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

[DaveF]

...
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.

Some business people will go for the safer if less profitable route, others will go for the chance of more profit with the possibility of smaller profit or loss.
Depends on their plan and view. Variance is great to say if you can really ride out the highs and lows. But if you can't then it can kill a business.

It also looks at stuff in a bubble. If you have been selling BTC from mining to cover bills and such and the PPLNS pool has a run of bad luck when the BTC prices spikes up what did that really cost you? Yes, I know the opposite is also true the pool could have had a run of good luck during the spike. But in the end a lot of businesses want known numbers coming in.

Side note but relevant:
The known numbers think is actually hurting a lot of small businesses. You are actually seeing that now in a lot of retail rental spaces in hot markets. Landlords will ask for stupid amounts of money for small businesses but give large corporate entities a much lower rent sometimes 1/3 of asking *not 1/3 off, but 1/3 of asking*. People see it as gouging the little guy, the owners see it as no matter what Starbucks is going to pay the rent for the next 7 years. Even if they decide the store is not working and close it, they will buy out the lease. They never heard of "DaveF mikeywith kano coffee" so lets charge them full asking price If they make it great, if not and they only last a year we got the money. Because if they don't make it, we don't know what the market will look like in a year and that place might stay vacant for a while till we can rent it again. And if they don't make it collecting from a small closed business is just about impossible. But you have many many landlords willing to have vacant space (PPS pool) or rent a much lower price (PPS+) then take the risk of unknown (PPLNS)

-Dave

[philipma1957]

And even large pools have had stupidly low months back to back .  Far beyond the actual odds allow.  Bitminter had back to back 99.9 cdf blocks in a 10 block run that had 60 or 7 90% cdf blocks. Very likely they were suffering from a withholding attack.  I left them.

Kano's first 1000 blocks were the opposite super good luck. Then in fall of 2017 that pools luck crumbled right when prices started to whale.

Neither pool was or is super big.  But BTC guild had huge issues and proven with holding attack as did Slush pool.  Finally ant pool with 20% of the entire mining gear had some terrible months.  Far worse then luck can explain. (so a possible attack)

Most people in this discussion are not considering that China could attack any pool with gear programmed to with hold blocks.

China to tell bitmain supply us with the gear and program it.

   The fact is badly programed gear has been proven to exist in the case of BTC Guild, and Slush Pool. Possible it was used against Kano pool back in 2017 maybe used against bitminter pool.  And I am sure that ant pool had a few super unlucky months back in 2016-2017 time period.

I will say this if you are a 10eh player
which is in s19's


10 x 100 = 1ph
1000 x 100 = 1eh
10000 x 100 = 10eh

you have say 1/17 of the network
you burn 10000 x 3.3 = 33000 kwatts or 33 megawatts
you could have your own pool which should hit 144/17 = 8.5 blocks in a day

I can see the argument for that player to self mine rather than pay 2.805 in btc every day to viabtc

but you have control it is all your gear so you know there are no bad actors.

current prices are 12k a unit cheapest price ever was 3k a unit so say 7.5 k x 10000 = 75,000,000 in gear add shipping and the buildings and this is about 25,000,000

So 100,000,000 gets you the 10eh

which pays 25.46 cents a th at viabtc or

25.46/.96 = 26.52 cents self mining

1 ph

$254.60 vs 265.20

1 eh

254600 vs 265200

10 eh

2,546,000 vs 2,652,000

Now if I was this kind of player

and I told viabtc I was pointing 10 eh at them

I would be certain I could get a better rate then 4% so the

  2,652,000
- 2,546,000
      106,000 daily cost  would be lowered to maybe 50,000

Most people don't realize the big players get better rates at pools

[wndsnb]

10 eh

2,546,000 vs 2,652,000

Now if I was this kind of player

and I told viabtc I was pointing 10 eh at them

I would be certain I could get a better rate then 4% so the

  2,652,000
- 2,546,000
      106,000 daily cost  would be lowered to maybe 50,000

Most people don't realize the big players get better rates at pools

And why wouldn't Viabtc give an even lower rate for the same hashrate on PPLNS? If they give a spectacular rate for PPS, they are taking even more risk. If they encourage those big clients to go PPLNS, then it reduces their total risk.

[kano]

Also, they lost a block the other day due to an orphan race ... so I guess they earn too much to care
(though that also reduces and FPPS/PPS+ they pay ... ...)

Reducing the fees on a larger *PPS* miner indeed increases their risk.
Being a large pool of course also means that risk is quicker to activate.
Well ... that does involve having someone who understand statistics ... so that also probably explains why ...

