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Question: What method of mining would you prefer AM to use?
Solo-ming - 24 (34.8%)
Joining an established pool - 0 (0%)
Create their own pool - 20 (29%)
P2P - 25 (36.2%)
Total Voters: 69

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Author Topic: AM Self-mining  (Read 3127 times)
Mabsark
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July 30, 2014, 11:20:13 PM
 #1

When AM's percentage of the network hashrate fell to near 0, solo-mining was pretty much a waste of time resulting in no dividends. So how would you prefer AM's mine to operate?
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CanaryInTheMine
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July 30, 2014, 11:25:10 PM
 #2

When AM's percentage of the network hashrate fell to near 0, solo-mining was pretty much a waste of time resulting in no dividends. So how would you prefer AM's mine to operate?
that depends on the total hashing power
Swordsoffreedom
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July 30, 2014, 11:34:46 PM
 #3

When AM's percentage of the network hashrate fell to near 0, solo-mining was pretty much a waste of time resulting in no dividends. So how would you prefer AM's mine to operate?
that depends on the total hashing power

Yep I would prefer solo mining but I need to know how much hash they operate with
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July 30, 2014, 11:44:08 PM
 #4

A pool just for AM and AM shareholders.
They could have a membership card - and make mankinis mandatory.
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July 31, 2014, 12:06:15 AM
 #5

DeathAndTaxes released a nice comparison/calculation today at which percentage of the total hash rate it is starting to make sense to solo-mine:

It all comes down to how much time you are willing to accept between paydays and how much variance.  Remember bitcoin mining is a poisson distribution ( http://stattrek.com/online-calculator/poisson.aspx ).  Lets assume you are not willing to go one difficulty period without finding a block.

If you have 1/2016th (0.05%) of the network you should find on average 1 block per difficulty period.
Expected = 1 block
Probability of 0 blocks = 36.7%
Probability of 1 bock =  26.4%
Probability of 2+ blocks = 36.7%

You have a ~1 in 3 chance of doubling (or more) your return but also a ~1 in 3 chance of earning nothing. That is probably more risk than most miners are willing to take.

If you have 2/2016th of the network (~0.1%) you should find on average 2 blocks per difficulty period.
Expected = 2 blocks
Probability of 0 blocks = 13.5%
Probability of 1 block = 27.1%
Probability of 2+ blocks = 59.4%

Looking better but lets look at 5 times as much hashrate, 10/2016th of the network (0.25%).

If you have 10/2016th of the network (~0.5%) you should find on average 10 blocks per difficulty period.
Probability of 0 blocks = ~0% (1 in 22,026)
Probability of 1 to 5 blocks = 6.7%
Probability of 6 to 9 blocks = 39.1%
Probability of 10+ blocks = 54.2%

So less than a 7% chance of earning less than half of expected.  How about a nice even 1% of the network.

If you have 20/2016th of the network (~1%) you should find on average 20 blocks per difficulty period.
Probability of <6 blocks = ~0% (1 in 13,906)
Probability of 7 to 13 blocks = 6.6%
Probability of 14 to 19 blocks = 45.9%
Probability of 20+ blocks = 52.9%

Now we are looking good.  Only 7% chance of earning less than 70% of expected.  Of course your risk tolerance will vary but the same distribution can be done at any percentage of the network.  As the difficulty growth goes down you may not necessarily care about how many blocks in each difficulty period but rather how many blocks per month since the powerbill is due each month.  There are ~4,320 blocks per month which means the probability of extremely bad or good luck over that longer period of time decreases (quite a bit).

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July 31, 2014, 03:33:51 AM
 #6

Needs another option: Bigger than Ghash.  Wink
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July 31, 2014, 05:07:32 AM
 #7

Lets not make the same mistakes ghash.io and others made. I hope AM can be a good steward for Bitcoin and use P2Pool.
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July 31, 2014, 11:42:24 AM
 #8

Lets not make the same mistakes ghash.io and others made. I hope AM can be a good steward for Bitcoin and use P2Pool.

I think we don't have to worry about AM achieving even near 50% of the total hash rate right now. We can be more than pleased if we achieve 10% right now. But yeah, if they decide to use a pool, looking into P2Pool would be nice.

