I just got bitcoin set up, but my cursory examination of the less technical information available leads me to believe that it would be return-smoothing and generally a more clever idea to join a mining pool than to go it alone. But the one I found appears to be closed. I’m mostly fumbling along on a shallow understanding of what I’m dealing with, here, so somebody tell me: is a bitcoin mining pool the sort of thing where a bunch of people (say, LWers who want to mine bitcoins) can just up and start one? Anybody want to throw in with me? (I contribute zero knowhow, as is probably evident.)
I just mine alone and treat it as a lottery with positive payout, i.e. when I wake up in the morning I have a new free ticket for $50 waiting to be scratched, which is a pretty enjoyable feeling.
The time and effort required to get a decent-sized pool going are probably not worth for smoothing out the very small return you get from casual mining.
Sounds like the trivial inconvenience level is too high on this for casual miners. Maybe if lots of LWers want to mine, we could form a collaborative pool. Only one or a few people would need to do the legwork on it.
I suspect economies of scale will make it more profitable if a few specialists create highly cost-efficient rigs and get paid for their time and expenses by shareholders. Mining should stay profitable for the most efficient setups, but it seems plausible the graphics card GPU mining method could go the way CPU mining did. Currently the most profit evidently comes from buying 5770 − 5870 cards and placing them in computers that would otherwise be idle. However there is probably a near future where customized ASICs (structured ASICs initially) are the most profitable kind of mining—something for which a large number of shareholders and a small number of specialists is the more favorable strategy.
One should keep in mind that by not pooling you aren’t actually losing output, you just have a bigger variance in outcome. If you intend to keep mining for at least a year or so, having a week or two with no return won’t be a big deal. If you do not intend to keep mining for that long, it’s hardly going to be worth the effort of setting up a pool.
On a separate note, a macroeconomic scenario where people accumulate wealth on a large scale by running powerful computers performing useless hash checks (while they could be helping with Folding@home or something) is a little disturbing. At least precious metals and gems are nice to look at, and have several industrial uses.
One should keep in mind that by not pooling you aren’t actually losing output, you just have a bigger variance in outcome. If you intend to keep mining for at least a year or so, having a week or two with no return won’t be a big deal. If you do not intend to keep mining for that long, it’s hardly going to be worth the effort of setting up a pool.
Thank you for clarifying that. I initially assumed that humans formed pools because that increased the rate of return per unit of computation invested, but did not see how that could be. Your explanation of the decrease in variance resolves my confusion.
On a separate note, a macroeconomic scenario where people accumulate wealth on a large scale by running powerful computers performing useless hash checks (while they could be helping with Folding@home or something) is a little disturbing. At least precious metals and gems are nice to look at, and have several industrial uses.
Every person who joins Bitcoin increases the network size, which in turn increases the probability that it will cross the threshold beyond which it will be popular enough to replace other currencies in common transactions. That is an additional, external benefit of spending computation on Bitcoin, and it helps beings like me, who have significant difficulty in interfacing with the financial system but not with electronics.
It would also help those who desire more anonymity in exchanging money.
I initially assumed that humans formed pools because that increased the rate of return per unit of computation invested, but did not see how that could be.
If anything, it’s the opposite. A number of pools actually reduce your payoff since they take a cut in exchange for providing the pool service. (The worst, Compute4Cash, takes ~50%!)
Thanks! It shows up on my client! (I was wondering who that was from...) I will keep some extra paperclips safe!!!
Plus, I got the GPU thing to work, and it’s reporting ~29 Mhash/sec. (So not good compared to the latest GPUs, but I’m doing the best I can with what I have.)
EDIT: And you probably already inferred this, but you are a good human.
Good point, pooling isn’t currently worth that much in the long term, except in the sense that the instant feedback can be motivating. But it is also worth keeping in mind that smaller amounts may come to be worth more over time if it ever takes over a significant segment of the economy. The higher the value of bitcoin the less tolerable this kind of variance is.
My thought regarding the macroeconomic scenario described is that it would actually result in more processing time available for sale at cheaper rates. This is because the more processors that are already allocated towards bitcoin the more additional processors are needed to make any kind of profit. At some point it becomes more profitable to sell processing time elsewhere due to the cost of electricity and equipment. By this time a highly efficient system for generating processor power has already been developed. One thing that could help the bitcoin economy as well as Folding@home would be a charitable drive that pays miners to allocate processor time to folding instead of bitcoin.
I’m not sure if structured ASICs and other highly customized hardware is as useful for folding as it is for mining bitcoin. However, there are probably a lot of GPU miners who will need something to do with their equipment when they can no longer profitably mine bitcoin.
