Topic: Anti solo mining myths debunked - page 2. (Read 12294 times)

The poo doesn't get bigger due to magical pixie dust. It gets bigger due to hashpower being added, same way solomining gets biggerr.


By using the words "on average" you make your statement completely incorrect as many have pointed out here.

It's fine to say that there is increased risk of higher or lower payouts, and the low payouts matter more to you because they'll put you out of business (or the higher means less because you somehow don't need more coin(??))... and thus on average solo has lower utility for you, but that lower utility != less btc _on average_.

@googlebot :

I assume you are mining just for fun or shits n giggles. You mention you only have one HD5870 and solomine, good for you.

Alot of us do not try and achieve the gambling man orgasm while mining for bitcoins, alot of us have legit reasons for running their miners as a business with realistic daily/weekly and monthly income projections. It would be a self destructive decision for alot of users on a big pool to move into solo mining.

Most important part about solomining that seems to be overlooked regarding the higher variance is the fact that the higher variance isnt on a scale of 1-10 with pooled mining at 2 and solomining on 8. As the difficulty increase, the variance gap between pooled and solo increases even further thus the statistical variance being discussed here would reset at every difficulty increase and the gap between pooled mining and solomining just keeps widening. This wouldnt be the case if every difficulty increase also came with higher payout per block but that is obviously not the case cause it would be counter intiative with regards to difficulty increase. Also it variance wouldnt increase if you increase your solomining hardware to counter the difficulty increases, then you could keep adding the probabilities of variance from one difficulty to the other.

Pooled mining takes mostly care of this on the bigger pools, at every difficulty increase the mining pools see an increase in hashing power. Solo miners typically dont get more hashing power for every difficulty increase.

That said, if I had atleast 20% of deepbit's hashing power for myself then I might consider soloming, even then it would be riskier outcome than sticking with deepbit/btcguild or slushpool simply cause of the hashing numbers game available on these pools.

So my conclusion, solomining on a realistic timeframe will on average produce less BTC for miners than pooled mining and thats why I agree with the wiki's statement about this.

and that is exactly why pools exists

The difference between actual and theoretical doesn't matter for the average profit as long as the risk to fall below average is exactly as high as the chance to end up above it, which is the case here. The only difference is the variance in particular case, which might be much higher for solo miners, but not their average return. When the risk to never find a block increases (increasing difficulty), the average payout of pools decreases by the same magnitude. A particular miner might never find a block or win the lottery, but on average all solo miners together have a higher return than all pool miners together (if you exclude the pool operators).

For the record: after cashing out, I could identify the block I have mined, it is http://blockexplorer.com/b/133035.

googlebot1: Nope. The ideal 50:50 state can only be reached with an infinite number of samples. The actual occurences converge to the statistical value of "50% chance" on a coin toss. However, at any point before infinity (and I dare you try to reach infinity ) there's also always the possibility (however small - or not) that there's a deviation from the ideal statistical ratio.

How else would a pool be able to say "oh, we're +20% on luck over the last 24 hours" or "-2% (= unluckier) during the last difficulty"? Although all events are unrelated and have the same probability, the real occurences will be much closer to average the bigger the sample gets. So although the theoretical average is 50/50, the actual average might be completely different. Think 10-times heads in a row. It's unlikely, but if your sample happens to be those 10 events, your average is not 50/50.

Real world example: My miner was offline for a couple of hours this night. Those were quite "lucky" hours, meaning the occurences of blocks were more than expected if you just use "ah, yeah, current difficulty - you should come up with a block per Gigahash every 16.5 hours". Now, being reconnected, the "luck" is below average so it would have been - in hindsight - advantageous to mine during the hours I was offline and have it offline now (although 24/7 operation would of course be superior to both).

tl;dr: So, yeah, the average is always the average but that does not mean you (or a pool) cannot perform above or below average. That's exactly why you got your block.

all this topic is about people who want to get rich fast

i mined around 1000 btc since february 27th in deepbit, which is 20 blocks, while in settings i'm informed that my miners generated 18 blocks

it can't be compared directly to solo mining, but even if we assume that i would be lucky enough to generate two blocks more in solo mining (as i would not be affected by any deepbit technical difficulties) i would still missed some of pools features ie. detailed informations about my miners downtime, notification about them going down etc.

for average miner there is no difference between solo and pool mining in log run, period.

You just cite economic tenets, which do not really apply here. No interest is paid on the actual possession of Bitcoins, so early crediting does not improve profits. Maybe you understand it, when you look at an opposite projection: falling USD/BTC and difficulty. By your logic solo mining would become more profitable, because your probability to find a block would be shifted into the future into lower difficulty territory (just as the higher difficulty territory in your projection). Both projections are false. Solo and pooled mining have identical returns on average with a slight advantage due to fees and less stale shares for solo mining.


This really shows the barricade in your mind pretty nicely. On a small scale the average return is 50/50, just as in the large scale. The chances for loss and profit balance each other out exactly. Variance is variance, limiting it may have value to some, but it hasn't anything to do with average return.

I think you have the "Law of Averages" backwards.
Quite the opposite of what you are suggesting.

Anywho, the cases are not precisely the same. There is a difference in valuing what you already possess against what you can potentially gain, against what you can potentially gain vs. what you can definitely gain.