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Mabsark
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July 31, 2014, 12:04:36 PM
 #9

DeathAndTaxes released a nice comparison/calculation today at which percentage of the total hash rate it is starting to make sense to solo-mine:

It all comes down to how much time you are willing to accept between paydays and how much variance.  Remember bitcoin mining is a poisson distribution ( http://stattrek.com/online-calculator/poisson.aspx ).  Lets assume you are not willing to go one difficulty period without finding a block.

If you have 1/2016th (0.05%) of the network you should find on average 1 block per difficulty period.
Expected = 1 block
Probability of 0 blocks = 36.7%
Probability of 1 bock =  26.4%
Probability of 2+ blocks = 36.7%

You have a ~1 in 3 chance of doubling (or more) your return but also a ~1 in 3 chance of earning nothing. That is probably more risk than most miners are willing to take.

If you have 2/2016th of the network (~0.1%) you should find on average 2 blocks per difficulty period.
Expected = 2 blocks
Probability of 0 blocks = 13.5%
Probability of 1 block = 27.1%
Probability of 2+ blocks = 59.4%

Looking better but lets look at 5 times as much hashrate, 10/2016th of the network (0.25%).

If you have 10/2016th of the network (~0.5%) you should find on average 10 blocks per difficulty period.
Probability of 0 blocks = ~0% (1 in 22,026)
Probability of 1 to 5 blocks = 6.7%
Probability of 6 to 9 blocks = 39.1%
Probability of 10+ blocks = 54.2%

So less than a 7% chance of earning less than half of expected.  How about a nice even 1% of the network.

If you have 20/2016th of the network (~1%) you should find on average 20 blocks per difficulty period.
Probability of <6 blocks = ~0% (1 in 13,906)
Probability of 7 to 13 blocks = 6.6%
Probability of 14 to 19 blocks = 45.9%
Probability of 20+ blocks = 52.9%

Now we are looking good.  Only 7% chance of earning less than 70% of expected.  Of course your risk tolerance will vary but the same distribution can be done at any percentage of the network.  As the difficulty growth goes down you may not necessarily care about how many blocks in each difficulty period but rather how many blocks per month since the powerbill is due each month.  There are ~4,320 blocks per month which means the probability of extremely bad or good luck over that longer period of time decreases (quite a bit).

The problem with calculations like that is that they assume static conditions, which is not the case for mining. For example, you could start a difficulty round with 1% of the network hash rate and end the round with 0.1%, in which case, the probability of mining 20 blocks would be far less than 52.9% and would be close to 0%. This is what we saw as AM's gen 1 mine was winding down and is why the dividends stopped.
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July 31, 2014, 12:06:06 PM
 #10

Lets not make the same mistakes ghash.io and others made. I hope AM can be a good steward for Bitcoin and use P2Pool.

I think we don't have to worry about AM achieving even near 50% of the total hash rate right now. We can be more than pleased if we achieve 10% right now. But yeah, if they decide to use a pool, looking into P2Pool would be nice.
If they move to P2Pool it will be great because P2Pools variance would lower massively, allowing others to move there too.


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July 31, 2014, 12:15:30 PM
 #11

Lets not make the same mistakes ghash.io and others made. I hope AM can be a good steward for Bitcoin and use P2Pool.

I think we don't have to worry about AM achieving even near 50% of the total hash rate right now. We can be more than pleased if we achieve 10% right now. But yeah, if they decide to use a pool, looking into P2Pool would be nice.
If they move to P2Pool it will be great because P2Pools variance would lower massively, allowing others to move there too.



This. AM and PETA should transition to p2pool, should be a strong catalyst in pushing smaller operations and independent miners towards a more decentralised mining ecosystem -- the publicity alone should start off a slight snowball effect.

Mabsark
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July 31, 2014, 12:22:59 PM
 #12

If anyone is familiar with P2Pool, could then give an overview of the pros and cons?
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July 31, 2014, 12:23:14 PM
 #13

Protip:  If you would like to keep Bitcoin mining decentralized, don't invest in mining companies.
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July 31, 2014, 12:35:34 PM
 #14

Lets not make the same mistakes ghash.io and others made. I hope AM can be a good steward for Bitcoin and use P2Pool.