I just got bitcoin set up, but my cursory examination of the less technical information available leads me to believe that it would be return-smoothing and generally a more clever idea to join a mining pool than to go it alone. But the one I found appears to be closed. I’m mostly fumbling along on a shallow understanding of what I’m dealing with, here, so somebody tell me: is a bitcoin mining pool the sort of thing where a bunch of people (say, LWers who want to mine bitcoins) can just up and start one? Anybody want to throw in with me? (I contribute zero knowhow, as is probably evident.)
I just mine alone and treat it as a lottery with positive payout, i.e. when I wake up in the morning I have a new free ticket for $50 waiting to be scratched, which is a pretty enjoyable feeling.
The time and effort required to get a decent-sized pool going are probably not worth for smoothing out the very small return you get from casual mining.
Sounds like the trivial inconvenience level is too high on this for casual miners. Maybe if lots of LWers want to mine, we could form a collaborative pool. Only one or a few people would need to do the legwork on it.
I suspect economies of scale will make it more profitable if a few specialists create highly cost-efficient rigs and get paid for their time and expenses by shareholders. Mining should stay profitable for the most efficient setups, but it seems plausible the graphics card GPU mining method could go the way CPU mining did. Currently the most profit evidently comes from buying 5770 − 5870 cards and placing them in computers that would otherwise be idle. However there is probably a near future where customized ASICs (structured ASICs initially) are the most profitable kind of mining—something for which a large number of shareholders and a small number of specialists is the more favorable strategy.
One should keep in mind that by not pooling you aren’t actually losing output, you just have a bigger variance in outcome. If you intend to keep mining for at least a year or so, having a week or two with no return won’t be a big deal. If you do not intend to keep mining for that long, it’s hardly going to be worth the effort of setting up a pool.
On a separate note, a macroeconomic scenario where people accumulate wealth on a large scale by running powerful computers performing useless hash checks (while they could be helping with Folding@home or something) is a little disturbing. At least precious metals and gems are nice to look at, and have several industrial uses.
Thank you for clarifying that. I initially assumed that humans formed pools because that increased the rate of return per unit of computation invested, but did not see how that could be. Your explanation of the decrease in variance resolves my confusion.
Every person who joins Bitcoin increases the network size, which in turn increases the probability that it will cross the threshold beyond which it will be popular enough to replace other currencies in common transactions. That is an additional, external benefit of spending computation on Bitcoin, and it helps beings like me, who have significant difficulty in interfacing with the financial system but not with electronics.
It would also help those who desire more anonymity in exchanging money.
If anything, it’s the opposite. A number of pools actually reduce your payoff since they take a cut in exchange for providing the pool service. (The worst, Compute4Cash, takes ~50%!)
Okay, I just got set up with Bitcoin. Send coins to my address at:
16eyVtgaTYGxstybeay9mQ6xy4GAPVtXLN
.05 bitcoins sent! Keep some extra paperclips safe for me.
Thanks! It shows up on my client! (I was wondering who that was from...) I will keep some extra paperclips safe!!!
Plus, I got the GPU thing to work, and it’s reporting ~29 Mhash/sec. (So not good compared to the latest GPUs, but I’m doing the best I can with what I have.)
EDIT: And you probably already inferred this, but you are a good human.
Why would I do that? What’s in it for me?
Please send some my way as well. And please also think of a reason to do so. Thanks in advance. 1DXZUdV5UCeaz6TUQ8oWG8d6xJheKRHsuv
I’ll think of 1 reason in exchange for 1 bitcoin.
1CzPhJzXSnXGq2UJReD4UixD35vS2FbiKWTempting! I’ll give you some karma while I think it over. 1DXZUdV5UCeaz6TUQ8oWG8d6xJheKRHsuv
We sell karma, but this time you don’t even need to give real money
Drat! I was thinking about getting into the karma selling business, not buying.
You gain social status.
Good point, pooling isn’t currently worth that much in the long term, except in the sense that the instant feedback can be motivating. But it is also worth keeping in mind that smaller amounts may come to be worth more over time if it ever takes over a significant segment of the economy. The higher the value of bitcoin the less tolerable this kind of variance is.
My thought regarding the macroeconomic scenario described is that it would actually result in more processing time available for sale at cheaper rates. This is because the more processors that are already allocated towards bitcoin the more additional processors are needed to make any kind of profit. At some point it becomes more profitable to sell processing time elsewhere due to the cost of electricity and equipment. By this time a highly efficient system for generating processor power has already been developed. One thing that could help the bitcoin economy as well as Folding@home would be a charitable drive that pays miners to allocate processor time to folding instead of bitcoin.
I’m not sure if structured ASICs and other highly customized hardware is as useful for folding as it is for mining bitcoin. However, there are probably a lot of GPU miners who will need something to do with their equipment when they can no longer profitably mine bitcoin.
If you haven’t already, you can try deepbit.net. I did, and it’s working nicely so far.