Why are people drawn to GHash.io, and how can we reverse it?

[toast]

I'm willing to throw down some BTC for bounties to improve other pools, particularly the p2pool implementation.

Right now, if I want to destroy bitcoin, I need to coerce just two people. This is a huge, huge problem.

[empoweoqwj]

I'm willing to throw down some BTC for bounties to improve other pools, particularly the p2pool implementation.

Right now, if I want to destroy bitcoin, I need to coerce just two people. This is a huge, huge problem.

I don't understand - how do you destroy bitcoin by coercing two people?!?

[toast]

I'm willing to throw down some BTC for bounties to improve other pools, particularly the p2pool implementation.

Right now, if I want to destroy bitcoin, I need to coerce just two people. This is a huge, huge problem.

I don't understand - how do you destroy bitcoin by coercing two people?!?

GHash.io and BTC Guild pool operators.

[spooderman]

agreed network health is awful

[empoweoqwj]

I'm willing to throw down some BTC for bounties to improve other pools, particularly the p2pool implementation.

Right now, if I want to destroy bitcoin, I need to coerce just two people. This is a huge, huge problem.

I don't understand - how do you destroy bitcoin by coercing two people?!?

GHash.io and BTC Guild pool operators.

OK gotcha. What % of the market do they have between them?

[toast]

I'm willing to throw down some BTC for bounties to improve other pools, particularly the p2pool implementation.

Right now, if I want to destroy bitcoin, I need to coerce just two people. This is a huge, huge problem.

I don't understand - how do you destroy bitcoin by coercing two people?!?

GHash.io and BTC Guild pool operators.

OK gotcha. What % of the market do they have between them?

Around 60%, based on last 4 days of blocks. Also big "unknown" slice makes this scarier.
https://blockchain.info/pools?timespan=4days

[empoweoqwj]

Yeah, 60% is a lot. Could do with having a dozen "big" players. Unfortunately its a free market, so what to do?

[toast]

Get the attention of large BTC stakeholders and ask them to sponsor improvements or subsidies for competing pools (especially p2pool).

[empoweoqwj]

Get the attention of large BTC stakeholders and ask them to sponsor improvements or subsidies for competing pools (especially p2pool).

I don't mine myself so am no expert but isn't it just a case of competing pools actually ... competing ? e.g. by improving services, or reducing fees? Must be a reason people use these two massive services? Compete with them

[toast]

Get the attention of large BTC stakeholders and ask them to sponsor improvements or subsidies for competing pools (especially p2pool).

I don't mine myself so am no expert but isn't it just a case of competing pools actually ... competing ? e.g. by improving services, or reducing fees? Must be a reason people use these two massive services? Compete with them

Yes.
It's a free market, so large stakeholders have total freedom to protect their savings by investing in other pools.

[maxman190]

The big thing that drawn me to GHash was the cloudmining. Used around .1 BTC and got 2GH/s that constantly mines around .00001300 BTC every block.

[TechByPC]

People are drawn to Ghash.IO primarily because it has a high hash rate which provides quick results (people like instant gratification). The website is slick with the automatically updating stats. It merge mines several coins (perceived value, even if some of those coins are not worth much). There is zero fee. It allows someone to automatically split up the mining proceeds by percentage, for example, for a group buy. There is also the gambling / trading aspect of cex.io which has its own lure. Additionally, and perhaps most hurtful of all is the marketing aspect that incentivises people to advertise for them.

I agree that it is a big threat, and there is no way to know for certain that cex/ghash do not have additional hashpower running on other "unknown" private pools. Knowing that they will hurt themselves if they dump too much into cex.io at once. It is also unknown just what the ratio of their own hash power to individual's personal hash power pointed at that pool is. The other threat is that there is no representative (that I have seen anyway) that interacts with the community. They do not seem to be publicly interested in cleaning up their name in many of the threads about their past with double spending, for example. Ask yourself for a moment - how do they make any money themselves? They charge no fees for trading, minimum fees for withdrawing, very minimal fees for their own hash rate rentals. There is something else going on there, and this puts them in a class by their own.

