How mining pools distribute rewards? PPS vs FPPS vs PPLNS ...

Something is rotten in the state of DOGE mining

Shibes, something stinks in doge land. A problem in the design of dogecoin means that dishonest (or perhaps we should call them "creative") miners can take a disproportionate share of rewards, leaving everyone else to earn less than they deserve. Many of you have probably noticed that calculators estimate payouts larger than what you earn in practice (for example, dustcoin estimates ~1500DOGE/day @ 200KH/s while Non Stop Mine pays about a quarter of that rate), and most have written it off as bad luck: the blocks your pool found happened to be small, or your pool happened to be unlucky, and such is life. At least another friendly Shibe is having a better day, and it'll come around in tips anyway! Unfortunately, the truth is much darker.
The "random" DOGE rewards per block are not random. In fact, the value of each block is predetermined by a simple equation applied to the hash of the previous block. A creative miner can take advantage of this fact to mine dogecoin when the potential reward is high, and switch to litecoin when the potential reward is low. During some rounds, the reward is so small it isn't worth the electricity spent finding it; during more rounds, the reward is less than can be earned mining LTC; in a few rounds, the reward is spectacular. Honest miners mine with the expectation of earning an average of 500,000 DOGE per block, but when people are selectively mining the high-profit DOGE rounds, the average reward falls for honest miners.
So the question is: is this problem theoretical, or are honest miners really losing value to cheaters? I spent some time digging, and it appears that cheating is rampant! There are a few ways cheating can be detected.
If there is outside competition for high-value blocks, then pools should on average be finding blocks worth less than 500,000 DOGE (because some of the valuable blocks, but none of the low-value blocks, will be found by cheaters). The largest pool, Dogehouse, reports some useful averages: over all time, the pool has found 11,241 valid blocks worth 5365077071.0746 DOGE, for an average of 477,277 DOGE (including fees, which should actually raise the average above 500,000!). That's 4.5% below the expected average block value. Is it simply bad luck? No. With so many blocks found, there's about a 7% chance that the average will be above 505,000 or below 495,000; there's a <<1% chance their average will be above 510,000 or below 490,000, and effectively NO chance of seeing an average below 485,000. 477,000 is simply preposterous. Dogepool is either mind-bogglingly unlucky, or something is fishy.
Maybe Dogehouse is doing something fishy...but we can look at other pools. Dogechain's pool's all-time average block value is similar: 478847 DOGE. They're a smaller pool so the odds of this being bad luck aren't astronomical, but it's not very likely. Fast-pool's average is 477892. They're big enough that the odds are again astronomical.
And this only accounts for people cheating outside of the pools. Cheaters can operate inside our pools (more on this later)!
Maybe there's something wrong with the pools. They mostly run similar software. All their owners could be lying to us. We can check for signs of cheating independent of the pools: if more people are mining high-value blocks than low-value blocks, the hash-rate will be higher when the next block is high-value, so high-value blocks will be found faster than low-value blocks. Here's what you find if you look at 5000 recent blocks (blocks 80,001 to 85,000) and measure the average time to find a block, broken out by the block value:
I had to drop about 50 blocks which were missing good timestamps, but they're evenly distributed and shouldn't skew the averages.
The pattern is clear: the network is finding high-value blocks significantly faster than low-value blocks. Low-value rounds take as much as 10% longer than intended, and high-value rounds take around 5% less time than intended. Significant hashrate belongs to miners that cheat.
I mentioned cheaters can operate inside our pools. The payment algorithms used by most pools were carefully designed for bitcoin's (effectively) fixed block reward. They reliably protect against cheaters trying to hop in and out of pools based on short-term profitability, by making payouts solely dependent on the unknowable future (the straightforward pool payment schemes allow cheaters to look at a pool's recent history and use that to take an unfair share of its earnings; read this awesome paper for details). Since the future reward for a bitcoin pool is completely unknowable, PPLNS does not protect against a hopper who knows the future. In the case of Dogecoin, the future reward IS knowable, and PPLNS offers no protection.
Dogehouse is so big we can reasonably assume they'll find any particular block. Dogehouse is using a PPLNS target similar to an ordinary round's length. Someone who mines only during high-value rounds will, with high confidence, earn significantly more DOGE per share submitted than someone who mines Dogecoin 24/7. They also experience much lower variance in earnings.
The random block reward size needs to be removed. It's fun, but it rewards cheaters. Developing a more secure random block value selection technique is possible, but based on observations of GitHub, I do not trust the Dogecoin creator to get it right. Even subtle errors re-open the opportunity for cheating.
While I believe cheating is already unacceptably common, many will disagree until it worsens. To force the issue, I've included everything you need to join the cheaters.
Patch dogecoin/src/main.cpp:
diff --git a/src/main.cpp b/src/main.cpp index 2af23af..8c32dad 100644 --- a/src/main.cpp +++ b/src/main.cpp @@ -1794,6 +1794,8 @@ bool CBlock::ConnectBlock(CValidationState &state, CBlockIndex* pindex, CCoinsVi prevHash = pindex->pprev->GetBlockHash(); } +fprintf(stdout, "Next block value: %lld\n", GetBlockValue(pindex->nHeight, 0, GetHash())); +fflush(stdout); if (vtx[0].GetValueOut() > GetBlockValue(pindex->nHeight, nFees, prevHash)) return state.DoS(100, error("ConnectBlock() : coinbase pays too much (actual=%"PRI64d" vs limit=%"PRI64d")", vtx[0].GetValueOut(), GetBlockValue(pindex->nHeight, nFees, prevHash))); 
Perl script to control cgminer:
#!/usbin/perl use strict; use warnings; my $ltcMiner = "192.168.1.1 4029"; my $dogeMiner = "192.168.1.1 4028"; open (INSTREAM, "dogecoind|") or die; my $lastPool = 0; # LTC while (my $line = ) { if ($line =~ /Next block value: ([\d].*)/) { my $val = $1; if ($val >= 70000000000000) { # High-value DOGE round if ($lastPool == 0) { # Switch from LTC to DOGE $lastPool = 1; &onoff($dogeMiner, "en"); &onoff($ltcMiner, "dis"); } else { # Already mining DOGE } } elsif ($lastPool == 1) { # Low-value DOGE round and currently mining DOGE $lastPool = 0; print " Switching to LTC\n"; &onoff($ltcMiner, "en"); &onoff($dogeMiner, "dis"); } else { # Low-value DOGE round; already mining LTC anyway } } } close (INSTREAM); exit; sub onoff { my $miner = shift; my $enDis = shift; open (OUT1, "|nc $miner") or die $!; print OUT1 "gpu${enDis}able|0"; close (OUT1); } 
Then, simply run two instances of cgminer with separate API ports, one configured for LTC and the other configured for DOGE.
submitted by DisappointedShibe to dogemining [link] [comments]