Furthermore going back to the original point, all statistical probability requires a large sample, in the case of mining bitcoins, this sampling is time.  If I flip a coin one time I have a 50/50 chance of either result. If I flip it twice, same thing. By your logic no matter how many times I flip it, betting on heads will yield the same results, which is completely untrue. Given a large enough pool of flipping it will come out 50/50. But on a small scale betting heads every time can yield profit, or loss. Large numbers and small numbers are not equivalent.

I don't really want to get into the mathematics because while I have a decent handle on it, it's not a current enough aspect of my life that I can whip out equations off the top of my head. But rest assured that while statistically independent events are not the same as mutually exclusive events.  Events that are independent can in theory either never or always occur, so why does this not actually happen given Big samples? Something to think about.

The two cases are precisely the same, it's just more obvious in my example. With solo mining, just like in my deal, most people will come out behind. However, with solo mining, just like in my deal, the expected return is greater.

The difficulty change is irrelevant noise. It's based on the mistaken notion that you need time to allow the law of averages to even things out. That is not true. Playing a slot machine one time has precisely 1/100th the expected loss of playing the slot machine 100 times. If playing once is a bad deal, playing 100 times is 100 times worse. If playing once is a good deal, playing 100 times is 100 times better.

Congrats!

That's a stupid comparison as it is completely unrelated and has nothing to do with my reasoning.

This is a bogus argument.

Consider: You give me a dollar. I roll a six-sided die. If it comes up '1', I give you $1,000. You only get to play once.

Is this a good deal? By your reasoning, it's not. Most people who take the deal will come out behind $1.

Statistically if you had enough hashing power to more or less assure yourself a solved block before difficulty change then you could potentially come out even or ahead. Otherwise in an accelerating difficulty frame solo mining will fall behind pooled mining for most people. Luck is, of course, luck.

I haven't referred to that as an argrument once. I have also opened the thread before I knew of the block.


Why do you need to make a showing for a business no one is forcing you to undertake?


What many of you guys seem to forget, when using projections like this, is that the payout of pooled mining is also going to sink into a bottomless pit with these figures and won't be the "sure .5 BTC alternative" but rather something like the "wimpy .000005 BTC alternative". Is that going to be worth your time? Speculating that BTC/US will skyrocket until then, just because difficulty has increased is wishful thinking and and a large risk in itself.


I don't and just try to correct the incorrect representation that pooled mining is statistically more profitable. If at all, it is the opposite. I concurred with the "less variance" fact in my first post. I don't neglect, that there might be a need for that for some people.

So you ignore the equally as likely case (more likely based on available anecdotal evidence) as "myth" because you personally found a block? i suppose that's easier than debating it.

Anyway, kudos to you for enjoying high risk activities, regardless of whether or not they will truly yield better results, might also look into las vegas and play some games of chance, as well as a lady of the evening (a different game of chance).

Myself though i'm not living at home sucking off mommies teat, and so the cost of running a miner is real, and i need to make a showing for doing so, not just sit at the slots and pull the lever until a little bit of change falls out and makes a big noise.

Just a note, the "average" time to find a block with a single 5870 at the current difficulty is now 152 days, 8 hours, 40 minutes. in that time there will be between 11 and 22 difficulty changes, almost all of them upwards, the ones in the near future will be large. You think that statistically speaking you are really likely to find another "big fat payout" in that time? Does .5 BTC per day seem less appealing than 50 btc per who knows how much time (likely a year)?

Anyway, it's good to see soloers, that's what the system was all about, but don't pretend that pools are just for lazy ignorant masses, they're for people who don't get off on rolling the dice because often the dice don't come up well.

The poclbm console output still logs RPC errors and "client not connected" messages for solo mining.


I agree, 2% really isn't a big deal. But the wiki and many forum posts suggest the opposite: that solo mining is less profitable on average, which isn't true IMHO.

Well done. You got lucky today. I will stick to pooled mining. Only a 2% penalty - really not a big deal.

A regular lottery within a regulated environment returns about 50% of its players' investment on average. Playing that is idiotic. The Bitcoin lottery returns more than 100% of my investment on average on the current conditions (basically only 240 watts of electricity). The chance is there, that I could never find a block (which luckily didn't happen), but if I find a block, its return is high enough to justify buying the ticket (on average more than 100%). So playing the Bitcoin lottery has both good returns, moderate risk, and it is fun. Beats Las Vegas in 2/3 aspects. Pooled mining would also return more than 100% right now, but with zero fun and much time wasted for a wimpy return (or considerable risk if you scale).

PS Does anyone know, how I can find out which block my miner has exactly found? The Bitcoin client only shows time, amount, and pending confirmations.

There are only two reasons we need health insurance and neither of them apply to pooled mining. If not for those two reasons, health insurance would be a bad deal because you would pay more for insurance than you'd pay for care. Those reasons are the small risk that we will unexpectedly incur major health care expenses that we cannot afford and desperately need and the fact that insurance companies can use their market leverage to extract lower prices from providers. Because neither of those things apply to, for example, pet health insurance, it is pretty silly to buy pet health insurance. It's like a lottery in reverse where the odds are still against you.

That should be as simple as setting up another Nagios task from a remote server. Of course, if you do not already have such a setup, it might be more convenient.