Pool Capacity Qustion

[BitcoinJacob]

I am new to crypotocurrency mining and I recently had an experience that I would like to ask about.

I short-term leased 100MH/s Scrypt hashing capacity and pointed it at a certain pool. I noticed the pool total was about 1.5GH/s at that time.

I watched it for 6-8 hours and I was making about a 30% profit over my costs. In that time I spent about 0.002BTC and had a balance on the pool of about 0.0025. So, convinced, I increased my hashrate to about 1GH/s and left it alone for several hours. After the increase I spent another 0.008BTC but my total earnings (for both timeframes) was only abut 0.0055BTC.

So after my increase I was a large portion of the pool's hashpower (about 40%). Does a pool reach a point of saturation where additional hashpower has no benefit?

I know that there can be diminishing returns on coin networks, but it would seem to me that I can't possibly have been a large portion of the worldwide Scrypt capacity, even though I was a large portion of the pool

Thanks,
Jacob

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[merelcoin]

It might just have been that the pool got lucky the first time you tried, and hit a couple of blocks the first time, and the second time (when you bought a lot more hashpower) they got unlucky and hit less blocks.

Mining is all about longterm averages, especially on older, well-established coins and pools.

[BitcoinJacob]

It might just have been that the pool got lucky the first time you tried, and hit a couple of blocks the first time, and the second time (when you bought a lot more hashpower) they got unlucky and hit less blocks.

Mining is all about longterm averages, especially on older, well-established coins and pools.

Thank you for your answer. I was wondering if anyone would respond.

--Jacob

[merelcoin]

It might just have been that the pool got lucky the first time you tried, and hit a couple of blocks the first time, and the second time (when you bought a lot more hashpower) they got unlucky and hit less blocks.

Mining is all about longterm averages, especially on older, well-established coins and pools.

Thank you for your answer. I was wondering if anyone would respond.

--Jacob

This subforum is a bit quiter than the rest of bitcointalk

Anyway, as a general rule, be carefull when buying hashrate online. There are honest companies that sell hashrate, but try to imagine the following imaginary situation:

---BEGIN IMAGINARY SITUATION---

You are the proud owner of 11 Alchemist 96Mhs ASICs, producing about 1000 Mh (= 1Gh/s scrypt).
https://bitcointalk.org/index.php?topic=1206400.0 teaches us that this beast theoretically consumes 900W, so let's take 10Kwu power consumption per hour for our 11 miners producing 1 Gh/s.

Since you have a mining farm, i guess you're in a country with very good electricity rates, or you have a really good deal, so you only pay 4 cents/Kwu

I used coinwarz to see what you would make running this farm:
http://www.coinwarz.com/miningprofitability/litecoin/?hr=1000000&p=10000.00&pc=0.04&hrn=300.00&pn=420.00&pcn=0.1000&e=CEX.io
You would make $37/day, after your electricity costs you could keep $28/day. Offcourse, you still had to make the investment of buying 11 alcheminers, cooling, electricity, a controller, network switches, shelves,... and it'll take you at least an hour a day maintaining everything.

Now my question: knowing that you'll only make $37 a day, would you EVER rent out this gear for less than $37... Offcourse you wouldn't... If you would rent out this equipment, you would ask at least $40/day.

When I would rent out your machines, and pay $40/day, you would already know that, on average, i could only make $37/day, so i would lose $3/day renting out your machines (on average).

---END IMAGINARY SITUATION---

Now, does this mean you cannot make a profit renting out hashrate? Sure you can, but only if you find a seller who doesn't really care about following the difficulty of scrypt coins, or maybe if you could instamine a new coin, or maybe if you're really, really lucky with solomining. But in general, on average, you'll lose money with renting out hashrate.

Oh yeah, also, be very carefull with cloud mining companies... Those ones are usually a scam. Stick with the well known P2P hashrate renting sites. I personally had some good experience with miningrigrentals in the past (about 1.5 years ago, i used to sell some hashrate via them, i stopped doing it since, because my power price rose to much).

[BitcoinJacob]

Thank you, I definitely take your point.

But is mining consistent enough where you know for sure that you will make (in your scenario) $37 per day, or is it $30 some days and $45 other days?

If so, might you be willing to lease it for $36.50 to guarantee predictability?

--Jacob

[Za1n]

Thank you, I definitely take your point.

But is mining consistent enough where you know for sure that you will make (in your scenario) $37 per day, or is it $30 some days and $45 other days?

If so, might you be willing to lease it for $36.50 to guarantee predictability?

--Jacob

Mining is anything but consistent. Count on it varying wildly as your second example, $30 profit some days, $45 other days with an even greater degree of volatility than this. This is not only influenced by the price, but the moving of hash-rate to more profitable coins. When wearing your mining hat, you are also forced to wear one of a speculator as well, as some days the profitability of a given coin may be low but the hash-rate also fell off. So you may want to mine that particular coin in the hopes that the price recovers somewhat in the future. This means at times you may need to mine and hold versus realizing immediate profit and is always risky.