Decred Journal — May 2018

Note: New Reddit look may not highlight links. See old look here. A copy is hosted on GitHub for better reading experience. Check it out, contains photo of the month! Also on Medium

Development

dcrd: Significant optimization in signature hash calculation, bloom filters support was removed, 2x faster startup thanks to in-memory full block index, multipeer work advancing, stronger protection against majority hashpower attacks. Additionally, code refactoring and cleanup, code and test infrastructure improvements.
In dcrd and dcrwallet developers have been experimenting with new modular dependency and versioning schemes using vgo. @orthomind is seeking feedback for his work on reproducible builds.
Decrediton: 1.2.1 bugfix release, work on SPV has started, chart additions are in progress. Further simplification of the staking process is in the pipeline (slack).
Politeia: new command line tool to interact with Politeia API, general development is ongoing. Help with testing will soon be welcome: this issue sets out a test plan, join #politeia to follow progress and participate in testing.
dcrdata: work ongoing on improved design, adding more charts and improving Insight API support.
Android: design work advancing.
Decred's own DNS seeder (dcrseeder) was released. It is written in Go and it properly supports service bit filtering, which will allow SPV nodes to find full nodes that support compact filters.
Ticket splitting service by @matheusd entered beta and demonstrated an 11-way split on mainnet. Help with testing is much appreciated, please join #ticket_splitting to participate in splits, but check this doc to learn about the risks. Reddit discussion here.
Trezor support is expected to land in their next firmware update.
Decred is now supported by Riemann, a toolbox from James Prestwich to construct transactions for many UTXO-based chains from human-readable strings.
Atomic swap with Ethereum on testnet was demonstrated at Blockspot Conference LATAM.
Two new faces were added to contributors page.
Dev activity stats for May: 238 active PRs, 195 master commits, 32,831 added and 22,280 deleted lines spread across 8 repositories. Contributions came from 4-10 developers per repository. (chart)

Network

Hashrate: rapid growth from ~4,000 TH/s at the beginning of the month to ~15,000 at the end with new all time high of 17,949. Interesting dynamic in hashrate distribution across mining pools: coinmine.pl share went down from 55% to 25% while F2Pool up from 2% to 44%. [Note: as of June 6, the hashrate continues to rise and has already passed 22,000 TH/s]
Staking: 30-day average ticket price is 91.3 DCR (+0.8), stake participation is 46.9% (+0.8%) with 3.68 million DCR locked (+0.15). Min price was 85.56. On May 11 ticket price surged to 96.99, staying elevated for longer than usual after such a pump. Locked DCR peaked at 47.17%. jet_user on reddit suggested that the DCR for these tickets likely came from a miner with significant hashrate.
Nodes: there are 226 public listening and 405 normal nodes per dcred.eu. Version distribution: 45% on v1.2.0 (up from 24% last month), 39% on v1.1.2, 15% on v1.1.0 and 1% running outdaded versions.

ASICs

Obelisk team posted an update. Current hashrate estimate of DCR1 is 1200 GH/s at 500 W and may still change. The chips came back at 40% the speed of the simulated results, it is still unknown why. Batch 1 units may get delayed 1-2 weeks past June 30. See discussions on decred and on siacoin.
@SiaBillionaire estimated that 7940 DCR1 units were sold in Batches 1-5, while Lynmar13 shared his projections of DCR1 profitability (reddit).
A new Chinese miner for pre-order was noticed by our Telegram group. Woodpecker WB2 specs 1.5 TH/s at 1200 W, costs 15,000 CNY (~2,340 USD) and the initial 150 units are expected to ship on Aug 15. (pow8.comtranslated)
Another new miner is iBelink DSM6T: 6 TH/s at 2100 W costing $6,300 (ibelink.co). Shipping starts from June 5. Some concerns and links were posted in these two threads.

Integrations

A new mining pool is available now: altpool.net. It uses PPLNS model and takes 1% fee.
Another infrastructure addition is tokensmart.io, a newly audited stake pool with 0.8% fee. There are a total of 14 stake pools now.
Exchange integrations:
OpenBazaar released an update that allows one to trade cryptocurrencies, including DCR.
@i2Rav from i2trading is now offering two sided OTC market liquidity on DCUSD in #trading channel.
Paytomat, payments solution for point of sale and e-commerce, integrated Decred. (missed in April issue)
CoinPayments, a payment processor supporting Decred, developed an integration with @Shopify that allows connected merchants to accept cryptocurrencies in exchange for goods.

Adoption

New merchants:
An update from VotoLegal:
michae2xl: Voto Legal: CEO Thiago Rondon of Appcívico, has already been contacted by 800 politicians and negotiations have started with four pre-candidates for the presidency (slack, source tweet)
Blockfolio rolled out Signal Beta with Decred in the list. Users who own or watch a coin will automatically receive updates pushed by project teams. Nice to see this Journal made it to the screenshot!
Placeholder Ventures announced that Decred is their first public investment. Their Investment Thesis is a clear and well researched overview of Decred. Among other great points it noted the less obvious benefit of not doing an ICO:
By choosing not to pre-sell coins to speculators, the financial rewards from Decred’s growth most favor those who work for the network.
Alex Evans, a cryptoeconomics researcher who recently joined Placeholder, posted his 13-page Decred Network Analysis.

Marketing

@Dustorf published March–April survey results (pdf). It analyzes 166 responses and has lots of interesting data. Just an example:
"I own DECRED because I saw a YouTube video with DECRED Jesus and after seeing it I was sold."
May targeted advertising report released. Reach @timhebel for full version.
PiedPiperCoin hired our advisors.
More creative promos by @jackliv3r: Contributing, Stake Now, The Splitting, Forbidden Exchange, Atomic Swaps.
Reminder: Stakey has his own Twitter account where he tweets about his antics and pours scorn on the holders of expired tickets.
"Autonomy" coin sculpture is available at sigmasixdesign.com.

