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 Author Topic: "Why is Pool Hopping a Problem?" - If you use a PROPORTIONAL pool, read this!  (Read 14087 times)
Reikoku
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firstbits: 1kwc1p

 July 01, 2011, 05:20:32 AM

This is a question I get asked relatively often, so I'm going to explain it here and hopefully this can be a useful reference to help people understand two things:

1. Why other people pool hopping is a problem for you (a 24/7 single pool miner).
2. Why proportional pools, not pool hoppers, are the fundamental issue.

First of all, we're going to assume that there is a proportional pool called Pool A, which mines at 90GH/sec without our miner.

Now, we have a miner, let's call him Bob, he runs a 10GH mining operation and he's trying to work out why hopping is an issue. To do this, we're going to make the numbers easy to work with. One block's regular length will be defined as 10 difficulty, which under normal circumstances (zero hopping) will equate to 10 units of time.

So, if Bob statically mines on Pool A, and nobody else is hopping, he should make approximately 5BTC (10% of 50BTC, as he's 10% of the hash rate) every 10 units of time.

0.5 BTC per time unit is Bob's expected yield.

Now let's see what happens to Bob if 50% of the pool hops after 5 time units (this is circa optimal). This means the pool will do the first half of the block at 100GH/sec, and the second half at 50GH/sec. In this scenario, Bob will be 10% of the pool for half of an average block, and 20% of it for the other half.

This means that in the first half he will earn 2.5 BTC, and in the second half, he will earn 5 BTC (20% of 25 BTC). On an average-length block, we can see that Bob is not negatively affected by hopping as the block will take 15 units of time, but he will get 7.5 BTC, still 5 BTC every 10 units.

From here, it's hard to see where the issue with hopping is, but we have to explore different length blocks to better understand the issue. Let's say, as happens in real mining, that instead of all 10 difficulty-unit blocks, we have a 5 unit block, and then a 15 unit block.

Without hopping, Bob will be 10% of the pool for 20 time units, and will make 10 BTC, or 0.5 BTC per time unit.

With hopping, Bob will earn 5 BTC from the 5 difficulty block, as the hoppers won't hop and he'll keep being 10% of the pool for the whole thing, this will be 1 BTC per time unit.

From the second block, he will earn 1.66 BTC from the first third of the block (1/3 of his 5 BTC for the block), and then 3.33 BTC for each of the second difficulty-thirds of the block. This totals out at 8.33 BTC, but this block will have taken 25 units of time to complete.

In case you didn't follow the maths.

First third - 5 difficulty - 100 GH - 1 diff:1 unit time - 5 units time
Second third (after 5 time units) - 5 difficulty - 50 GH - 1 diff:2 unit time - 10 units time
Third third - 5 difficulty - 50GH - 1 diff:2 unit time - 10 units time

This means that he's made 13.33 BTC in a total of 30 units of time for the short block and the long block, which is significantly lower than his expected BTC/time unit yield.

This return is only 0.44 BTC per time unit. This is 12% lower than he'd normally get!

On a longer block, it's even worse returns than this, and deviates even further from his expected yield, but a shorter block doesn't make up for it as the hoppers won't hop on those. Doing the maths for a 25 difficulty block, a 2 difficulty block and a 3 difficulty block, Bob would make 19 BTC in a staggering 50 units of time, which would be more than 20% below his expected 25 BTC.

If there was no hopping, these 3 blocks would have earned him 15 BTC in 30 units of time.

Obviously this is based on a huge proportion (50% of the MH/sec) jumping, which isn't likely right now, but the number of people using hopping techniques is only going to rise, and any loss due to this should be unacceptable to a miner.

But don't complain at other people for screwing you because they're pool hopping. You facilitate them doing it, it's their right to do it, you're screwing yourself. If you offered someone \$10 an hour for a 5 hour shift or \$7 an hour for a 10 hour shift, they'd take the 5 hour shift. This is what the hoppers are doing by maximising their own returns.

The answer is better pools, not calling people out for doing something they have a right to do.

tl;dr: By using a proportional pool 24/7, you may as well be paying a significant (up to 12%) fee.

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figvam
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 July 01, 2011, 08:22:34 AM

Excellent write up, thanks a lot.
OCedHrt
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 July 01, 2011, 10:58:19 AM

If there was no hopping, these 3 blocks would have earned him 15 BTC in 30 units of time.

Agree. Excellent writeup. But I think it would be clearer to also have the comparison with the last 2 blocks without pool hopping - 10 BTC in 20 units of time vs 13.33 in 30 units of time. This is where the 1.67 BTC loss comes from.
Zoomer
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 July 01, 2011, 02:51:42 PM

First of all, we're going to assume that there is a proportional pool called Pool A, which mines at 90MH/sec without our miner.

(Emphasis mine)

Should this be 90GH/sec?
OCedHrt
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 July 01, 2011, 02:54:42 PM

First of all, we're going to assume that there is a proportional pool called Pool A, which mines at 90MH/sec without our miner.

(Emphasis mine)

Should this be 90GH/sec?

It doesn't matter. The numbers were chosen for easy math.
Reikoku
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firstbits: 1kwc1p

 July 01, 2011, 10:28:44 PM

First of all, we're going to assume that there is a proportional pool called Pool A, which mines at 90MH/sec without our miner.

