Why use a PPS pool when there are large PPLNS pools?

[wndsnb]

Just wanted to get people's reasoning, since most people seem to choose PPS.

Take, for example, ViaBTC. Current pool hashrate is >20000PH, which gives about 18 blocks a day on average. So 126 blocks a week, and 540 blocks a month.

Using some Poisson magic...

The chances of finding 100 blocks or less when you'd expect 126 is 1 in 100. That would be about 20% (or more) less reward than expected once every couple of years.

The chances of finding 486 blocks or less when you'd expect 540 is 1 in 100. The chances of finding 486 or more is 99.1%.

Is it really worth paying more fees to avoid such a small chance of getting 10% less in a given month?

In the span of a year, it would be 1 in 1000 to find 4% fewer blocks, 1 in 100 to find 3% fewer, 1 in 10 to find 2% fewer.

Of course, it goes the other way too, so you can also get more blocks than expected.

Also, with a PPS pool, how do you know what fee you are actually paying? Just based on expected earnings? How would you know if you are getting the right amount of transaction fees (for pools that include it)? Do any publish the formula they use for calculating the transaction fee amount included in the payout?

[DaveF]

Many people have different reasons.
Some want the consistent payouts.
Some small home miners don't have their miners on 24/7 and the ramp up and down can kill your profits.
Others like to hop between pools and possibly other SHA coins.
And so on.

As for are you getting all the TX fees, most pools do publish how they pay them, if you want to go back and do the math.

-Dave

[philipma1957]

Have you ever had back to back 99.9% cdf blocks on a pplns pool?
Have you ever had 80% blocks for a month?

I have done both.

I have been on pools that should hit 100 blocks in a month and they hit 80

I have been on pools that should hit a block a day and they hit 2 blocks in 20 days.

All pplns pools are subject to witholding attacks.

and pps pays and pays and pays and pays.

One can argue viabtc grabs too much in fees for certainty  of payment.

But I also get a few referrals and that kind of fixes the issue.

Ideally I guess a USA based pplns pool would work, but I am simply not a big enough player.

Say 2eh of hash and I could try to just solo mine

[kano]

The issue is actually that most PPS miners think it's illegal, a hack, they can't trust the pool, it's gonna disappear tomorrow,

or have no business acumen.

PPLNS should only be higher variance, and can run at much lower fees.
But you will also find that most miners don't even know what variance means.

PPS fees are very high.
e.g. I wonder why people are happy to hand over more than $5.4mil a month in fees just to FUPool?

21.3EH/s = 119.9 BTC a day + tnx fees
= 119.9 * 30.5 * 3.0% = 109.7 BTC a month in pool fees

Of course some of these miners are also happy to pay another 2-3% in hack firmware fees and daily withdrawal fees.
Basically it's all a grab it and run mentality that been on going for a long time.

Money laundering has a high % loss - so I guess some follow that idea

As I've mentioned before on my pool, the top miner(s) left when we had a bad luck month.
Yet the full year including that month was above other pools ... so business acumen comes into it also.

The "I must get paid daily" mentality I guess is if you don't trust who you mine with.
Well, pick someone else I guess you do trust?

[wndsnb]

Some small home miners don't have their miners on 24/7 and the ramp up and down can kill your profits.

That would just increase variance, not kill profits in the long run. Large enough pool and it is not an issue.

Have you ever had back to back 99.9% cdf blocks on a pplns pool?
Have you ever had 80% blocks for a month?

I have done both.

I have been on pools that should hit 100 blocks in a month and they hit 80

I have been on pools that should hit a block a day and they hit 2 blocks in 20 days.

Again, large enough pool, and not really an issue.

Getting 80 instead of 100 in a month is a once in 4 years kind of occurrence.

1 Block a day is a lot different than 18 a day, but if you expected 20 blocks and only got 2 or fewer in a given time period, that is a 1 in 2,195,318 chance event. Probably more likely that the pool software was screwing up....

[philipma1957]

Some small home miners don't have their miners on 24/7 and the ramp up and down can kill your profits.

That would just increase variance, not kill profits in the long run. Large enough pool and it is not an issue.

Have you ever had back to back 99.9% cdf blocks on a pplns pool?
Have you ever had 80% blocks for a month?

I have done both.

