Open questions to miners

[coinsolidation]

Please let me make clear that I ask these with the best intentions.

1. Why do multiple miners all scramble for coins as soon as it is launched?
The block rewards received are proportional to your percentage of the network hashrate, not the difficulty, so it confuses me.

2. Why do many people mine to sell immediately, or use multipools?
It stands to reason the each coin varies in price over time, and if you wait for the optimal time or to hit a certain target then you will achieve a greater profit. Or better pick a coin you want to hold and mine that, taking out only expenses as you need to cover them.

I'd like to thank anybody in advance who takes the time to give a considered reply.

Mark

[Bombadil]

1) Many coins don't have a long lifespan. Most don't even survive the first month! So that's why all miners scramble to get it asap.
Also, your wrong. The amount of rewards depend on the difficulty. The difficulty decides, well, how difficult it is to crack a block. Bitcoin itself has a seriously slow difficulty re-targeting in comparison to most altcoins, so regularly the average blocktime is less than the proposed 10min, because net hashrate is actually higher. When it does retarget, it looks a lot more accurate to actual net hashrate.

2) People who mine and sell at deposit probably aren't doing that well, agreed. But if you have a coin that only has a short-term pump, you better be one of the first to sell asap on peak. Multipools actually do this. They weigh the difficulty, blockreward and market prices together and mine&sell when it's really the most profitable.
Not all coins do well if you hold them, for example, a month. You'd be surprised how few do that. So take your own risk if you want to hold But indeed, holding is a viable strategy, but make sure you know what you're doing. 

[djm34]

1) Many coins don't have a long lifespan. Most don't even survive the first month! So that's why all miners scramble to get it asap.
Also, your wrong. The amount of rewards depend on the difficulty. The difficulty decides, well, how difficult it is to crack a block. Bitcoin itself has a seriously slow difficulty re-targeting in comparison to most altcoins, so regularly the average blocktime is less than the proposed 10min, because net hashrate is actually higher. When it does retarget, it looks a lot more accurate to actual net hashrate.

2) People who mine and sell at deposit probably aren't doing that well, agreed. But if you have a coin that only has a short-term pump, you better be one of the first to sell asap on peak. Multipools actually do this. They weigh the difficulty, blockreward and market prices together and mine&sell when it's really the most profitable.
Not all coins do well if you hold them, for example, a month. You'd be surprised how few do that. So take your own risk if you want to hold But indeed, holding is a viable strategy, but make sure you know what you're doing.  

Actually multipools don't sell on peak, they switched to a coin when it gets pumped.
Meaning the time the coin is mined and sold on an exchange, the pump is usually over...  
and basically you mined for scrap and have contributed in killing that coin since the multipools always sell no matter the price...
(Am I the only one who really understand why multipool aren't profitable at all ?)

[coinsolidation]

Thank you for your reply.

Also, your wrong. The amount of rewards depend on the difficulty.

This is what concerns me, the difficulty reflects the estimated target hashrate so that blocks are created according to the schedule.

Consider a coin with a target block time of 2 minutes. You can work out the required hashrate from the difficulty as follows:

Difficulty 16: (16*(2^32))/120 = 572662306.133, or 572.6 MH/s
Difficulty 32: (32*(2^32))/120 = 1145324612.27, or 1,145 MH/s

If the network hashrate is 1145MH/s at both difficulties, and you have 10% of the hashrate, then you will receive 10% of the blocks at both difficulties.

If you scramble for the blocks all at the start you will not get more, rather you will get some slightly faster (or not because of orphans), and then later find you cannot get many at all because the difficulty is too high, or that you still get 10% but you have to hash for much longer.

In the end it means that any fractional gains from mining the first blocks at a lower difficulty are negated by having to spend longer hashing at the higher difficulty.
The effect is further compounded by any dump, as the later expensive to mine blocks take a much greater financial penalty, often resulting in loss.

2) But if you have a coin that only has a short-term pump, you better be one of the first to sell asap on peak.

Why would you do this? Surely if you pick a reasonable coin with some future to it, and mine it for a longer period of time, then your resulting risk is greatly reduced, and chance of fair profit greatly increased.

and basically you mined for scrap and have contributed in killing that coin since the multipools always sell no matter the price...
(Am I the only one who really understand why multipool aren't profitable at all ?)

Exactly, by doing so you simply drive the market price towards the cost of production resulting on no profit or a loss.

[Bombadil]

Are we going to talk about ethics here? There are none on the crypto markets and there should never be need of it. A true free market (too bad govs think otherwise).
Most pumps are artificially created anyway, multipools and tradebots make sure that pump is flattened out. If your coin can't survive the onslaught of such "unethical stuff", well, then maybe the coin doesn't have a future at all.

