Topic: How can 0% fee pools make money? (Read 6456 times)

Has no one answered this question yet?  Honest zero fee pools survive off of donations.  It's as simple as that.

Has no one answered this question yet?  Honest zero fee pools survive off of donations.  It's as simple as that.

There are merge minable scrypt coins but I don't believe any of them have real value. Namecoin seems the only one that is worth something.

eh, what could a scrypt p2pool 0% fee, 0% donation take?

Most so called 0% pools are actually taking some of the mining returns, be it transaction fees, merged mining or both.

The rest are doing some kind of loss leader, either to promote another product, to build their brand, or to build a the personal brand of the operator.

0% fee does not necessarily mean a pool is a good pool to use or that it is a bad pool to use. Don't be hypnotized by that number. It is powerful.

1. Loan BTC to speculators/governments who want to short the Bitcoin market/keep the exchange rate stable.
2. Delay payouts and use other peoples BTC to speculate on Bitcoin price moves (Currency Arbitrage).
3. Keep all the transaction fees for yourself.
4. Secretly merge mine an alt coin and keep them all for yourself.
5. Create a payment system that doesn't pay miners for all the found blocks.
6. Create a payment share system so complicated people don't realize they are paying a hidden fee.

My advice, never mine anywhere you can't be paid daily! If payments are delayed, get out fast!

P2pool is a distributed network of pools so cost is shared between many nodes, and the most popular node, P2Pool.org, does actually charge a 2% fee!

P2pool is a distributed network of pools so cost is shared between many nodes, and the most popular node, P2Pool.org, does actually charge a 2% fee!

I actually run a 0% fee pool. In fact, we are currently paying a 3% Bonus on solved blocks. (as a promotion)
We are doing this because we are NEW. We are trying to grow our miner base.

Our business model is that we want to provide an equal playing field for everyone who wants to mine both bitcoin & litecoin.
We want to share evenly in the profits with those of us who help us out. This makes a sense of community and makes it so that no one person is better than the other, we all have an equal stake in the mining process. Yes we host the pool (in house with cloud-stack technology) Yes it does cost us money & electricity and time to run and maintain a pool, especially one that is as rich and robust as ours. However we want to make our money in other places.
By offering mining contracts, by offering seminars on bitcoin & litecoin, by holding workshops and educating the public. An educated consumer is the perfect consumer. We also plan on making money by utilizing our social media interface & by selling advertising to crypto currency related businesses.

So while I can understand why someone would be skeptical about 0% pools, I can assure you that we have other ways to make a profit.

We want our miners to come first, we are miners ourselves.

I am not saying all 0% fee pools are like this, I am just sharing with you our vision as a new pool in a competitive market.

We are not a big pool by any means, but we have a lot to offer and we think that the majority of you would like what we have done.
Please feel free to take a look, your support is greatly appreciated.

Charles - Btc Ltc Rush
http://www.btcltcrush.com

p.s. we are in the process of purchasing our security certificate, please disregard the error for now. accept the certificate. thank you.

Wow! Haven't seen 0% pools and can't imagine how is it possible thay exist!
I mean what's the profit if there is no fees, maybe as it was told - Donations

I am very suspicious of 0% pools.  Running a large pool is full time job and computing and data center space isn't cheap.  While I suppose there are people that are willing to work 10 hour days for free, and spend thousands per month of their own money and hope that donations cover it,  it does seem odd doesn't it? Mother Theresa of Bitcoin?

Add in that pools are now multi-million dollar business's.  A pool with say 15% of hashing power has revenue of $219 million per year. (30 blocks a day, 365 days a year, $800/coin)

How many CEO's running a $219 million dollar business would do so purely on donations and cover expenses out his own pocket?

How would it be done?  Withholding blocks or withholding shares would be detectable (although you could mask shares by not reporting %'s instead exact numbers).  The maifia solved this problem long ago.  Skimming.  The easiest way to have a dummy "house account".  Credit 1 dummy share for every 100 shares would dilute the earnings overall by 1% and deliver $2million a year in earnings. 

Creating a dummy share for every 1,000 real shares would pay $219,000 a year in earnings.  (plus donations)

A skim of $2million, or $219,000 well within variance and luck and virtually undetectable.

In my region there is a saying: "Not even the dog wags its tail for free".
Some pools charge more than 5%, some are free. Most pools publish their reward: https://en.bitcoin.it/wiki/Comparison_of_mining_pools
Some pools (i.e.: eligius, ghash, p2pool, itzod) charge 0% to users and even share the transaction fees.

Pools are expensive services to maintain, where is the deal for 0% pools?

Information gathering like Google? Fees hidden in the rawarding calculation?
Ghash could have a "production control strategy", but the others?

Who or what can stop a pool operator from adding a line of code in the users rewarding script, to multiply his own miner shares before the final calculation?

Re: How can 0% fee pools make money? "Not even the dog wags its tail for free"

I think the sliding photos, need to be more consistent. They are all different quality, and size. Apart from that it is quite good.