I have been on pools that should hit 100 blocks in a month and they hit 80

I have been on pools that should hit a block a day and they hit 2 blocks in 20 days.

Again, large enough pool, and not really an issue.

Getting 80 instead of 100 in a month is a once in 4 years kind of occurrence.

1 Block a day is a lot different than 18 a day, but if you expected 20 blocks and only got 2 or fewer in a given time period, that is a 1 in 2,195,318 chance event. Probably more likely that the pool software was screwing up....

there were at least two proven witholding issues.

btcguild was attacked or accidentally with held
slush was attacked or accidentally with held

when bitminter got back to back 99.9% cdf which occurred in a string of 10 blocks that had 7 90%+ cdf blocks I quit them.

lastly kanos pool was god like first 1000 blocks ungodly good then the wheel fell off.

So I mine on viabtc and on mmpool .

If you check mmpool they had a four year drought and then popped 3 blocks in three months.
I picked up over 1.3 btc with just about a single s9 mining for the four years.

Ie under 1 trillion shares got me the 1.3 btc should have been 1/6 of 22 trillion which is 3.67 trillion shares

so i should have earned under .4 btc I also got the value of hodling without hodling as coins were 4k on 9/11/2017

and were an average of 50k for the 1.3 btc

may as well ask why dont more do what I did with mmpool.

ie act as a remora to a great white shark.

so the extra .9 btc makes up for the fees and certainty on viabtc.

btw you can do this with kanos pool and if you get hot you make out pretty well.

I would argue playing 20th to 40th on mmpool and 1000 th on viabtc is better than any other two pools in the time range of
9/11/2017 to 12/05/2021

[kano]

...

Have you ever had back to back 99.9% cdf blocks on a pplns pool?
Have you ever had 80% blocks for a month?
...

...
Getting 80 instead of 100 in a month is a once in 4 years kind of occurrence.
...

Heh - alas 80% doesn't necessarily mean 80 in 100.

80% means the block mean is 1.25 (i.e. 10/8)

Getting 8 blocks with a 1.25 mean
Erlang CDF -> 1 in 4.54 chance
If you are getting 8 blocks a month then that's once in 4.54 months - yep not unexpected

Getting 80 blocks with a 1.25 mean
Erlang CDF -> 1 in 57.3 chance
If you are getting 80 blocks a month then that's once in 57.3 months = 4.8 years - well not the end of the world I guess

However the specific case was 228 blocks with a 1.26 mean
Erlang CDF -> 1 in 7659.5 chance
If you are getting 228 blocks a month then that's once in 638.3 years - yeah ok that shouldn't happen

[wndsnb]

I dug around at ViaBTC and F2pool for how they calculate payouts, the PPS+ at ViaBTC is the sum of PPS (based solely on difficulty) for the block reward and PPLNS for the transaction fees. 4% fee for the block reward, 2% fee on the transaction fees. PPS+ at F2pool is the same, except it's a 2.5% fee on both block reward and transaction fees.

For ViaBTC, if you compare PPLNS at 2% vs their PPS+, you'd expect to be ahead at the end of the year when using PPLNS about 9 out of 10 years. Maybe a bit less if transaction fees get really high. It's a lot closer with F2pool at 2.5%, but you should still be ahead 2 out of 3 years or so.

[kano]

Heh I was going to do a thread a while back (but then forgot about it)
explaining how to work out the truth of the PPS+ fees any pool claims.

It all depends on the txn fees - and you can work that out simply by looking at the blocks they've found.
So e.g. if PoolX found X blocks in the previous diff change (14-Nov -> 28-Nov) you can determine the total fees in that range
and thus determine what the actual + they should be paying, vs the actual PPS value you get for your hash rate in that range.

i.e. it's all very straight forward to work out without having to believe what they claim.

[mikeywith]

Taking FPPS out of the equation eliminates the need to discuss transaction fees as they are identical on both PPS+ and PPLNS payment methods, which brings us down to one key point and that is VARIANCE, paying 2% extra in fees while knowing in advance that for the next 2016 blocks I will be getting x amount of BTC is worth it for me, also the fact that both my internet connection and electricity aren't stable 24/7 makes variance even more noticeable and I simply hate variance.