Events

BitConf in Sao Paulo, Brazil. Jake Yocom-Piatt presented "Decentralized Central Banking". Note the mini stakey on one of the photos. (articletranslated, photos: 1 2 album)
Wicked Crypto Meetup in Warsaw, Poland. (video, photos: 1 2)
Decred Polska Meetup in Katowice, Poland. First known Decred Cake. (photos: 1 2)
Austin Hispanic Hackers Meetup in Austin, USA.
Consensus 2018 in New York, USA. See videos in the Media section. Select photos: booth, escort, crew, moon boots, giant stakey. Many other photos and mentions were posted on Twitter. One tweet summarized Decred pretty well:
One project that stands out at #Consensus2018 is @decredproject. Not annoying. Real tech. Humble team. #BUIDL is strong with them. (@PallerJohn)
Token Summit in New York, USA. @cburniske and @jmonegro from Placeholder talked "Governance and Cryptoeconomics" and spoke highly of Decred. (twitter coverage: 1 2, video, video (from 32 min))
Campus Party in Bahia, Brazil. João Ferreira aka @girino and Gabriel @Rhama were introducing Decred, talking about governance and teaching to perform atomic swaps. (photos)
Decred was introduced to the delegates from Shanghai's Caohejing Hi-Tech Park, organized by @ybfventures.
Second Decred meetup in Hangzhou, China. (photos)
Madison Blockchain in Madison, USA. "Lots of in-depth questions. The Q&A lasted longer than the presentation!". (photo)
Blockspot Conference Latam in Sao Paulo, Brazil. (photos: 1, 2)
Upcoming events:
There is a community initiative by @vj to organize information related to events in a repository. Jump in #event_planning channel to contribute.

Media

Decred scored B (top 3) in Weiss Ratings and A- (top 8) in Darpal Rating.
Chinese institute is developing another rating system for blockchains. First round included Decred (translated). Upon release Decred ranked 26. For context, Bitcoin ranked 13.
Articles:
Audios:
Videos:

Community Discussions

Community stats: Twitter 39,118 (+742), Reddit 8,167 (+277), Slack 5,658 (+160). Difference is between May 5 and May 31.
Reddit highlights: transparent up/down voting on Politeia, combining LN and atomic swaps, minimum viable superorganism, the controversial debate on Decred contractor model (people wondered about true motives behind the thread), tx size and fees discussion, hard moderation case, impact of ASICs on price, another "Why Decred?" thread with another excellent pitch by solar, fee analysis showing how ticket price algorithm change was controversial with ~100x cut in miner profits, impact of ticket splitting on ticket price, recommendations on promoting Decred, security against double spends and custom voting policies.
@R3VoLuT1OneR posted a preview of a proposal from his company for Decred to offer scholarships for students.
dcrtrader gained a couple of new moderators, weekly automatic threads were reconfigured to monthly and empty threads were removed. Currently most trading talk happens on #trading and some leaks to decred. A separate trading sub offers some advantages: unlimited trading talk, broad range of allowed topics, free speech and transparent moderation, in addition to standard reddit threaded discussion, permanent history and search.
Forum: potential social attacks on Decred.
Slack: the #governance channel created last month has seen many intelligent conversations on topics including: finite attention of decision makers, why stakeholders can make good decisions (opposed to a common narrative than only developers are capable of making good decisions), proposal funding and contractor pre-qualification, Cardano and Dash treasuries, quadratic voting, equality of outcome vs equality of opportunity, and much more.
One particularly important issue being discussed is the growing number of posts arguing that on-chain governance and coin voting is bad. Just a few examples from Twitter: Decred is solving an imagined problem (decent response by @jm_buirski), we convince ourselves that we need governance and ticket price algo vote was not controversial, on-chain governance hurts node operators and it is too early for it, it robs node operators of their role, crypto risks being captured by the wealthy, it is a huge threat to the whole public blockchain space, coin holders should not own the blockchain.
Some responses were posted here and here on Twitter, as well as this article by Noah Pierau.

Markets

The month of May has seen Decred earn some much deserved attention in the markets. DCR started the month around 0.009 BTC and finished around 0.0125 with interim high of 0.0165 on Bittrex. In USD terms it started around $81 and finished around $92, temporarily rising to $118. During a period in which most altcoins suffered, Decred has performed well; rising from rank #45 to #30 on Coinmarketcap.
The addition of a much awaited KRW pair on Upbit saw the price briefly double on some exchanges. This pair opens up direct DCR to fiat trading in one of the largest cryptocurrency markets in the world.
An update from @i2Rav:
We have begun trading DCR in large volume daily. The interest around DCR has really started to grow in terms of OTC quote requests. More and more customers are asking about trading it.
Like in previous month, Decred scores high by "% down from ATH" indicator being #2 on onchainfx as of June 6.

Relevant External

David Vorick (@taek) published lots of insights into the world of ASIC manufacturing (reddit). Bitmain replied.
Bitmain released an ASIC for Equihash (archived), an algorithm thought to be somewhat ASIC-resistant 2 years ago.
Three pure PoW coins were attacked this month, one attempting to be ASIC resistant. This shows the importance of Decred's PoS layer that exerts control over miners and allows Decred to welcome ASIC miners for more PoW security without sacrificing sovereignty to them.
Upbit was raided over suspected fraud and put under investigation. Following news reported no illicit activity was found and suggested and raid was premature and damaged trust in local exchanges.
Circle, the new owner of Poloniex, announced a USD-backed stablecoin and Bitmain partnership. The plan is to make USDC available as a primary market on Poloniex. More details in the FAQ.
Poloniex announced lower trading fees.
Bittrex plans to offer USD trading pairs.
@sumiflow made good progress on correcting Decred market cap on several sites:
speaking of market cap, I got it corrected on coingecko, cryptocompare, and worldcoinindex onchainfx, livecoinwatch, and cryptoindex.co said they would update it about a month ago but haven't yet I messaged coinlib.io today but haven't got a response yet coinmarketcap refused to correct it until they can verify certain funds have moved from dev wallets which is most likely forever unknowable (slack)

About This Issue

Some source links point to Slack messages. Although Slack hides history older than ~5 days, you can read individual messages if you paste the message link into chat with yourself. Digging the full conversation is hard but possible. The history of all channels bridged to Matrix is saved in Matrix. Therefore it is possible to dig history in Matrix if you know the timestamp of the first message. Slack links encode the timestamp: https://decred.slack.com/archives/C5H9Z63AA/p1525528370000062 => 1525528370 => 2018-05-05 13:52:50.
Most information from third parties is relayed directly from source after a minimal sanity check. The authors of Decred Journal have no ability to verify all claims. Please beware of scams and do your own research.
Your feedback is precious. You can post on GitHub, comment on Reddit or message us in #writers_room channel.
Credits (Slack names, alphabetical order): bee, Richard-Red, snr01 and solar.
submitted by jet_user to decred [link] [comments]

Can you proofread this before I explain to my Dad what cryptocurrency is?