I think we don't have to worry about AM achieving even near 50% of the total hash rate right now. We can be more than pleased if we achieve 10% right now. But yeah, if they decide to use a pool, looking into P2Pool would be nice.
If they move to P2Pool it will be great because P2Pools variance would lower massively, allowing others to move there too.



Exactly, that's a great side-effect! P2Pool needs some big mining enterprises in order to gain a lot of traction and achieve a lower variance! Maybe GHash.IO can switch some of its hashing power over there Tongue

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July 31, 2014, 12:36:56 PM
 #15

Lets not make the same mistakes ghash.io and others made. I hope AM can be a good steward for Bitcoin and use P2Pool.

I think we don't have to worry about AM achieving even near 50% of the total hash rate right now. We can be more than pleased if we achieve 10% right now. But yeah, if they decide to use a pool, looking into P2Pool would be nice.
If they move to P2Pool it will be great because P2Pools variance would lower massively, allowing others to move there too.



This. AM and PETA should transition to p2pool, should be a strong catalyst in pushing smaller operations and independent miners towards a more decentralised mining ecosystem -- the publicity alone should start off a slight snowball effect.

I guess PETA already voted in favor of doing exactly this. At least the shareholder have done so. I guess there was some incompatibility problem with their software, hardware or something that made them delay their plans. I don't know if it really is true, though.

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July 31, 2014, 12:41:15 PM
 #16

If anyone is familiar with P2Pool, could then give an overview of the pros and cons?

I'm not that familiar, so please someone fill in the gaps or correct me. But basically, you have a somewhat decentralized pool where people join like any other pool. The catch is that they have their own mini-blockchain that has a difficulty that's ajusted in a way that a new block is being found every 30 seconds. If they find a block that has a hash that's low enough for the real blockchain, they submit that block and the previous miners of the p2pool are being paid according to their contribution to the pool's blockchain.
https://en.bitcoin.it/wiki/P2Pool

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July 31, 2014, 12:58:18 PM
 #17

Protip:  If you would like to keep Bitcoin mining decentralized, don't invest in mining companies.
I have to agree with Lambchop here.

That being said, if two mining companies at 10 + 1% respectively are mining on P2Pool, and then a large chunk of the network joins in... that would be good.

What I think is missing that the moment though is a proxy into P2Pool, so instead of a simple node that pays out directly to your address, one that accepts the payment itself and breaks up PoW to its users so that smaller miners can enjoy P2Pool, without waiting a month for a single share.

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July 31, 2014, 01:45:15 PM
 #18

Protip:  If you would like to keep Bitcoin mining decentralized, don't invest in mining companies.
I have to agree with Lambchop here.

That being said, if two mining companies at 10 + 1% respectively are mining on P2Pool, and then a large chunk of the network joins in... that would be good.

What I think is missing that the moment though is a proxy into P2Pool, so instead of a simple node that pays out directly to your address, one that accepts the payment itself and breaks up PoW to its users so that smaller miners can enjoy P2Pool, without waiting a month for a single share.

So you're basically saying we need p2pool-pools in order to successfully mine there? This this some fractal-stuff or recursion right there! Cue the Dawg memes...

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MrWDunne
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July 31, 2014, 01:47:55 PM
 #19

Protip:  If you would like to keep Bitcoin mining decentralized, don't invest in mining companies.
I have to agree with Lambchop here.

That being said, if two mining companies at 10 + 1% respectively are mining on P2Pool, and then a large chunk of the network joins in... that would be good.

What I think is missing that the moment though is a proxy into P2Pool, so instead of a simple node that pays out directly to your address, one that accepts the payment itself and breaks up PoW to its users so that smaller miners can enjoy P2Pool, without waiting a month for a single share.

So you're basically saying we need p2pool-pools in order to successfully mine there? This this some fractal-stuff or recursion right there! Cue the Dawg memes...

Pretty much, well. At least for smaller miners to mine there.

The good thing about it though, is because its still all contributing to one central ledger it doesn't matter if a sub-pool only has 0.5% of the p2pool network, it would still be usable.

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July 31, 2014, 02:00:08 PM
 #20

Protip:  If you would like to keep Bitcoin mining decentralized, don't invest in mining companies.
I have to agree with Lambchop here.

Lambchop is saying that people shouldn't invest in AM. Do you really agree with that or did you just not understand what he was saying?
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