Unlike what Kano thinks, this has nothing to do with business acumen, it all boils down to what the miner actually does with the payout as they get them, if someone hodl their payouts long enough to overcome any variance, then of course why pay more fees? but for someone that utilizes their payouts as they come, I am happy to hand out 2% more fees not to risk having a single month of -20% or anything like that.

And then imagine a pool that dies slowly like Kano.is, think of all the folks who mined for 10 months without hitting a block while paying the power bill, killing their miners and checking the status page every hour, and then they ended leaving to another pool, I am sure if you ask any of them, they would wish they paid 5 times the fees and got paid in PPS, of course, those who can afford to stay long enough will eventually end up earning higher than PPS pools, but that is a big if.

This PPS vs PPLNS is really similar to buying a house with cash upfront or installments, there is no right or wrong about it, it has everything to do with your risk tolerance, and wether you make use of less money today than more money the next month.

[wndsnb]

... am happy to hand out 2% more fees not to risk having a single month of -20% or anything like that.

with the current viabtc hashrate, getting 20% less reward than pps in a month would be about one in a million...

10% less would be about 1 in 100.

Small pool issues are a whole different discussion, I'm only talking about large pools. Although, since difficulty has essentially been flat for the past year, mining on a small pool had less of a disadvantage than usual.

[mikeywith]

with the current viabtc hashrate, getting 20% less reward than pps in a month would be about one in a million...

10% less would be about 1 in 100.

I am aware of the chances and how low they are assuming your miners are up 24\7, when they are not -- variance can be largely affected by it, i had a few terrible months on slush pools years ago (which i know i probably wasnt going to face for years to come) but when I moved to PPS i can see how it is worth it, i don't care if it is one in a thousand or one in ten, i know any pool is subject to having a terrible day, week or month and I rather not be affected by it given that I only pay an extra of 2%.

But then speaking of fees alone, Binance pool has 2.5% PPS fees for that matter which is only 0.5% higher than viabtc PPLNS, there is also another small PPS pool that has 2% fees (i will try to remember the name later).

The point is some people rather use x pool for small features like a smooth app, smart mining or low payout threshold even at a higher fee, so slightly higher fees to avoid variance no matter big or small is indeed worth it to many people

Small pool issues are a whole different discussion, I'm only talking about large pools. Although, since difficulty has essentially been flat for the past year, mining on a small pool had less of a disadvantage than usual.

Hashrate migration is a worse issue than difficulty increase, when people move to larger pools variance on small pools increases to a point that it becomes risky to use, the only reason viabtc is this big is because of PPS, eventually pools that offer only PPLNS will likely and sadly fade away.

The mining business is already full of variance and surprises in every aspect of it, mining to a PPS pool reduces that, you can even borrow money against your future payouts, but you can not do that with PPLNS because it does not matter how low the chances are even a large pool can have some bad months.

[kano]

Alas, ignorance of the meaning of the word 'variance'.

Variance means up and down.
Over time it averages out above due to lower fees (on large PPLNS pools).

I see comments all the time about how a 'bad' month can't be handled.
Yet they ignore the good months that make it average better ...

I guess the real problem is people having no impulse control:
 ... good month ... go blow all the extra on drugs ...
 ... bad month ... shit what did I do with all that extra BTC I had ... better move to a higher fee PPS pool.

[mikeywith]

Alas, ignorance of the meaning of the word 'variance'.

Ya you are the only person in the world who understands what variance means.

I see comments all the time about how a 'bad' month can't be handled.
Yet they ignore the good months that make it average better ...

Ya imagine having a good month when btc is down 40% in price and a bad month when its up 50% or simply a whole bad epoch when difficulty is down, just because you are narrow minded does not mean everyone has to think like you do.

No thanks i will leave both the ups and down for pool to handle and enjoy stable payouts.
 

I guess the real problem is people having no impulse control:
 ... good month ... go blow all the extra on drugs ...
 ... bad month ... shit what did I do with all that extra BTC I had ... better move to a higher fee PPS pool

Yup, see one con of using PPLNS is the chance of getting addicted to drugs.

[kano]

Lulz, ignorance is bliss.

All the pools should be PPLNS, but alas people who think they are experts all give out the false information about why everyone should be mining PPS.
So everyone is happy paying more fees and the big pools are ripping you a new one every day making even more of a fortune out of you all wanting to pay high fees

[mikeywith]

Someone is jealous because nobody uses their PPLNS pool and wants to convince people that variance is a good thing.