He asked me what calculations my racks of video cards were doing, and what cryptocurrency was, so I typed this up - can you let me know all the stupid mistakes I made before I send it?
Note - he specifically asked me to explain everything as he wants to understand the entirety of it, including what my racks of GPU's are actually calculating and why
bitcoin was the first, it used the SHA256 hash algorithm
it was made so that everyone could run it and "mine" for coins with their CPU by running the SHA256 hash over and over with slightly different inputs, to try to get an output that was lower than the current target. The current target is called the "difficulty" ( https://en.bitcoin.it/wiki/Target )
If your bitcoin program found inputs that resulted in an output lower than the current difficulty, you win a "block" which contains varying amount of coins (with bitcoin, the reward halved every few years)
Your bitcoin program submits this to the network (multiple other bitcoin nodes that you're connected to), and then importantly - they all independently check your work. Once they verify that your hash is correct and is below the difficulty target, everyone agrees that a block was found and everyone moves onto looking for the next one. Note that the chain of blocks that keeps being found is called the "blockchain" , and it's completely public. Every transaction that happens between blocks sits in the "mempool", waiting to be written into the next block. ( https://99bitcoins.com/what-is-bitcoin-mempool/ )
Since SHA256 is a one-way hashing algorithm, you can't just make up a fake hash and hope it works. You actually have to do the work to find a correct one, this is called "Proof of Work"
Once it's written into the blockchain, it cannot be changed. Usually when you send bitcoins to someone, they wait for several "confirmations" before they consider your payment accepted. For example - when five new blocks have been mined after the one containing your transaction, that's five "confirmations". The deeper your transaction is into the blockchain, the more computing power it would take to invalidate that transaction. This is called the 51% attack - ( https://learncryptography.com/cryptocurrency/51-attack )
then someone figured out that it would be faster if your video card did the SHA256 hashes instead of your CPU, since there are hundreds of weaker 'cores' in a GPU than a CPU (which has 2-4). After a short while of everyone moving to using GPU's instead of CPU's, the difficulty target became harder (the network re-adjusts the difficulty target every x blocks, to keep the time between blocks constant. If more people are mining, the difficulty must go up to keep the time between blocks the same)
After a few years, various people custom designed ASICS to do the SHA256 hashes , which are much faster than GPU's, so now to mine bitcoin you have to buy custom hardware to do it. (you don't technically have to, but using GPU's would be worthless now with such an insane difficulty)
Also along the way, people realized the difficulty was getting too hard to mine by themselves, they would go weeks without finding a block; so someone invented "pooled" mining. One person runs a custom bitcoin wallet on a server, and thousands of people connect to that and mine to that wallet. However, instead of that wallet telling all the miners what the real current difficutly target is, it instead gives them a much easier target, so they find "shares" every few minutes. These "fake" easy shares are how the pools keep track of how much hardware you actually have mining for them. When the pool finds a block (because one of these shares will eventually qualify against the real current difficulty), it distributes the block reward evenly among the miners, based on how many shares they submitted during that round. (There's some tricky math called "pool hopping" you can look up if you're interested, where mathematically a miner will come out ahead if they switch to a pool at the beginning of a round, then switch to another pool at a pre-determined point. Pools came up with different payment schemes to get around this, one is called PPLNS)
Bitcoin was the first, however since it's open-source, someone took the Bitcoin code, changed some variables (name, block time, block rewards, max number of coins, etc), called it Litecoin, and launched their own version. Notably, they also changed the hashing algorithm used from SHA256 to scrypt. This was the first "Altcoin".
Since all the bitcoin mining software was written to calculate SHA256, the miner programmers had to start over on a scrypt miner. When new coins come out with new algorithms that haven't been used in previous coins, miner programmers rush to create GPU miners for that algorithm. Once they're running, they then work on optimizing them. The ones who have the fastest programs can usually charge a "devfee", which means for every x minutes of mining for you, it connects to a mining pool of the developer's choosing and mines for him for y minutes (usually devfees are 1-4%). If his/her miner is much faster than others, then it's still worth it for you to run his over the free miners.
Today there are hundreds (thousands?) of altcoins, with new ones coming out every week since it's so incredibly easy to launch your own. Very few have actually added something new to the mix, but the ones that have are the ones that are currently worth the most. A notable example is Ethereum. Instead of the blockchain just being a public ledger of transactions, it can also contain code that all the ethereum nodes can run. It can be simple code, such as "all ether directed to this wallet address will get split evenly in half, with half going to this address, and the other half going to that address" , or it can be more complex code. Once this code (called a "Contract" in Ethereum terms) is submitted into the blockchain, it's there forever (or as long as Ethereum is running on people's computers)
Another thing you can do is called a "hardfork" - if a group of people don't like the way one coin is being run, they can take the source code for that coin, change what they want changed, and launch it. At a certain block, your new code takes over, and you've essentially split the blockchain off on your own. The two blockchains can never be merged, because the nodes that run the coins are running two different versions - they each see the others' transactions and chains as invalid. If you can get enough people behind your idea, and they direct enough hashing power at your fork, then it will survive. Ethereum forked a few years ago because a large group of people disagreed with something the developer did, that fork is now called "Ethereum Classic"
Other noteable things that some coins have now are anonymous transactions, using math that might as well be magic (RingCT, ZKSnarks), several coins have the ability to do transactions that you can assume are completely anonymous. Even if you view their public blockchains, you can't figure out what transactions actually happened ( https://monero.stackexchange.com/questions/880/eli5-how-does-ringct-work )
So to answer your question, my racks of video cards used to be mining Ethereum (ethash algorithm) on an ethereum pool. Now half of them are mining Monero (cryptonight algorithm) and the other half is mining ZCash (equihash algorithm)
submitted by PcChip to CryptoCurrency [link] [comments]

Ever wonder what those numbers mean? The relationship between difficulty, shares, hashrate, etc. explained.