[philipma1957]

10 eh

2,546,000 vs 2,652,000

Now if I was this kind of player

and I told viabtc I was pointing 10 eh at them

I would be certain I could get a better rate then 4% so the

  2,652,000
- 2,546,000
      106,000 daily cost  would be lowered to maybe 50,000

Most people don't realize the big players get better rates at pools

And why wouldn't Viabtc give an even lower rate for the same hashrate on PPLNS? If they give a spectacular rate for PPS, they are taking even more risk. If they encourage those big clients to go PPLNS, then it reduces their total risk.

A large miner may not want the variance risk of pplns.

remember that witholding / accidental bad software has hit pools for large amounts of coins.

A pps+ pool paying a big player daily means no variance risks.

the risk for that player is one days payment maybe two. as they would simply pick up and move to a different pool.

also when doing projections pps will have more stability.

and as I said if a big player is sending a lot of hash to viabtc and insists on pps+ vs pplns I am thinking viabtc may take on the big guy and give him what he wants.

[wndsnb]

A large miner may not want the variance risk of pplns.

remember that witholding / accidental bad software has hit pools for large amounts of coins.

A pps+ pool paying a big player daily means no variance risks.

the risk for that player is one days payment maybe two. as they would simply pick up and move to a different pool.

also when doing projections pps will have more stability.

and as I said if a big player is sending a lot of hash to viabtc and insists on pps+ vs pplns I am thinking viabtc may take on the big guy and give him what he wants.

This still just makes no sense to me. The "risk" we're talking about is getting >2% less reward in a year once every 10 years. So for the small guy, you'd pay an additional 2% all 10 years to avoid paying 2% 1 out of 10?

For the big guy, they'd pay maybe an extra 0.5% or 1% 10 out of 10.

0.5% for 500PH is ~$325K a year in today's conditions.

So the same guy that is putting up 10s of millions to buy miners, infrastructure, power contracts, etc..., in a brand new super volatile market, is worried enough about 2% less once in 10 years to pay $325K every year?

Mining is a risky business... it just doesn't make sense to me to give up so much profits for a "drop in the bucket" of additional risk.

[philipma1957]

A large miner may not want the variance risk of pplns.

remember that witholding / accidental bad software has hit pools for large amounts of coins.

A pps+ pool paying a big player daily means no variance risks.

the risk for that player is one days payment maybe two. as they would simply pick up and move to a different pool.

also when doing projections pps will have more stability.

and as I said if a big player is sending a lot of hash to viabtc and insists on pps+ vs pplns I am thinking viabtc may take on the big guy and give him what he wants.

This still just makes no sense to me. The "risk" we're talking about is getting >2% less reward in a year once every 10 years. So for the small guy, you'd pay an additional 2% all 10 years to avoid paying 2% 1 out of 10?

For the big guy, they'd pay maybe an extra 0.5% or 1% 10 out of 10.

0.5% for 500PH is ~$325K a year in today's conditions.

So the same guy that is putting up 10s of millions to buy miners, infrastructure, power contracts, etc..., in a brand new super volatile market, is worried enough about 2% less once in 10 years to pay $325K every year?

Mining is a risky business... it just doesn't make sense to me to give up so much profits for a "drop in the bucket" of additional risk.

Like I said many large pools have had long streaks of “bad” luck

There is no bad luck with pps+

If you are earning 100,000 a month and burning 95,000 during tight times your profit is 5 k

Now if you have variance you easily can drop under and into the red with bad luck.

Running at 95% luck will make you at a loss.

Although  if things are good like right now and you want to risk variance the profit margin will cover it.

[mikeywith]

@wndsnb I think the missing point here is the short-term variance, of course, if you measure PPLNS vs PPS against infinity then this whole discussion would be useless and PPLNS is the winner.

I went out of my way to test this in real-life and pointed about 800TH to viabtc PPLNS just for the sake of this topic, here is a week-long sample starting from 2021-12-12 to 2021-12-18, and here are my earnings:

Day                             Total
2021-12-18      0.00348205
2021-12-17      0.00421592
2021-12-16      0.0034405
2021-12-15      0.00372157
2021-12-14      0.00352051
2021-12-13      0.00221123
2021-12-12      0.0042225

on the 19th we had some cleaning and maintenance going on, and during that, I switched that 800th back to PPS+ and got the following:

Day                              Total                      
2021-12-21      0.00422157                
2021-12-20      0.00446968                


So it's an average 0.0035 PPLNS vs 0.0043 PPS+ , of course, 20 and 21 were likely lucky days for viabtc ("see the irony"?) and that's why the rewards were 0.00440, but still the base "promised," hashrate you get is almost always identical to what their PPS calculator which shows 0.00403BTC, so even if we were to work with that number I would still get at least 0.02821BTC in that week as opposed to 0.02481428 on PPLNS so that's a total "temporary loss" of 0.0033957 or 166$ based on current exchange rate.

