling, its cooperation to guarantee to solve a block, then split it xxx many ways between the miners

the endgame bitcoin mining will be pooling because the difficulty will be so high