Most pools are moving to a variable difficulty or minimum variable difficulty setting to avoid the bandwidth flood that occurs with ASIC hardware, but a lot offer the option of setting a fixed target or the minimum yourself per worker. There is an endless stream of questions on almost every separate pool's thread on what difficulty they should set if setting it manually. Note that you CANNOT EARN MORE by tweaking the difficulty.

So to make it easier, I'm going to give you a mathematically suggested strategy - this is all my opinion based on the maths though since there is no one true answer.

Setting the difficulty low for your hardware risks causing floods of bandwidth problems for both the miner and the pool operators.

Setting the difficulty high for your hardware causes no potential for communication problems, but the higher the difficulty, the more variance your payouts will see (i.e. your pay will fluctuate more) but it will average out to the same pay over time.

No bitcoin mining hardware device currently in existence uses the diff internally - they all mine at diff 1 and the mining software filters out results below what your pool has set it to so it makes no difference what hardware you use as to what diff you mine at.

i.e. only hashrate matters.

So we definitely don't want the difficulty too low, but what should we use as the cut off for how high to set the diff?

Organofcorti did a wonderful analysis of this last year:

http://organofcorti.blogspot.com/2012/10/71-variable-pool-difficulty.htmlThere is no magic endpoint to choose since the graph of share return rate versus variance is a curve -

*however* - above a certain share return rate, 1% variance is small enough that it is much less than the pool's own luck's variance, and unless you were mining PPS there's a good chance you wouldn't be able to distinguish the difference on any one day. You also need a much bigger jump in share return rate before you can get below that 1% variance.

So my suggestion is to aim for a share return rate no higher than the highest difficulty that keeps you at 1% variance if you are setting a "minimum difficulty" or perhaps the value that keeps you under 1.2% for a fixed difficulty. This can be worked out easily if you know your hashrate without even testing it.

So our target is a diff that returns 20-25 shares per minute.

Every 71.6MH/s returns one share per minute - therefore every GH/s returns about 14 shares per minute.

A share return rate of 20 needs a diff of 1 per 1.432GH/s if setting a fixed difficulty.

A share return rate of 25 needs a diff of 1 per 1.79GH/s if setting a minimum difficulty.

Most pools are allowing you to set a fixed diff, so let's keep this final recommendation as simple as possible, and aim for 20 shares per minute. That's a diff of 1 per 1.432GH/s. The accuracy of this maths is not that important since the final endpoint is arbitrary anyway so we can knock off a few significant digits off our final recommendation.

**TL:DR**Set your diff to your worker's hashrate in GH / 1.4