Also, what if I mine the most profitable coin, sell that, and buy that "long-term coin"? That way I can get more preferred coins than I would if I mined it directly. That's called trading.

I'm not the one going around telling lies on how people should hold coins, I thought that myself for a long time, but came to realize that many people who tell me to hold, are the ones dumping on my buy-orders. You should hold when you feel like it, but not if the risk is too great for your taste. Make up your own mind but be careful.

A good multipool has a good tradebot You can clearly see the differences over at http://poolpicker.eu, some pools only payout half of what others do.

[coinsolidation]

Also, what if I mine the most profitable coin, sell that, and buy that "long-term coin"? That way I can get more preferred coins than I would if I mined it directly. That's called trading.

That's a valid pattern I'm certainly not disputing, if it is more effective do it.

You should hold when you feel like it, but not if the risk is too great for your taste. Make up your own mind but be careful.

I agree, what you say there seems rational, my question was more to those who just run at any coin, even if it only has a 2 line announcement, and mine it. Seems more gambling than informed decision making? if that is a fair comment to make.

[Starscream]

I agree, what you say there seems rational, my question was more to those who just run at any coin, even if it only has a 2 line announcement, and mine it. Seems more gambling than informed decision making? if that is a fair comment to make.

Is it really gambling?

Most altcoins are created for the sole purpose of being pumped, and then dumped, so it is safe to assume that any given coin will reach a point that it will have been profitable (very profitable even) if you mined it early on, especially since the alt-coin scene is heavily manipulated by pool ops, exchanges and big farms - they are actually standing behind most altcoins that are being created.

[Amph]

basically almost every coin is created to be converted in btc, there is no other reason

[goodluckpool]

you need to grab a piece of the action early before the pump is over and the dump starts

[goodluckpool]

1) Many coins don't have a long lifespan. Most don't even survive the first month! So that's why all miners scramble to get it asap.
Also, your wrong. The amount of rewards depend on the difficulty. The difficulty decides, well, how difficult it is to crack a block. Bitcoin itself has a seriously slow difficulty re-targeting in comparison to most altcoins, so regularly the average blocktime is less than the proposed 10min, because net hashrate is actually higher. When it does retarget, it looks a lot more accurate to actual net hashrate.

2) People who mine and sell at deposit probably aren't doing that well, agreed. But if you have a coin that only has a short-term pump, you better be one of the first to sell asap on peak. Multipools actually do this. They weigh the difficulty, blockreward and market prices together and mine&sell when it's really the most profitable.
Not all coins do well if you hold them, for example, a month. You'd be surprised how few do that. So take your own risk if you want to hold But indeed, holding is a viable strategy, but make sure you know what you're doing.  

Actually multipools don't sell on peak, they switched to a coin when it gets pumped.
Meaning the time the coin is mined and sold on an exchange, the pump is usually over...  
and basically you mined for scrap and have contributed in killing that coin since the multipools always sell no matter the price...
(Am I the only one who really understand why multipool aren't profitable at all ?)

djm34: love your miner, the best! thanks!

[tampazeus]

2. Why do many people mine to sell immediately, or use multipools?
It stands to reason the each coin varies in price over time, and if you wait for the optimal time or to hit a certain target then you will achieve a greater profit.

Waiting for optimal time seems gambling to me, the dump can come anytime and you might be left with bunch of worthless coins. When you mine most profitable coin and sell immediatelly you have guaranteed small profit from mining, no risk here

[ajareselde]

Please let me make clear that I ask these with the best intentions.

1. Why do multiple miners all scramble for coins as soon as it is launched?
The block rewards received are proportional to your percentage of the network hashrate, not the difficulty, so it confuses me.

2. Why do many people mine to sell immediately, or use multipools?
It stands to reason the each coin varies in price over time, and if you wait for the optimal time or to hit a certain target then you will achieve a greater profit. Or better pick a coin you want to hold and mine that, taking out only expenses as you need to cover them.

I'd like to thank anybody in advance who takes the time to give a considered reply.

Mark

People are mining coins at launch, believing they will get alot of coins fast due to low diff, but actualy, it has been prooven that waiting a week or two before starting to mine seams to be the golden spot.
And "why do people use multipools and sell right away" , well its simple; they dont want to risk their profits and gamble away their earnings.
99% of altcoins die relatively fast, so its in miners best interest not to get burned when that happens.

Cheers

[indiguy]

basically almost every coin is created to be converted in btc, there is no other reason

probably. there are some however which is almost proprietary like zeitcoin.