Not sure why are you forcing your opinion upon us and calling those who disagree with it "ignorant" you need to get off your high horse, this is not good for your health.

[wndsnb]

lol ... let's keep it, civilized guys...

It doesn't make much of a difference now since profitability is so high, but when things get tighter that 0.5% or 2% fees can take a good chunk of your profits away depending on your power/operating costs. If you have nearly free power, it doesn't make much of a difference. If you're paying 10c/kwh and profitability drops out of the stratosphere then that 2% might be 10% of your profits...

So, obviously no universally correct answer for everyone. Everyone has their own risk tolerance, operating costs, business arrangements,... etc. People should make the decision with all the info though, and based on the popularity of PPS pools over PPLNS, I'm inclined to believe that a lot of people are not making an informed decision.

I'd guess large operations with multiple investors might have a problem with varying profitability when sending out financial reports. When you hit that 1 in 100 month and your income is 10% below expected it may be difficult to explain to investors.

Too bad ViaBTC doesn't publish the % of their hashrate that is PPLNS vs PPS.

[DaveF]

I'd guess large operations with multiple investors might have a problem with varying profitability when sending out financial reports. When you hit that 1 in 100 month and your income is 10% below expected it may be difficult to explain to investors.

It's not even a question of explaining it to investors, it's a question of the opportunity cost of money.
If you are generating a fair about of BTC mining. You get a somewhat known amount with PPS you can then budget to get more miners & power knowing how much BTC you are going to take in.
You will probably over time get more BTC on a PPLNS pool, *but* if you are buying new miners out of the money coming from mining then unless you are in a huge pool, you would not want to take the risk since you want more miners coming in at a known rate. You might get more miners with PPLNS you might not. Can't run a business on might.

-Dave

[kano]

...
Can't run a business on might.

-Dave

... and yet the majority of businesses on the planet run on your definition of the word might.

The correct term of course is variance.

All I'm seeing here is comments about how miners have no business acumen and can't handle not getting the same income every day.
(as mentioned at the beginning of my first post) Interesting to see you confirm my post that was as much truth as comedy.

Wow, that's pretty shitty that you say miners are all like that, yet most if not all other businesses on the planet work on the fact that you will NOT get the same income every day.
Holidays, seasons, up turns and down turns in the market, even the day of the week affects businesses.

But miners can't handle that. Damn. Maybe all these miners that you and your biased pal are referring to need a single day in business school ... ?

Alas, ignorance of the meaning of the word 'variance'.

Variance means up and down.
Over time it averages out above due to lower fees (on large PPLNS pools).
...

I never really thought I'd have to explain English, but alas I'm not going to anyway.
It's there in back and white - I was quite clear about it.

Then this troll starts spreading lies again:

Someone is jealous because nobody uses their PPLNS pool and wants to convince people that variance is a good thing.

Of course he also goes and wastes those merit points to say "Hey someone agrees with me - heck I better throw them 4 merit points ... "

Not sure why are you forcing your opinion upon us and calling those who disagree with it "ignorant" you need to get off your high horse, this is not good for your health.

I'm pointing out your ignorance of the real world.
It's quite clear.
Since you don't want to live in the real world, that quite easily justifies the word 'ignorance'.

[mikeywith]

Of course he also goes and wastes those merit points to say "Hey someone agrees with me - heck I better throw them 4 merit points ... "
 

This is not how the merit system works, i merit posts that contribute to a good discussion even if i disgree with them or dislike the person posting them, i would still merit your posts but you do not participate in the merit system so those sMerit points will be wasted.

Since you don't want to live in the real world, that quite easily justifies the word 'ignorance'.

But you do not have to be rude, wndsnb is stating the same points as you are without being mean or rude to anyone, why is it so difficult for you to be nice?

You run a mining pool and being rude in a mining community is not helping your business at all, which is why i do not think anyone will take your advice related to business seriously.

Also judging by your attitude and how you managed to send away your clients to other pools and ended up being one of the smallest pools in the world despite having started long before most large pools makes you seem like a person who is not capable of giving business advice.

You really need to fix that attitude and stop calling people who disgree with you "ignorant". There is never a good excuse to call people such words.