After being confused for a long time myself, I went and crunched some figures, and found out where all those numbers came from. To save fellow shibes from having to do the same, I'm making this guide.
First of all, what is difficulty? It is a number d such that the expected number of hashes required to find a block is d * 232. That is to say, the individual probability of each hash finding a block is 1 / (d * 232 ). (You can read up on how a geometric distribution based on a Bernoulli random variable of probability p has a mean of 1/p.) So if the difficulty is 1, then a valid hash would require 32 binary zeros at the beginning (usually represented as 8 zeros in hex). If the difficulty is 1024, then 32 + 10 = 42 binary zeros are required. For a difficulty that's not a power of two, you're going to have an odd mix (e.g. the first digits of the hex must be less than 000000000c8.)
Now how is difficulty calculated? For Dogecoin, difficulty is recalibrated every 240 blocks. It is adjusted so that a block would be found every minute, on average. Example: The average hashrate was 100 GH/s over the last 240 blocks. We want a block found every 60 seconds, or every 1011 * 60 = 6 x 1012 hashes. So d = 6 x 1012 / 232 = 1397, and the difficulty will be set to 1397.
The pool difficulty (also known as share difficulty) is a closely related concept. It is up to the pool operator, but almost all define it as being difficulty * 216. That is, pool difficulty is a number d' such that the expected number of hashes required to find a share on the pool is d' * 216 (since 32 - 16 = 16). It is basically there for notational convenience, because no one wants to talk about mining at a difficulty of 0.000244 (translated to pool difficulty, that would be 16), just like how people use kilodoge or millibitcoin.
What about a share? Pool operators may vary, but usually a share is defined as a valid hash at pool difficulty 16. Pools may set a pool difficulty that everyone mines at, automatically adjust pool difficulty for each individual miner depending on their hashrate (called vardiff), or allow users to set their own difficulty. They might even create different strata with different pool difficulty levels. A share at a higher pool difficulty is harder to find but worth more. Basically, if you're currently mining at pool difficulty 16 and switch to 32, you'll mine shares half as often but every share you mine is worth two shares. (Unfortunately, the definition of "share" appears to be overloaded - it can mean either each thing a miner submits to a pool or its equivalent for a pool difficulty of 16. It's like how a "standard drink" is 0.6 oz alcohol - if you had a 24 oz beer at 5% ABV, you could say you had a drink, but technically you had two drinks in terms of alcohol content.)
A round is the period of time since the last block was found by a pool to the next time a block is found by the pool. Round shares are shares (i.e. equivalent shares for difficulty 16) that have been found by pool miners. Estimated shares is an estimate of how many shares it will take for a pool to find a block. This number is the same for each pool regardless of hashrate, and only depends on the current difficulty. It is equal to d * 212. Why? Note that a share at pool difficulty 16 is 16 times as difficult as a share at pool difficulty 1, and pool difficulty 1 is 216 times easier than difficulty 1, so the overall effect is 216 / 16. (PPS only: The baseline PPS rate is the amount a miner is paid for each share at difficulty 1; pools PPS rate is the amount a miner is paid for each share at difficulty 16. Pools PPS rate is calculated by dividing the block reward by the estimated shares. So for Dogecoin currently, you divide 500,000 by 5,645,699 to get pools PPS rate 0.088563.)
The Bitcoin wiki has a page on difficulty, but it's somewhat technical and doesn't really talk about mining pools, so I created this post because I couldn't find anything better on Google and ended up using a bit of math and common sense to figure these things out. Though I do recommend reading it for the technically inclined.
For other things like Prop, PPLNS, PPS, etc. there are many existing well-written resources, so I'm saving my breath. This page lists pretty much every single pool structure you might encounter. PPLNS (basic guide, advanced) is probably the most common but also somewhat difficult to understand.
submitted by tony_1337 to dogecoin [link] [comments]

With full blocks and average fees above 150sat/byte Slush Pool and ViaBTC payout more than Bitcoin.com mining pool

Roger claimed his pool Bitcoin.com was the "world's highest paying mining pool".
To his credit, this claim is true in certain circumstances, however it is misleading and it's currently NOT true. It's only true if the block transaction fees are under 1.53061224 bitcoins. (~150sat/byte for full blocks)
Slush Pool and ViaBTC (on PPLNS) both pay 98% of the block reward plus the block transaction fees.
Bitcoin.com pays 110% of the block reward and keeps the block transaction fees.
Over the last 24hours the average block transaction fees were 1.78648863 so directing your hashpower to Bitcoin.com would not have paid the most.
I realise Roger has to promote his pool but the gimmick "world's highest paying mining pool" is currently false.
Here's the maths (x is the fees):
Bitcoin.com = Block Reward * 110% = 12.5*1.1
Slush = (Block Reward + Fees) * 98% = (12.5+x)*.98
Bitcoin.com = Slush (calculate value of x (fees) for equal payout)
12.51.1 = (12.5+x).98
13.75 = (12.5+x)*.98
13.75/.98 = 12.5+x
14.03061224 = 12.5 + x
1.53061224 = x
submitted by m4king to btc [link] [comments]

News from the Kryptex Team

Dear friends, we are working hard on fixing bugs and implementing new features, so we don’t always have time to keep you updated 💔. Here is the news of the last week and some plans for the nearest future:
  1. We have added an option to choose mining algorithms in Kryptex v2.1! This version is currently available only for users participating in beta testing.
  2. We’re still experiencing problems with the Equihash mining pool. If you have a GPU which most likely uses this algorithm (e.g., GTX 1070/1080), the following problems might occur: — calculated and actual earnings don’t match; — earnings are occasional, but large; earnings chart consists of rare spikes; — mining restarts from time to time; The problem lies in the fact that our Equihash pool uses a PPLNS reward scheme with a low N. It finds blocks rarely, hence the wide fluctuations. We are very sorry about the situation 😔. We’re working hard on fixing this. We have reached a certain stability level, though it’s not quite satisfactory. A temporary solution (manual selection of other algorithms) is available in the beta version of the desktop app. The complete server-side solution of the problem will take about 1-2 weeks to implement.
  3. Bitcoin network fees have increased significantly, so we had to raise both the minimum payout threshold and the tx fee. The minimum payout now is 0.0006 BTC, and the tx fee is 0.0005 BTC. We hope that this is a temporary measure. Please note that the fee is not taken by us, it is taken by the Bitcoin network, and we are keeping the tx fee is low as possible. We are considering adding altcoin withdrawals if BTC fees won’t go down.
  4. Several days there was a bug due to which actual tx fees could be higher than stated on the site. By the end of week we will reimburse all affected users.
  5. We have noticed an increase in hacking activity. Hackers are distributing malware that steals your account credentials. Don’t download programs that promise to increase Kryptex performance, to "patch Kryptex", or to "speed up your hardware". These are viruses! Also, make sure to use different passwords for Kryptex and your email.
  6. We’re working on advanced monitoring and statistics on the website.
P.S: We are hiring! We look for a social media manager and support team superheroes to join our team. These are remote positions with a flexible schedule requiring ~20 hours per week. We’ll announce details later, but if you can't wait to join us, please write a short letter about yourself: [email protected] 😉
P.P.S.: If you have any questions, problems or suggestions, please don’t hesitate to contact our support team: https://www.kryptex.org/support/support
submitted by thekryptex to kryptex [link] [comments]

Announcing new LTC pool! stratum, getwork, sms/mail notify, and more!