** I know 7 days vs 2 days isn't exactly accurate which is why I used 0.00403 and not 0.0043.


Ya I know next month or next week I will likely have a week that nets me 0.0033957*2 - 2% in fees and that I will be earning more in the long run but is it really worth it when all I have to pay is 0.00008064   BTC a week ( at current diff for 800th )?  

Obviously, I can't answer for everyone, but to me, having a day like the 13th where I got only half the rewards I could get on PPS pisses me off slightly, a week like this would really piss me off as I would have been -$444 if I pointed all my miners to PPLNS.

It's not like next week is guaranteed to be a good week that would put me back at breakeven, my accumulative "temp loss" or "lost opportunity" could be in the thousands of dollars for God knows how long, I know I likely won't be mining for 10 years, maybe not even a whole more year, so all these theoretical calculations make no sense to me personally.

The other point is that I use almost MOST of the mining rewards as they come, I can not tolerate short-term variance, this doesn't have to make sense to everyone but I know enough people can relate.

[kano]

Funny how people have no idea about statistics and report PPLNS as worse than PPS due toi selecting a time when the varinace was down

Yeah no chance PPLNS could be higher than PPS, not possible, they have ... ... lower fees ... ... oh wait, hang on somethings a miss in all this.

And the answer 'but this is real data' shows even a lesser understanding of statistics.

As I said, variance is simply up and down, not down, but of course you can pick a period when it's down and make up bullshit excuses.

[mikeywith]

Yeah no chance PPLNS could be higher than PPS, not possible, they have ... ... lower fees ... ... oh wait, hang on somethings a miss in all this.

And the answer 'but this is real data' shows even a lesser understanding of statistics.

I did not cherry pick the period,  I made the test because of this topic, I know the data could have given better results than PPS, but it also shows how great short term variance is, and it clearly shows the PPLNS sucks short term as shown in my data.

The numbers are what they are, your understanding of statistics has exactly zero value to me and my earnings, PPS+ has little variance and everyone should be using them if they want steady payouts which I believe the most folks are doing regardless of your useless statement.

After all, who would take a business mining advice from you given how terribly you failed managing a mining pool business despite having early mover advantage?  

[kano]

blah blah blah ... I don't understand statistics ... blah blah blah

Try learning a little rather than showing how clearly you have no idea what you are talking about:
(If you can understand it ...)
https://kano.is/index.php?k=poisson

... and some magic words you clearly have no idea about: sample size

Edit: in fact I'll point out the obvious.
Since I've explained all this so many times ... (yes I am one of the few in bitcoin who seems to really have any idea about all this)
Go find a university somewhere.
Go on that massive trek across deserts and mountains, and find someone you think in knowledgeable about statistics.
Go ask them to explain it to you so that you are not posting silly comments: that show to the few who do know the topic, that you clearly do not.

[mikeywith]

You are a waste of time honestly, I would suggest that instead of wasting your time and everybody else's here showing off your understanding of statistics you should learn some business skills and try to revive your dead pool because apparently known of your alleged fields of expertise did you any good regarding your whole bitcoin business career, it also has to do with your attitude although I am not sure you can fix that just by reading some online books.

Meanwhile, I am putting you on ignore since I don't need the extra negativity coming from a random person online.

[HagssFIN]

Kano you don't have to go personal, be the bigger person...

Merry xmas everyone and please set the pool arguments aside for a while, and enjoy your time with family etc.

[kano]

... regarding your whole bitcoin business career ...

I don't have a bitcoin business career.

My bitcoin interest has been writing code, helping people for free, having fun and telling people about bitcoin.
While doing so, I'm very critical of scammers and stupidity.

Just so happens that I made 'me' some BTC along the way also, that now happens to be priced ridiculously high.
Until this happened, I had been broke for a long time - but that never bothered me.
Now I'm running a pool at a loss, not a problem, the pool made the BTC paying to run it anyway.

Kano you don't have to go personal, be the bigger person...

Merry xmas everyone and please set the pool arguments aside for a while, and enjoy your time with family etc.

Not sure how you can say that after the last few posts of the guy who - lol - also 4 point meritted your post ...
I don't want merit points, but I love how he's apparently a merit source but uses them as an agenda against people
I've explained it to him even many times, it gets annoying ...

[HagssFIN]

For clarity, I don't want to take sides here and I don't care about merits in use such as this.

I just really hate, also in arguments related to my daily job, when people go personal with the arguing. Things too often go off rails to emotional level.

[mikeywith]

I merited your post because of this

Merry xmas everyone and please set the pool arguments aside for a while, and enjoy your time with family etc.

You make perfect sense, like what the hell am I doing here arguing about something knowing very well that nothing of value is going to come out of it, might as well just enjoy my time and not waste it in such a discussion, which is why I put him on ignore so that I don't have to end up having personal arguments with him that doesn't serve this forum in any way.

Happy new year.

[Artemis3]

The large American invite only pools are pplns are they not? The ones currently ranking with the most hashrate...