Saturday, April 12, 2014

Crypto Mining: The Death of Multipool and Video Cards

Multipool mining used to be the way, the light, the true path. We'd laugh our asses off at the folks directly mining Bitcoin or Litecoin. It was so much more profitable to mine whatever currency was lowest difficulty (since while the difficulty was low, you could mine so much more of it) then trade it for bitcoin later. I can remember doing comparisons where with 200GH I'd make 0.033 bitcoin a day mining straight bitcoin, and a whopping 0.06 using a good multipool. Those days are gone now. Why? It all started with Kimoto Gravity Well (KGW).

KGW is a technology that automatically increases the difficulty of a coin when it notices a huge jump in the network hashrate. Like for example, ten multipools just switched to a coin to mine the piss out of it because the diff dropped and it's topping profitability. Now, this didn't kill off multipool completely. It took KGW two to five minutes to kick in. You could still make more profit mining multipool, but you'd have to use a better switchpool (like tompool) that allowed you to set a low coin switch speed (like 1 minute coin switches). But it changed things. Gone were the days of double profit. After KGW you might see 10-15 percent more profit over picking a good coin and solo mining it. But if you did your homework and picked five or six good looking coins, and balanced mined those coins, you could easily beat both mining bitcoin, and multipool. That's what I started doing. But multipool wasn't really dead yet. Then DigiShield happened.

So what's DigiShield? I'll let them explain it.

"We created DigiShield after seeing the threat that multi-pools pose to a crypto currency when they start mining a coin at a very low difficulty in relation to their net pool hash. This allows many coins to be quickly and easily mined before the difficulty increases. Once the difficulty increases the multi-pool leaves a coin, dumps the coins on the market, and then leaves the dedicated existing miners with a very high difficulty and very few new coins to be mined.  This leads to a drop in price and frustration among the committed community members  & miners of the affected coin.
DigiShield protects DigiByte against this threat and helps ensure greater confidence in any coin that implements it by allowing the difficulty to rise and fall almost perfectly in sync with increases or decreases in the net hash of a coin."

So what KGW half-accomplished, DigiShield finished with cold efficiency. Most new coins and most old ones already implement DigiShield, or will soon. And what this effectively means is no more free ride. No exploiting a "game mechanic". You mine your coins speculatively, and if you pick good ones you make bank. If you pick dumb ones, you don't. What I've done is set up a bunch of P2Pool servers and opened them to the public. I do the research, I pick smart coins, and I mine those coins. I'll do a post later with my current picks with explanations. Feel free to check out ahead of time if you want.

Your Typical Video Card Miner

Video card miners are all crying again, and for good reason. Video card mining is effectively dead. The latest and greatest ATI video card was just released, and it doesn't even matter. Not when a few 150 dollar Gridseeds can mine circles around it at half the cost and a tenth of the electric bill. If there were ever a bunch of whiny assholes that refuse to accept change, it's the GPU miners. They try everything to ruin the mining other people are doing with expensive ASIC hardware so..... only they can mine coins with their expensive hardware. It's the height of asshole hypocrisy. "Only my shit should work!". So they try custom algorithms that nobody care about. They make childish arguments for why only their unfair advantage should work. You can compare it to the assholes trying to suppress votes to win elections. And it doesn't matter. The only thing really killing crypto currency was the insta-mining happening with multipools, and that's effectively dead thanks to DigiShield. So most folks are ignoring the nutball video card miners and making new scrypt based coins anyway. Long live the ASIC.

The awesome cheap Gridseed ASIC Miner
That being said, it's a great time to get into hobby mining. You can pick up a Gridseed miner cheap from ZoomHash and do really inexpensive prospect mining, and enjoy it for the hobby it should be. And if you end up picking a winner you can make a few grand easy. I had a nice payday recently with Einsteinium (EMC2) because it looked like they were doing something meaningful by donating money to cancer research. Sure enough, a few weeks after starting mining it had gone up in value over 2000 percent. Can you go nuts with them? sure. You can buy 30 of the things if you want. But you can still have a good time with one of them, and it will eventually pay for itself. Plus, they look cool. That's always a good thing.

So essentially the "bad" things that have happened with crypto mining recently have served to punish the lazy and whiny, and reward the smart and patient. It's kinda the way it always should have been. Markets are stabilizing. Meaningful coins are free to reach their true potential. We win as end-users.

Love Ya,