Greetings fellow miners,
I've been working with Bitcoins a while now, but I got tired, so I've started with Litecoins. But none of the existing pools offered all of the services I wanted, so I decided to setup my own. Currently I'm developing the frontend to provide a better user experience. Requests for popular or usefull features can also be added on demand. The pool is quite new and the first block is not yet found, but all calculations I've done indicates that the first block will be found in one week, with only myself mining.
Currently, it's a PPLNS reward system, but I'm planning to make it possible to choose between PPLNS and PPS per pool worker. I also plan to rewrite the whole frontend in the future.
The url is: https://coinpool.in
Features:
IRC channels are available on Freenode (#coinpool.in) and I2P (#coinpool), and I will add forum if needed.
I'll hope you join me!
Best regards,
Meeh
https://coinpool.in
submitted by meeh420 to litecoinmining [link] [comments]

LTC to BTC - differences in mining

Hi /BitcoinMining
With LTC mining being reported as less profitable than BTC mining, I changed an older rig (Win 7 x64, cgminer 3.0.1, Catalyst 12.8, 2GB version 6950) over to BTC to see what the differences were. I signed up with the BTC Guild and chose PPLNS because this reward scheme worked well in LTC-land, and in a few minutes the pool was reporting an accurate hashrate for the worker.
cgminer is running with only the pool and worker parameters because I haven't read tuning methodologies for BTC mining. The GPU is currently reporting 354 Mh/s, 99.1% shares accepted, but only a work utility of 4.9/m. BTC Guild reports 379.04 Mh/s and 99.07% shares accepted. The allchains calculator estimates 0.016 BTC/day for 354 Mh/s but the rewards from BTC Guild are only averaging 0.011 BTC/day. Given that BTC Guild is reporting a higher hashrate, this lower reward is unexpected.
My initial questions are:
(1) Is there a recommended tuning guide for BTC mining? This GPU was performing really well with LTC mining and I'd like to make it more efficient for BTC.
(2) What would be causing, or contributing to, the significantly lower reward from BTC Guild?
Cheers.
submitted by ltc_for_me to BitcoinMining [link] [comments]

Q&A series v. 1.0

Building Whalesburg
We are getting questions from investors and bloggers who are not professional miners. They know in common words what it means, what hardware miners use but are not so familiar with numbers of this field. We regularly get questions how much profit Whalesburg will bring to our customers. So we decided to write a post which explains the basics of mining ROI.
This article is not for skilled miners; some details are not covered here!
What is typical ROI in mining, how Whalesburg will improve it?
Mining ROI hardly depends on the hardware you use (GPU or ASICs), cryptocurrency prices, network difficulty, hashrate and other variables, which changes over time. It means that real data may hardly differ from those provided in this article.
Let’s refer to a well-known website Cryptocompare.com on the page of Antminer S9 (https://www.cryptocompare.com/mining/bitmain/antminer-s9-mine). This website is quite popular and has an API used by thousands, so the data seems to be trustworthy. It tells that the price of a single piece of S9 is $2,725, its power consumption equals 1,375W, return per year is $3560 (incl. electricity costs) and ROI equals 130%.
This way you will get $3560 — $2725 = $835 net income at the end of the first year if variables below will remain same. The second year will bring you $3560 more. Note calculations was made using price of 1 BTC = $10516, electricity price $0.12 per kW/h and network difficulty = 18,633,837 PH/s.
Now let’s take a look at whattomine.com website on SHA 256 algorithm: screenshot is in a Medium post
As you can see, there is an option to mine UNIT which more profitable than BTC by 31% (!!!). So switching some of the pool’s hashpowers to this coin and converting UNIT to BTC on the fly could increase miners profit. This is the main concept of Whalesburg smart mining pool.
There is another problem — low UNIT’s network hashrate which can prevent this coin being such a profitable one if we will switch all our powers to it.
We are developing an algorithm which will vary hash powers among new coins and split profits between all participants. So, if someone will mine COIN1 with 130% BPR (BTC Profit Rate) and other will mine Bitcoin with 100% BPR — each of them both will get 15% more profit than just mining BTC. A module which responds for payouts will convert them to BTC by intent and split rewards among participants with PPLNS method.
Same picture we can see on other algorithms. For example our MVP use Ethash: screenshot is in a Medium post
Will your partners who are mining hosting companies hold WBT or they will propose Whalesburg to their clients?
All partners will have a will to hold WBT tokens for their clients, and they agree to such terms. The fee of 0,45% is cheap; additionally, they get a monitoring tool built to fulfill their needs. It is a win-win deal. Clients of our partners are investors, not IT geeks. They don’t need to hold these tokens to see increased ROI in reports. We offer services to any size mining facilities. They will want to hold our tokens and use our software. Can you make some more concrete arguments in favor of Whalesburg regarding time-saving and increased ROI?
Time-saving:
Now miners need to set a bunch of tools like EthMiner, Autominer, Claymore, Afterburner, and others. We incorporate all this functionality in one. Miners need to analyze the profitability of dozens of coins, look for good pools, create and run a .bat or .sh file to stop/run miners. They need to understand this all! Miners need to monitor the state of their hardware manually, and if something happened (drops of hash rate), they need to become a hardware doctors and to heal their farms. Let me tell you a story. Miner has a mining rig built with 8 GPU cards. He mines ETH with X MH/s. Suddenly he finds that hash rate become 0.6X MH/s — this is a 40% drop!!! But all the cards are working, responding at the same delay and have the same hash rate which is (0.6X)/8 MH/s. So Miner takes out GPUs one by one and restarts this rig until he founds one GPU card which causes a problem. He replaces this card with another one, and his rig’s hash rate returns to X MH/s. He still doesn’t know what is wrong with his GPU card. The Whalesburg monitoring tool can prevent failures and diagnose problems automatically and notify Miner. Even try to heal it disconnecting card programmatically.
Return rate:
A long time ago we experimented with my friends who own mining rigs and who were mining ETH. We’ve chosen most popular “smart mining pools” like Nicehash, Miner gate, suprnova.cc and solo mining mode with Claymore miner. The last mode was to mine with Whalesburg proof-of-concept solution — it was EthMiner + Autominer which connects to a pool of the most profitable coin among EtHash algorithm. So we connected five mining farms of the same hash rate to each of these modes and start to gather live statistics. A week was gone, and we calculated profits, rates, metrics: Lowest was solo mode mining with Claymore (obvious reasons — low hash rate, high difficulty). And still it brought to rig owner around 80% to average experiment income; Then go Nicehash and Minergate with 90% of average income, and both more-less were looking similar. Suprnova.cc was the best among all the previous and gave 115% of average experiment income. Whalesburg.com chart was hopping from one coin to another frequently at the start, then it stabilized and showed 125% of average income.
Why we generate more profits, strong part:
The first server-side auto-witching algorithm. The one in the world — all other smart pools leave this to a clients side. Transparent fees. Blockchain-based accounting shows we are not hiding a penny and using actual exchange rates. We have more Ethash coins already, at the start. We have other architecture that other mining pools, the proprietary software we coded our own from scratch. To be confident we can promise at least +15% income to whatever they use now.
Weaknesses:
Whalesburg is in the early stage. We have just released an MVP. Our pool’s hashrate on start will be low comparing to the biggest pools on the market. This is what we need to work out, but it will be easy.
Whalesburg team
Join telegram chat: https://t.me/whalesburg
Test our MVP: http://pool.whalesburg.com
Stay tuned!
submitted by whalesburg to Whalesburg [link] [comments]

Repost for a nice not-so-new pool looking for hashrate !