I do not agree that something "needs to be done" about BTC Guild. The pool admin seems a very standup guy who is himself interested in the health of the community. I think that if it ever did come down to short term personal gain or the community, he would do the right thing for the community, and ultimately his own long-term personal gain as well. The vast majority of the hash power there is voluntary - meaning that people could pull their miners en masse and the pool could instantly be smaller. The pool has also not had the same bursting growth rate as ghash.io, and right now is also the biggest weapon the community has in fighting cex.io if it attempted to run a 51% attack. When bringing up new mining equipment, putting it on any pool other than those two is probably the best thing any of us can do individually, but it doesn't help that (from my testing) the most profitable pool is BTC Guild - in spite of its fees. If I'm in a group buy or trying to get a full return on a piece of hardware, it is silly to mine on a pool that I know will return a lower profit over enough time that I know variance isn't the cause.

Anyway - my 2 cents. I think what the rest of the pools need (other than the top 2) is very clear so I won't spell it out unless someone actually wants me to.

[toast]

Anyway - my 2 cents. I think what the rest of the pools need (other than the top 2) is very clear so I won't spell it out unless someone actually wants me to.

I actually am not familiar with the different pools, I would find this information useful and might allocate some resources accordingly.

[Dende]

I think the damage has been done. cex.io has a lot of money to expand their farm which comes from selling really overpriced hashrate and people still keeps throwing their btc at cex.io. Right now, we can only tell people to avoid it and educate people about the importance of keeping bitcoin decentralized. Even moving to btcguild is a good idea right now.

I have mentioned about how mining manufacturers can help in keeping bitcoin secure and decentralized in this thread https://bitcointalk.org/index.php?topic=399313.20

I think many people just want to get the most profit out of their miner.
I am in for the long run but early december I had a chance of getting a miner and all I think about was how can I roi as soon as possible and not about enhancing bitcoin security.
There need to be an incentive for bitcoin decentralization. Cheaper miner with p2pool contract for example if the manufacturers are willing, or plug and hash p2pool miner for people who is not tech-savvy. Manufacturers could play a role in the decentralization of bitcoin, and they should, they are getting a lot of money from the success of bitcoin.

For the short term, I think convincing miners into going to smaller pool is a priority before p2pool matures either through incentives or education of bitcoin security. ghash.io already has 1/3 of the global hashrate and it looks like it is still growing by comparing 24hr chart with 4 days chart https://blockchain.info/pools

I hope manufacturers are aware of the situation we are in and get their effort to improve it.

Many are seeing bitcoin as a way of making money, profits etc and it is hard to move forward if things stay this way. Bitcoin is more than that and I hope more people realize this and put more interest in keeping bitcoin secure. Please visit this thread and give your support in the effort for bitcoin decentralization https://bitcointalk.org/index.php?topic=329860.0

[empoweoqwj]

I think the damage has been done. cex.io has a lot of money to expand their farm which comes from selling really overpriced hashrate and people still keeps throwing their btc at cex.io. Right now, we can only tell people to avoid it and educate people about the importance of keeping bitcoin decentralized. Even moving to btcguild is a good idea right now.

I have mentioned about how mining manufacturers can help in keeping bitcoin secure and decentralized in this thread https://bitcointalk.org/index.php?topic=399313.20

I think many people just want to get the most profit out of their miner.
I am in for the long run but early december I had a chance of getting a miner and all I think about was how can I roi as soon as possible and not about enhancing bitcoin security.
There need to be an incentive for bitcoin decentralization. Cheaper miner with p2pool contract for example if the manufacturers are willing, or plug and hash p2pool miner for people who is not tech-savvy. Manufacturers could play a role in the decentralization of bitcoin, and they should, they are getting a lot of money from the success of bitcoin.

For the short term, I think convincing miners into going to smaller pool is a priority before p2pool matures either through incentives or education of bitcoin security. ghash.io already has 1/3 of the global hashrate and it looks like it is still growing by comparing 24hr chart with 4 days chart https://blockchain.info/pools

I hope manufacturers are aware of the situation we are in and get their effort to improve it.

Many are seeing bitcoin as a way of making money, profits etc and it is hard to move forward if things stay this way. Bitcoin is more than that and I hope more people realize this and put more interest in keeping bitcoin secure. Please visit this thread and give your support in the effort for bitcoin decentralization https://bitcointalk.org/index.php?topic=329860.0

Do people actually make money at cex.io? If so, hard to argue against market forces. If not, what the heck are people doing???

