Megacoin Post-Halving Rut

[bholzer]

I apologize in advance for posting here -- obviously this isn't a very efficient section for this. Although I've been involved in the scene for years, I just recently registered here, so I can't post anywhere relevant. I know plenty of people in the Megacoin community, in addition to casual holders and/or multipool miners, are in a similar position as me. I'd appreciate it if somebody could link to this post from the main Megacoin thread.

Since Megacoin halved early yesterday (250 -> 125 coins / block), there has been a massive drop in hash rate (obviously -- I'm sure this came as no surprise to anybody.) Regardless, although I backed off some of my miners, I continued to mine Megacoin using a significant portion of my GPU farm regardless simply to move along the difficulty adjustment more quickly and help ease the transition into the updated reward size after this second halving. You'd have a hard time finding a less profitable coin to mine at the time, but, being a fan of Megacoin, I figured I would take one for the team.

I watched the hash rate fall from 1GH/s to less than 30MH/s and I'm now officially confused by the difficulty adjustments. The minimal change on the first few adjustments I understood...as there was still a carryover of the high hash rate factored in. However, with the difficulty adjustment taking place after every 10 blocks, I'm not sure why the difficulty just went up on the last adjustment! Virtually nobody is mining this coin and we're now 180 blocks into the halved reward. The average hash rate over the past 24 hours is the lowest it has been in weeks...and the current hash rate is the lowest I have ever seen it. If I pull my miners off of Megacoin, the hash rate will likely drop to less than 10 MH/s...and that drop could be just enough to scare off anybody left mining this coin. If I walk away, it could potentially kill Megacoin depending on how long it's going to take to get the difficulty where it belongs. This is ridiculous considering this was one of the hottest coins out there for weeks leading up to this situation.

I guess my main question is: how is the difficulty adjustment being calculated? Is the formula available somewhere? I can't waste power and hash power on this for everybody if it's going to drag on for months -- I'd have to accept the demise of Megacoin at that point (unless somebody else steps up to the plate.) You would assume that a coin designed to halve so often in the initial stages would have a difficulty formula designed for the certain drop in hash rate after each halving. 10 blocks is great...but what stats are being used when it adjusts? I think most would agree this is an obvious flaw in the design of this coin (especially with all of the altcoins out there right now -- you have to be pretty dedicated to continue to mine it like I am...and even I'm losing faith here.) 

I have been pumping away at 33-35 MH/sec for the past 36+ hours and have missed out on a ton of profit because of it (I have found 22 blocks in that span -- about $15USD based on current market value...or roughly 1/3 of what it will cost me in power.) Sure it's possible I've just had really bad luck...but even if I found every block it would barely be worth it! The real issue here is the difficulty adjustment formula -- it doesn't account for an impatient user-base with plenty of options. I'm beginning to grow concerned that the panic-sellers on Cryptsy I was making fun of just 24 hours ago might have made the right decisions. This could literally kill this coin -- there are too many alternatives out there and people have a short memory when it comes to this stuff -- I'm one of the few people willing to throw away hundreds of dollars just to keep this coin moving along. The reward has halved, the market value per coin has halved, and yet here we are, 36 hours later, seeing the difficulty adjust improperly. I think the formula needs to be changed or at least explained more clearly.

I'm giving this 12 more hours and if I haven't received a clear explanation and the difficulty remains way too high (as it currently is), I'm backing off my remaining hash power -- there really is no other option. At this rate, that could mean nobody will be mining Megacoin for months (if the coin even survives.) Everybody is upset about this...and I've just been casually riding it out doing what I can to help but I'd like to ensure that there is light at the end of the tunnel and make sure everybody is in the loop.

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[x^2]

I apologize in advance for posting here -- obviously this isn't a very efficient section for this. Although I've been involved in the scene for years, I just recently registered here, so I can't post anywhere relevant. I know plenty of people in the Megacoin community, in addition to casual holders and/or multipool miners, are in a similar position as me. I'd appreciate it if somebody could link to this post from the main Megacoin thread.