Hello guys. I'm doing a repost of our old thread regarding Hypernova (https://hypernova.pw) : http://www.reddit.com/litecoinmining/comments/1dcvcv/ann_ltceuusrbpps_hypernova_your_brandnew_mining/
It's been quite 1 month since we announced our opening. We and our fellow users thought it might be a good idea to talk about it again since the pool's maturity increased and features added up to the list (like replacing proportional reward system with CPPSRB)
Let me show you the main features !
A nice looking and efficient web interface We'red tired about these copy-paste pools using the mmcFE-litecoin project. We've wanted something beautiful, original and useful. Soak managed to bring you the best web interface he could. Use it on your computer, phone, phablet, android, iphone, ipad, refrigerator, lawn-mower... Starting everything from scratch was our choice - and our pride.
Capped Pay Per Share with Recent Backpay Reward System We didn't find something else longer to spell. You may have already seen this reward system currently live on the Bitcoin mining pool Eligius. To be short : it's a system that tries to be close of the classic PPS reward system. The main difference is : the pool pays the miners with the solved blocks funds. The pool doesn't take risks on short/long rounds. When a round's unlucky and the pool can't pay anymore for the work, we shelve your shares for further backpay. As the formula calculating PPS price is based on a ~60% luck assumption (It is the same formula for every classic PPS pool), mathematically we should end up with more frequent lucky (with no shelves) rounds than unlucky. With that system the pool doesn't take the risk of being bankrupt. So what we have there is a nice compromise between PPLNS with high variance and PPS with null variance (which is balanced by higher fees and a risk of bankruptcy for the pool operators).
Custom difficulty choosable per worker We heard that a bunch of you doesn't like vardiff or fixed diff pools. That's why we let you the choice. Either you're a tiny cpu miner or a cowboy with GPU farms, you're free to choose your worker difficulty from 8 to 128.
Sweet pool efficiency We've worked hard on our infrastructure implementation and Stratum. Our general overall efficiency always have been above 99%. At the time I'm writing these lines it is at 99.47% accepted shares versus 0.53% rejected. We're aware about the latency challenge. That's why we opened 4 nodes around the world to ensure the lowest round trip time : mining.eu.hypernova.pw (Europe, France) mining.usa.hypernova.pw (USA, New York) mining.usa.dallas.hypernova.pw (USA, Dallas) mining.usa.la.hypernova.pw (USA, Los Angeles)
A helpful and nice community We're always happy to help you. By mail on [email protected] or on IRC Freenode's channel #hypernova with the pool operators and our fellow miners. Keep in touch with us, we're nice people always trying to crunch our 7950 to the best !
1% fee Using a nice PPS reward system with a good compromise allows us to lower the fee thus allowing to help us pay for the servers and infrastructure.
API with JSON encoded values So you're the cowboy with a farm of 7950 ? Enjoy our API to monitor your rigs !
How to join us ? Give a shot to the website : https://hypernova.pw and create an account. Once you created a worker, point your miner toward your nearest node and shout us your best battle cry at #hypernova on Freenode ! EG (for cgminer) : cgminer -o stratum+tcp://mining.eu.hypernova.pw:3333 -u JohnDoe.myWorker -p 12345 --scrypt ...
Help us to spread the word ! We've put online a page especially for that : https://hypernova.pw/spread/ with links to every of our threads and useful buttons for Facebook/TwitteGoogle spreading.
Message for those that were with us from the beginning Thank you ! We're happy to see our project moving forward. We wouldn't have been that far without you supporting us. Thank you again and see you in the future.
So far, 2130 Litecoins redistributed to our fellow miners. Still counting... !
Hope to see you soon on Hypernova.. And sorry for the noise :)
submitted by M0nsieurChat to litecoinmining [link] [comments]

Getting started with Ethereum

What is Ethereum?

Ethereum is a decentralized programmable platform that utilizes that allows for the application of blockchain technology in many facets of life.

Like Bitcoin, Ethereum utilizes a blockchain for security and transparency. Ethereum, like Bitcoin, is also tradeable directly as Ether (ETH). However, Ethereum also allows for the creation of “smart contracts”, allowing developers to use blockchain technology, via Ethereum, in their own programmable applications.

What is Ether (ETH)?

Ether, or ETH for short, is the currency Ethereum uses. Ether is generated via algorithmic mining, and is the basis of the Ethereum network. Ether serves as the basis for Ethereum “smart contracts” which often utilize “tokens”, an abstraction of Ether.

How can I purchase Ether (ETH)?

Depending on your geographical location, your options for purchasing Ether may vary.

Purchasing Ether through Coinbase.com, using USD or BTC is a very popular method of obtaining Ether

Gdax.com allows for more rapid exchange of currency, and is connected directly to Coinbase.com

Alternatively, Poloniex.com, Kraken.com (EUR), and Bitfinex.com (USD) are popular exchanges.

Best places to buy EtheBTC with debit cards or instant bank transfers:
Best places to buy EtheBTC with SWIFT bank transfers:
Best exchanges to transfer EtheBTC to for trading:
Exchanges Fees:
Exchange Maker Taker
GDAX 0% 0.30%
Poloniex 0.15% 0.25%
Kraken 0.16% 0.26%
Bitfinex 0.10% 0.20%
Gemini 0.10% 0.20%
Bittrex 0.25% 0.25%

How can I mine ETH?

The easiest way to get started mining is through Minergate: https://minergate.com/

MinerGate isn’t recommended if you plan to have dedicated mining rigs.

If, however, you wish to mine on an existing computer as a hobby, or out of interest, it’s perfect. While it does take a fee from your mining, it’s GUI is quick and simple to use and once install you can be mining instantaneously. It also has some challenges that encourage you to mine, and if you’re an absolute beginner, then the simplicity of this software will have you jumping for joy.

Other ETH mining pools include:
The following guides can help you get started:

Where can I check the price of Ether (ETH)?

Cryptowat.ch is a popular website to track the price of Ether (ETH). In addition to listing the price of ETH on the major exchanges, it allows for a wide variety of charting tools which can be used to trade ETH more effectively.

