SOLO MINING = LOTTERY (in contrast to the more regulated pooled mining)

[xali]

If I solo mine, and it just happens to randomly find a block chain that is valid (or however mining works lol) then that means I GET 50 BITCOINS.

Every single computation has a possibility to be valid meaning that every time the mining program computes a hash there's a small possibility that you could get 50 btc right?

And the higher the hash rate or whatever means more computations per second meaning there's a higher chance you could get the 50.

However in pooled mining everyone has a chance of getting 50 but that 50 gets divided between all the members depending on how many calculations they did compared to the total amount of calculations to get that 50 btc.


Am I right?

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[chihlidog]

That's the way I understand it, yes. But I'm a n00b so I hope to see an expert answer this.

[Bth8]

Yep. If you want, you can find the exact numbers for calculating the probabilities on the wiki.

[bitlotto]

Imagine a giant pile of coins. Everyone is looking for one coin with a certain date. Mining pools have big diggers, trucks, and sorting machines. The solo miner with an old computer is looking at each coin by hand. Sure the lowly solo miner with the old computer could find it but I'd bet on the other guys!  If you've got a pretty decent setup then you have got the big machines too like the pools!

[xali]

um i made a poll with the same thread title accidentally and i cant edit it and now its fully locked for some reason O_o

[BitCoinsForGold]

Unless u have a very high hash rate, the chances of you hitting a block for 50 coins is pretty low at this point

[btcminer]

If I solo mine, and it just happens to randomly find a block chain that is valid (or however mining works lol) then that means I GET 50 BITCOINS.

Every single computation has a possibility to be valid meaning that every time the mining program computes a hash there's a small possibility that you could get 50 btc right?

And the higher the hash rate or whatever means more computations per second meaning there's a higher chance you could get the 50.

However in pooled mining everyone has a chance of getting 50 but that 50 gets divided between all the members depending on how many calculations they did compared to the total amount of calculations to get that 50 btc.


Am I right?

Yes that sounds about correct. However almost all pools charge a fee, so you'd usually be getting your share of 49 or 48.5 coins. Different pools use a different scoring system, but the most common system works by how much 'work' you contributed to that particular prize block.

You should know whether you're solo mining or not, you're still 'playing the lottery.' The difference is in pool mining, the 'pool' plays the lottery.

But just like the real lottery, if you can imagine joining a lottery pool with 1,000,000 tickets, the chance of the pool winning every time a lottery is held is a lot higher. So you'd get a pay out more frequent, smaller payout.

Pool mining is actually way more like joining a 'lottery ticket buying group' where hundreds of lotteries and lottery pools are held a day. You only get money if you contributed to one of the tickets, and your share usually depends on your contribution.

Some pools have a payment method called Pay Per Share, and charge a much higher fee for it. How this works, as in the above scenario, you could still get unlucky and contribute to a bunch of tickets that did not win. You'd still end up with nothing. So pools tried to solve this by creating something called 'pay per share' which means they will pay you a certain amount per every ticket you contribute to, regardless of whether it wins or not.

[xali]

OOOOOOOOOOOOOOHHHHHHHHH I get it. It's a lottery no matter what. wait now i don't get it at all.


I thought all pools work on pay per share. which isn't like a lottery.


I don't get the lottery pool pay out method thing.... you say the share you get depends on your contribution, ie how many tickets you bought. but you can say the same thing about pay per share... what exactly is the difference...?!?

[Samantha2011]

Yes, you're right. And it's actually more profitable to solo mine in the long run.

But if you'd like to actually see some coin income soon, you might like to try pool mining.

[sakkaku]

I thought all pools work on pay per share. which isn't like a lottery.

Most pools are porportional.  If you submit 500 "shares" (shares are results you submit that might be a valid solution) and the pool has 1000 total you will get a 50% cut of the payout.

[sakkaku]

And it's actually more profitable to solo mine in the long run.

That depends really.  It might take you 10 years to solve a block because you have the worst luck possible.  While in that time you might get 60BTC from a pool.

[xali]

I thought all pools work on pay per share. which isn't like a lottery.

Most pools are porportional.  If you submit 500 "shares" (shares are results you submit that might be a valid solution) and the pool has 1000 total you will get a 50% cut of the payout.

now say the same exact thing, except its pay per share... how would it be different?

[sakkaku]

now say the same exact thing, except its pay per share... how would it be different?

Pay per share awards you a fixed amount per share you submit.  This is determined by the pool based on the average number of shares needed to solve a block minus overhead (I think deepbit pulls out like 5-10%, haven't looked in awhile).  The advantage of a PPS model is you get a very stable income.

[xali]

Pay per share awards you a fixed amount per share you submit.  This is determined by the pool based on the average number of shares needed to solve a block minus overhead (I think deepbit pulls out like 5-10%, haven't looked in awhile).  The advantage of a PPS model is you get a very stable income.

so if I had 500 shares and the total was 1000....then?!? cuz i still dont get it

[sakkaku]

Pay per share awards you a fixed amount per share you submit.  This is determined by the pool based on the average number of shares needed to solve a block minus overhead (I think deepbit pulls out like 5-10%, haven't looked in awhile).  The advantage of a PPS model is you get a very stable income.

so if I had 500 shares and the total was 1000....then?!? cuz i still dont get it

It wouldn't matter what other people did.  In pay per share you make a fixed amount.

For instance deepbit pays out 0.00005129803015564 per share now.  If you submit 500 you will make:

Code:

500 * 0.00005129803015564 = 0.0256490151

It is independent of what the rest of the pool is doing.  In that same amount of time the pool may have solved 2 blocks and with porportional you would have made twice as much BTC or the pool may have solved none.

[xali]

confusing stuff

I still do not understand. I think im even more confused..... okay let me try to summarize for my self

in pay per share, okay well first of all a whats a share O_o?!?!? well what ever
in pay per share, you get a fixed amount of bitcoins regardless of whats going on in the rest of the pool. however the amount you get is determined by the difficulty..


but in normal payout, you get ... man idk

[Adam]

Solo mining would be rough.  According to my deepbit account: "Number of blocks found by you: 0"

[sakkaku]

in pay per share, okay well first of all a whats a share O_o?!?!? well what ever

A share is a result your miner submits for its given work.  Usually the pool will accept results at a difficulty of "1" (which is the easiest).  From there the pool submits the result to the bitcoin client and it may or may not generate the block (there are extra checks to reduce the overhead but whatever).  If the result is accepted the round is finalized and everyones new balances are realized based on their shares.

in pay per share, you get a fixed amount of bitcoins regardless of whats going on in the rest of the pool. however the amount you get is determined by the difficulty..


but in normal payout, you get ... man idk

In porportional payout you get a % based on your number of shares over what the overall pool has submitted.  So if you generate 1% of the shares you will get around .5 BTC ( .01 * 50 ).  Or if you generated 500 / 1000 you would get 25 BTC.

[n0ne]

Solo doesn't seem to be worth it. Even with a buttload of hash/s to your name, you seem to have less chance making money. I'll stick with bitcoin.cz me thinks. 

[rolls]

Unless you have a massive hash rate you are still better off mining for a group, because if you don't mine for long enough you might never find a reward and hence you'll get $0, where as mining for a group you are guaranteed your pay.