[Markov]

I personally use cex because it is easy to use and you can reinvest the BTC into more ghash easily. If you don't own a miner then it is useful. I use other pool though and when I have enough on cex I usually buy into GB. Cex is just very useful but yes expensive.

[Dende]

Do people actually make money at cex.io? If so, hard to argue against market forces. If not, what the heck are people doing???

Lets look at this historical data I got from cex.io thread

These are the closing prices from October 1st to December 27th. Others may fill in the gaps.

1-Oct    0.23000000
2-Oct           0.23849000
3-Oct           0.23000000
4-Oct           0.23510000
5-Oct           0.22400000
6-Oct    0.21000000
7-Oct    0.21790000
8-Oct    0.21730000
9-Oct    0.21700000
10-Oct   0.19120000
11-Oct   0.18990000
12-Oct   0.18478000
13-Oct   0.18180000
14-Oct   0.18270000
15-Oct   0.14250000
16-Oct   0.13399900
17-Oct   0.13998000
18-Oct   0.14039900
19-Oct   0.14131000
20-Oct   0.13890000
21-Oct   0.13180000
22-Oct   0.12200000
23-Oct   0.09500000
24-Oct   0.08266000
25-Oct   0.09090900
26-Oct   0.09750000
27-Oct   0.09980000
28-Oct   0.10427500
29-Oct   0.10410000
30-Oct   0.10600000
31-Oct   0.10748900
1-Nov   0.10760900
2-Nov   0.11046900
3-Nov   0.11999900
4-Nov   0.10050000
5-Nov   0.10710000
6-Nov   0.11411900
7-Nov   0.10517900
8-Nov   0.10189900
9-Nov   0.09445000
10-Nov   0.09638000
11-Nov   0.09582600
12-Nov   0.09110000
13-Nov   0.09099900
14-Nov   0.08100000
15-Nov   0.07920000
16-Nov   0.07990000
17-Nov   0.08097900
18-Nov   0.08074000
19-Nov   0.07866000
20-Nov   0.08402000
21-Nov   0.08205000
22-Nov   0.08199900
23-Nov   0.08400000
24-Nov   0.08499900
25-Nov   0.08661100
26-Nov   0.07974000
27-Nov   0.07680800
28-Nov   0.06767000
29-Nov   0.06599900
30-Nov   0.06879500
1-Dec   0.07150400
2-Dec   0.07128873
3-Dec   0.07210000
4-Dec   0.07308999
5-Dec   0.07399962
6-Dec   0.07986940
7-Dec   0.07699900
8-Dec   0.07555444
9-Dec   0.07237200
10-Dec   0.06949988
11-Dec   0.07118001
12-Dec   0.07389989
13-Dec   0.07397213
14-Dec   0.07346848
15-Dec   0.07189998
16-Dec   0.07257734
17-Dec   0.07232347
18-Dec   0.07187850
19-Dec   0.06999992
20-Dec   0.06769040
21-Dec   0.06861000
22-Dec   0.06795171
23-Dec   0.06239999
24-Dec   0.05619993
25-Dec   0.05664157
26-Dec   0.05127993
27-Dec   0.04988691

I dont use cex.io so I cannot say if it is profitable or not but lets do a simple math using the data above.

Say you got 10ghs on 5th Nov 2013 at 0.10710000btc/ghs totalling 1.071btc.
You let it mine for a month with difficulty 510929738 and got 0.2953btc. I assumed the difficulty does not change so the amount will be less than this.
Then on 5th Dec 2013 you sold your 10ghs at 0.07399962 totalling 0.7399962btc/ghs.
Your profit will be .7399962 + 0.2953 - 1.071 = -0.0357038btc.

I picked the date at random and data for difficulty I got from http://bitcoinwisdom.com/bitcoin/difficulty
It does not look like a good investment to me. You could increase your btc holdings by daytrading but I wouldnt call daytrading an investment.

[TechByPC]

Don't confuse cex.io with ghash.io. These are two separate issues.

[Dende]

Don't confuse cex.io with ghash.io. These are two separate issues.

cex.io is part of ghash.io
The ghashes people trade on cex.io are hashing for ghash.io

[e521]

Yeah, 60% is a lot. Could do with having a dozen "big" players. Unfortunately its a free market, so what to do?

This issue has been already pointed out during last year bitcoin conference.
That's what you get with proof of work and ASICwith an "high" entry barrier.
Core developers should seriously start to think about a way to mitigate 51%