Since Megacoin halved early yesterday (250 -> 125 coins / block), there has been a massive drop in hash rate (obviously -- I'm sure this came as no surprise to anybody.) Regardless, although I backed off some of my miners, I continued to mine Megacoin using a significant portion of my GPU farm regardless simply to move along the difficulty adjustment more quickly and help ease the transition into the updated reward size after this second halving. You'd have a hard time finding a less profitable coin to mine at the time, but, being a fan of Megacoin, I figured I would take one for the team.

I watched the hash rate fall from 1GH/s to less than 30MH/s and I'm now officially confused by the difficulty adjustments. The minimal change on the first few adjustments I understood...as there was still a carryover of the high hash rate factored in. However, with the difficulty adjustment taking place after every 10 blocks, I'm not sure why the difficulty just went up on the last adjustment! Virtually nobody is mining this coin and we're now 180 blocks into the halved reward. The average hash rate over the past 24 hours is the lowest it has been in weeks...and the current hash rate is the lowest I have ever seen it. If I pull my miners off of Megacoin, the hash rate will likely drop to less than 10 MH/s...and that drop could be just enough to scare off anybody left mining this coin. If I walk away, it could potentially kill Megacoin depending on how long it's going to take to get the difficulty where it belongs. This is ridiculous considering this was one of the hottest coins out there for weeks leading up to this situation.

I guess my main question is: how is the difficulty adjustment being calculated? Is the formula available somewhere? I can't waste power and hash power on this for everybody if it's going to drag on for months -- I'd have to accept the demise of Megacoin at that point (unless somebody else steps up to the plate.) You would assume that a coin designed to halve so often in the initial stages would have a difficulty formula designed for the certain drop in hash rate after each halving. 10 blocks is great...but what stats are being used when it adjusts? I think most would agree this is an obvious flaw in the design of this coin (especially with all of the altcoins out there right now -- you have to be pretty dedicated to continue to mine it like I am...and even I'm losing faith here.) 

I have been pumping away at 33-35 MH/sec for the past 36+ hours and have missed out on a ton of profit because of it (I have found 22 blocks in that span -- about $15USD based on current market value...or roughly 1/3 of what it will cost me in power.) Sure it's possible I've just had really bad luck...but even if I found every block it would barely be worth it! The real issue here is the difficulty adjustment formula -- it doesn't account for an impatient user-base with plenty of options. I'm beginning to grow concerned that the panic-sellers on Cryptsy I was making fun of just 24 hours ago might have made the right decisions. This could literally kill this coin -- there are too many alternatives out there and people have a short memory when it comes to this stuff -- I'm one of the few people willing to throw away hundreds of dollars just to keep this coin moving along. The reward has halved, the market value per coin has halved, and yet here we are, 36 hours later, seeing the difficulty adjust improperly. I think the formula needs to be changed or at least explained more clearly.

I'm giving this 12 more hours and if I haven't received a clear explanation and the difficulty remains way too high (as it currently is), I'm backing off my remaining hash power -- there really is no other option. At this rate, that could mean nobody will be mining Megacoin for months (if the coin even survives.) Everybody is upset about this...and I've just been casually riding it out doing what I can to help but I'd like to ensure that there is light at the end of the tunnel and make sure everybody is in the loop.

a halve that big would have drawn off miners no matter what.  megacoin is a good coin, but to encourage mining, coins should do a 10% or 25% cut.  good luck though! 

[Jgguy]

That's the problem with alt-coins.  They are even more volatile then bitcoin.  You could be putting all this hashing power (or money) into it only for it to be gone should people lose faith in the alt-coin.

[rascal777]

Hmmm.... Interesting!  I didn't realize that halving would cause such a drop in price... I figured that halving would make the coin more valuable.