[crunck]

I am new to crypotocurrency mining and I recently had an experience that I would like to ask about.

I short-term leased 100MH/s Scrypt hashing capacity and pointed it at a certain pool. I noticed the pool total was about 1.5GH/s at that time.

I watched it for 6-8 hours and I was making about a 30% profit over my costs. In that time I spent about 0.002BTC and had a balance on the pool of about 0.0025. So, convinced, I increased my hashrate to about 1GH/s and left it alone for several hours. After the increase I spent another 0.008BTC but my total earnings (for both timeframes) was only abut 0.0055BTC.

So after my increase I was a large portion of the pool's hashpower (about 40%). Does a pool reach a point of saturation where additional hashpower has no benefit?

I know that there can be diminishing returns on coin networks, but it would seem to me that I can't possibly have been a large portion of the worldwide Scrypt capacity, even though I was a large portion of the pool

Thanks,
Jacob

You have any number of things going against you in that scenario, the first issue that could have occurred is the "difficulty" if you were making 30% @100MH/s I would say you were right on the money, but when you jumped from the 100MH/s to 1.5GH/s (which is a pretty big jump if the net hash was not massive and i guess it wasnt to have given you the 30%) the difficulty would have gone up also and i suspect ot went up so fast you hit quite a high difficulty number that then took a long time to reach and the difficulty lower ------ That is probably what happened.

An example is I quite often mine Lea as it returns a profit quite often, but you need to take a few things onto consideration ie diff, nethash, poolhash and of coarse price, now if i mine Lea with about 1TH/s I make on average around 25% on my expenses, yet if I mine it with around 5TH/s I break even and anything above I lose and its all down to me jacking up the difficulty too fast then taking ages to get the share and dropping it again.

If you are going to go from 100MH/S to 1.5GH/s do it very slowly and not just hit the coin with such a large increase because the coin will all ways set the difficulty above what the 1.5GH/s is supposed to be because it will presume the miner hash is still increasing. most coins are on a 10min or so retarget so it will take that amount of time for the coin to realise that 1.5GH/s is as far as you are going.

So in short slowly slowly is the way to go, and get it out of your head that more hash = more BTC because it dosnt, blocks are found at time intervals and devs set this n the code for example:

unsigned int nTargetSpacing = 10 * 60; // Some Shit Coin

That coin is set to give out a block every 10 minutes regardless of what hash rate is on there.

Hope that helps a little

[BitcoinJacob]

So in short slowly slowly is the way to go, and get it out of your head that more hash = more BTC because it dosnt, blocks are found at time intervals and devs set this n the code for example:

unsigned int nTargetSpacing = 10 * 60; // Some Shit Coin

That coin is set to give out a block every 10 minutes regardless of what hash rate is on there.

Hope that helps a little

It does help a little.

I get that network wite there is only one block every 10 minutes. But, if I increase my personal hashrate shouldn't I (statistically speaking) get a higher portion of the network's earnings? Otherwise, why would anyone contribute more than a trivial amount of hash?

So if spending more doesn't increase earnings then why would anyone mine? I mean getting 25% is great, but if you can only do that on $2 per day then its still only 50 cents.

--Jacob

[crunck]

So in short slowly slowly is the way to go, and get it out of your head that more hash = more BTC because it dosnt, blocks are found at time intervals and devs set this n the code for example:

unsigned int nTargetSpacing = 10 * 60; // Some Shit Coin

That coin is set to give out a block every 10 minutes regardless of what hash rate is on there.

Hope that helps a little

It does help a little.

I get that network wite there is only one block every 10 minutes. But, if I increase my personal hashrate shouldn't I (statistically speaking) get a higher portion of the network's earnings? Otherwise, why would anyone contribute more than a trivial amount of hash?

So if spending more doesn't increase earnings then why would anyone mine? I mean getting 25% is great, but if you can only do that on $2 per day then its still only 50 cents.

--Jacob

Yes you are right in some respect and if your on a large pool then yes the larger amount of hash your provide the bigger slice of the block you get but its still all relative to the difficulty as the more power you send the pool the more the difficulty rises which then means you have to spend more to get more power to get to the new difficulty.

Here is an example of how i fucked up last night, now you have to bear in mind i have my own pool so only me mining this particular coin.

I put 11TH/s of rented hash on titcoin and got 85 blocks in a 3hr window, now I lost BTC on that and the reason is I needed less than half the 11TH/s to get the same block number results, in fact right now I am mining it again @3TH/s and getting the same amount of blocks at the same time intervals I did with the 11TH/s but this time i have cut my costs by 3/4 and am now in profit.

I also take on board what you say about LEA only making $2  but multiply that by a full day and then multiply again by in my case around 25 different coins doing the same thing and it makes some decent beer tokens for the weekend

The TIT coin is almost an exact copy of your issue, I threw too much hash at it

Crunck

[kurbeks]

most of the time it's just better to buy and keep bitcoins. Unless you are lucky or know what you are doing.