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 Author Topic: Minimizing variance - a thought experiment  (Read 777 times)
64dimensions
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 July 21, 2014, 09:14:57 AM

There is a lot of comments about pool "bad luck". The following assumes that a block award is a random process.

1) Assume there are just five BTC pools with equal hashing power and you have ten miners. On average, every ten minutes one of the 5 pools will solve a block and receive 25 coins.
If you divide up your miners and assign 2 miners to each pool, collectively your 10 miners will get something on average every ten minutes.

2) Assume that four pools control 40%, 30%, 20%, and 10% respectively of the BTC hash rate, then you would assign 4 miners to the first, 3 miners to the second etc etc. Still every 10 minutes you would get something.

3) In the real world, variance can never reach this ideal because some fraction of the hash rate is off limits, but the concept is still the same, to minimize variance, you would try to proportionately to distribute your mining power to the available pools.

Sometimes the comment is made that ghash.io is lucky because they mine a lot of coins, while forgetting that they control 40% of the network hash rate. With 40% of the network has rate they should mine a lot of coins. So it's not correct to directly compare the coin output of Ghash vs BTCguild without adjusting for their hash rates.

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thew3apon
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 July 21, 2014, 09:53:45 AM

Actually when it come to pool mining "luck" its not that simple.

1) There may be some glitch on pool that have a portion of the share wasted.
2) There be some connection issues on the server and thus the reject is high (if it is only server side then you cannot see it).
3) Some pool operator might not be honest and have some "fake miner" mining.
4) The list goes on.....

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jjc326
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 July 22, 2014, 05:35:53 PM

I've thought about this in the past because I was on a pool about a year ago that had horrible luck for what I considered to be a long time.  Honestly, anyone mining with a pool is putting A LOT of trust in the owner - that they are being honest and they know what they are doing.  See the previous post to see some example of issues that could come up.  For me, if a pool has bad luck for like 2 weeks, I'd rather get out of there and try somewhere else, especially if the pool owner is not concerned and not looking into it.  Sure it could be variance but it seems like it almost NEVER had a "good luck" period to make up for the supposed bad luck.
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