[bholzer]

Well, in theory, it should make the coin more valuable. Long-term, it most likely will. However, when the reward was halved, everybody obviously stopped mining. Like I said, there are too many alt-coin options out there (many of them starting to blow up) and it's asking a lot to expect anybody to continue mining with an instant 50% reduction in return. The price dropped because people started panic-selling Megacoin out of fear that Megacoin would shrivel up and die. To make matters worse, more and more people are migrating toward the multipool model...which absolutely destroys the integrity of these coins. In the long-run, if this trend continues, altcoins in general are probably doomed (maybe one or two would be left standing.) Nobody cares about what they're mining and nobody is committed to anything -- whatever nets them the most profit at that exact moment is all that matters...which is unfortunate.

I knew the Megacoin hash rate would drop dramatically, but figured the difficulty would quickly adjust accordingly (the advantage of 10 block retargets) making Megacoin profitable to mine again with only a brief dip. Through the last halving, I only had a small portion of my farm mining MEC and wasn't monitoring the outcome. However, the destruction it caused to progress was considerably less as the hit barely registered. Obviously the hash rate will be lower after a reward adjustment here...but this would correct itself as well as long as the value of the coin increased as-expected. Imagine my surprise when I was throwing 35 MH/s at the Megacoin network for 24 hours after the reward reduction and the difficulty had not improved! Imagine my surprise now another 24 hours later! It's almost like a game of chicken at this point -- how stupid am I? I am paying more just in power than I am getting back in Megacoins at current market value...and you have to factor in the risk as well. Obviously the monthly halving for the first 5 months wasn't very well thought out -- the difficulty formula was poorly designed. 48 hours and 18 retargets later, with an average network hash rate of about 40 MH/s over the past 24 hours (about 80% of which was my hashing power) and the difficulty was actually higher than it was when we were hovering around 1 GH/s! Some lag was expected...but this is ridiculous.

Hopefully this next retarget drops the difficulty dramatically (which should happen any minute) or else I'm moving all of my machines mining Megacoins back to Litecoins with the rest of my farm. I've literally been continuing to mine Megacoins for the last 2 days just to keep Megacoins moving forward (it's my opinion that if you choose a coin to mine you should stick with it -- these multipools or constantly switching based on standings are destroying the integrity of alts.) I really thought I would lead by example and others would follow...but if it wasn't for me, mining Megacoins probably wouldn't be profitable for weeks (if ever -- they would most likely die.) My reward for continuing to push forward is a couple thousand Megacoins (currently worth less than $0.01USD / each) and a massive power bill. On top of that, the difficulty still hasn't corrected itself. Taking one for the team is one thing...but I'm starting to feel pretty ridiculous considering nobody really seems to care. If it pops back up to the top of the profitability list, then people will mine it. Otherwise, forget it. Obviously I'm holding my fair share of Megacoins (this wasn't 100% out of the kindness of my heart) but if I would have just dumped them all, started mining something else, and let MEC die I'd be further ahead than I am now.

Even if things get rolling again we're going to have this exact same issue a month later when the reward drops again. Retarget formulas in general need some work but this one is ridiculous considering the rapid reward adjustments. My guess is the difference in a month (assuming we make it there) is that the value will hold through the retarget. The panic-sellers and multi-pool miners will be primarily dumping them to long-term investors (so hopefully things won't be quite as bumpy.) Either way it would be great if the devs could look into adjusting the difficulty formula.

Alright -- I'm out! Looking forward to the day I can post in relevant discussions. I have a mountain of notes here on various items/topics and I'd like to get them in front of the correct audience (not that I don't appreciate insight from everybody -- just isn't quite as targeted in a general forum like this.)

[x^2]

Alright -- I'm out! Looking forward to the day I can post in relevant discussions. I have a mountain of notes here on various items/topics and I'd like to get them in front of the correct audience (not that I don't appreciate insight from everybody -- just isn't quite as targeted in a general forum like this.)

So no more MEC?