(Emphasis mine)

Should this be 90GH/sec?

Yes, editing, thanks.

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AnnihilaT
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 July 02, 2011, 11:32:56 AM

+1 good explanation!
d.james
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Firstbits: 12pqwk

 July 02, 2011, 05:04:08 PM

It would help if you could list the names of Proportional pools
I'll start:

-Deepbits (proportial payout)
-BTC Guild

That's already like ~60-70% of the total mining power.

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dayfall
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 July 02, 2011, 08:03:29 PM

BitcoinPool is a good pool for hopping.
minor_miner
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 July 02, 2011, 08:41:24 PM

Ok.

I am mining proportional at DeepBit and obvioulsy don't want to get screwed.

What options do I have? Only the "start hopping yourself" one?
AnnihilaT
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 July 02, 2011, 09:02:42 PM

Ok.

I am mining proportional at DeepBit and obvioulsy don't want to get screwed.

What options do I have? Only the "start hopping yourself" one?

Switch pools to one which uses cheat proof scoring and tell your friends to do the same?  You are welcome at Mainframe and 1% k goes back to the community developers and not in my pocket.  Its for a good cause!
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On a more serious note... Im guessing that the pay per share option some other pools offer (including deepbit) would probably eliminate any losses due to pool hoppers or at least be one other option for you.
gentakin
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 July 02, 2011, 09:06:56 PM

What options do I have? Only the "start hopping yourself" one?

That is one option.
The other, much simpler (yet less profitable) option is to switch to a pool with a fair reward system. Eligius comes to mind, and eligius has very low variance as well (that means: steady income).
Slush and BTC Mine are less vulnerable to pool hopping, but they have a higher variance. (That means luck plays a bigger role for you. If you're unlucky, you might earn less than at deepbit. It should average out over longer time periods.)

PPS at deepbit is a really bad idea. It has about 10% less expected income compared solo mining. You probably earn more at proportional deepbit, even with the pool hoppers. Eligius is similiar to PPS, but without the fees.

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minor_miner
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 July 03, 2011, 08:39:55 PM

Switch pools to one which uses cheat proof scoring and tell your friends to do the same?  You are welcome at Mainframe and 1% k goes back to the community developers and not in my pocket.  Its for a good cause!
</shameless_self_promotion>

Just registered, but: Pool Hash Rate   0.000 Ghash/s

What's up with that? As it seems, the pool only has 4 members (including me), but no one is mining? heh

Also, where do I see how many fees I've got to pay or if there are fees on payouts?

What options do I have? Only the "start hopping yourself" one?

That is one option.
But this would mean I would have to watch my miners and hop accordingly 24/7?

Or are there some kind of programs for that?

The other, much simpler (yet less profitable) option is to switch to a pool with a fair reward system. Eligius comes to mind, and eligius has very low variance as well (that means: steady income).

I've read that a lot of people are happy with eligius, so I might give that one a try. Thanks for the replies so far
AnnihilaT
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 July 03, 2011, 10:41:41 PM

Quote
Just registered, but: Pool Hash Rate   0.000 Ghash/s

What's up with that? As it seems, the pool only has 4 members (including me), but no one is mining? heh

Also, where do I see how many fees I've got to pay or if there are fees on payouts?

Yeah, thats true.  Its a brand new pool and only been up for a couple days.   Im not mining myself right now because im running some tests on my testnet setup to add in some new features.

There are no tx fees on threshold payments and .0005 on manual payment (for now).   I will probably remove all fees soon and absorb these myself.

Cheers!
Luke-Jr
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 July 03, 2011, 10:47:59 PM

Eligius is PPS-like (SMPPS) with almost no fee (it works out to less than 0.0001%). We've been having some trouble lately, and stats will probably be down for at least another 16 hours, but it's a good choice when it's working.

dayfall
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 July 04, 2011, 12:42:18 AM

But this would mean I would have to watch my miners and hop accordingly 24/7?

Or are there some kind of programs for that?

It is quite trivial to write a python script that watches the web pages for you and then starts and stops your miners.  Deepbit has a 1 hour delay so you would have to get the information elsewhere.
Reikoku
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firstbits: 1kwc1p

 July 04, 2011, 10:49:27 AM

Hopping yourself is an option if you're willing to write a script, otherwise I can suggest joining a PPS/Score pool.

Slush & Eligius are good examples of non-proportional pools.

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minor_miner
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 July 04, 2011, 01:34:08 PM

When does eligius pay out, though? After every Block?

And @hopping:
I think it won't be worth the effort for me, since I'm just running my single 6870 anyways.

Might look into that when I have more time to read myself into Python (never used, except for oblivion mods), but until then, mining won't be profitable any more I guess
jwzguy
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 July 04, 2011, 02:13:53 PM

Deepbit delays all their block stats for an hour. Probably to mitigate this situation. So with only one large proportional pool, you can't do much hopping.

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Sukrim
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 July 04, 2011, 02:47:23 PM

Btcguild is also proportional the last time I checked... as are many many many of the smaller pools.

Delay of stats is not that much of an issue actually.

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