How is Ethereum different than Bitcoin?

Ethereum creates an ecosystem for the utilization of blockchain in everyday transactions and is designed with this intention. Bitcoin, on the other hand, was created as a form of electronic cash. Ethereum uses similar blockchain technology to maintain all of the benefits of Bitcoin, but also allows for an infrastructure of applications which can extend beyond the exchange of currency.

Can I send Ether to a Bitcoin wallet?

No.

Who is behind Ethereum?

Vitalik Buterin

What are tokens?

ERC20 tokens are Ethereum derivatives. Tokens allow for smart contracts to interface directly with the Ethereum blockchain. As such, they are exchangeable through Ethereum wallets.

Proof of Work vs Proof of Stake

Proof of Work is the current method used to generate ETH, the "Serenity" update will change this to a Proof of Stake system, the difference is explained below.

Proof of Work is the system by which most cryptocurrencies, including Bitcoin, manage their blockchains. Through a process known as mining, individuals contribute processing power to solve difficult, arbitrary calculations as well as to validate calculations to determine what the next block in the blockchain should be. Whenever a new block is added to the chain, whoever was lucky enough to be the person that created that block is rewarded with some amount of currency.

The difficulty of these calculations can be determined by the devs behind the currency to control the rate at which new coins are dispersed into the economy. The reason for the difficult calculations is to secure the network by making it difficult for an attacker to start adding invalid blocks to the universally accepted chain - in this system, the attacker would need to generate over 50% of the processing power in the entire network to have their malicious validation be accepted. A higher-level way to think about this is that processing power is what creates scarcity and is proportional to the odds of you getting the next reward. This has the unfortunate side-effect of giving a disproportionate amount of power, in regards to both reward and blockchain validation, to miners that control a large portion of the mining hashrate.

Proof of Stake rewards are distributed via proportional to the “stake” that validators have in the economy as opposed to the work you can do. Your stake increases based on the amount of currency in your wallet and how long it’s been there. The greater your stake, the higher the odds are that you will receive a reward for the creation of the new block on the chain. In contrast to PoW where scarcity comes from processing power, in PoS, the scarcity comes from the currency itself.

As of June 2017, Ethereum is using a Proof of Work system. By the Serenity update the platform will be updated to use a Proof of Stake system. As we get closer to that release we will learn more details about how the PoS system will work in Ethereum’s implementation, known as Casper.

Anticipated ETH Updates:

zkSNARKs

zkSNARKs stands for “zero knowledge Succinct Non-interactive ARguments of Knowledge”. They allows us to manipulate and translate calculations that need to be double-checked so that nothing on the network needs to know exactly what the original calculation was, but can still confirm whEther a result is correct or not. The details of how this works are too opaque for this guide, but what it means is that code deployed on Ethereum doesn’t have to be open-source and the details of transactions can remain completely secret. zkSNARKs will be implemented in the Metropolis update.

Metropolis

Metropolis is the next major update to the Ethereum network, the third of four phases that the developers have planned for Ethereum. This update will bring with it modifications to the way that applications interact with the network, making it simpler for developers to write apps on the platform. zkSNARKs will also be implemented in this update, opening up the Ethereum network to developers that want to keep their apps’ source code a secret and users that want greater privacy for their transactions.

Serenity

This is the fourth and final major planned update to Ethereum. This is defined by two massive changes: transition from a PoW to PoS system using the Casper algorithm (described above), and sharding. Sharding will allow applications to be split into tiny pieces, or sharded, and distributed across the network. One calculation required to execute an app may happen on one machine (and then double-checked using zkSNARKs on several others), then the next calculation happens somewhere else, and so on. Not only does this improve performance by reducing the time it takes for apps to execute on the network, allowing network nodes to validate only shards of the blockchain means that new blocks can be added, and transactions confirmed, near instantly. This is the biggest update planned for Ethereum and has no release date yet determined.

Other Resources:

Ethereum fundamentals wiki:

Useful reddit link showing upcoming news:

Very good list of links to read about Ethereum:

Tax advice

submitted by IBeRamen to Etherealm [link] [comments]

/r/bitcoin, Help me write my letter to Congress and the IRS

All, any constructive feedback on this letter appreciated. Thanks!
To whom it may concern,
I am writing regarding the latest ruling of the Internal Revenue Service regarding Virtual Currency taxation (IR-2014-36). Due to several critical mistakes in this ruling, I am writing to recommend that the IRS suspend its guidance pending a period of public comment and Congressional oversight. Mistakes in the IRS guidance include giving the American public 20 days notice to calculate and pay $900 million dollars in new taxes, failing to provide any guidance on how to calculate the new tax, creating new tax law ex-post-facto, and ignoring the speculative nature of emerging markets.
In 2013, 1.5 million Bitcoins were mined. In December of 2013, Bitcoins were traded for $1300/coin. At this exchange rate, Bitcoin mining in 2013 constitutes $1.9 Billion in wealth. The IRS has ruled that this wealth is to be taxed as gross self-employment income; for most individuals this will be a 32% marginal rate combined with a self-employment tax rate of %15 for a total tax treatment of %47, or $900 Million in new taxes. While potentially a bold move to solve the deficit, this guidance was released March 25th, twenty days before the $900 million bill is due. The IRS guidance advised that all Virtual Currency taxes were due on April 15th and that all penalties, including criminal, will apply for late payment. This timeline gives Bitcoin entreprenuers, lawyers, accountants, and tax software authors a timeline of 20 days to calculate and move nearly a billion dollars into the Federal Treasury. This guidance is neither feasible, reasonable, or in the best interests of the United States.
To move nearly a billion dollars into the federal treasury in 20 days, tax must be calculated. The IRS has given the following instruction: "taxpayers will be required to determine the fair market value of virtual currency in U.S. dollars as of the date of payment or receipt". This simple guidance ignores the following facts of Bitcoin mining:
As a result, taxpayers must calculate and pay nearly a billion dollars in new income taxes, in twenty days, on threat of criminal penalties, with no guidance as to how much tax is due and up to a 90% variance in the possible amount of tax due. This is not sound tax policy, imposes an unreasonable burden, and deprives even the most honest & compliant citizens of the ability to calculate and pay taxes.
Finally, the new IRS guidance ignores the speculative nature of Virtual Currencies. All Bitcoin miners, this author included, had planned with their accountants to pay capital gains tax on any gained capital as a result of Virtual Currency sales. However, many miners chose never to sell virtual currency due to the lack of a robust or fair market. Of the two biggest Bitcoin exchanges in 2013, the first, Mt. Gox, has been shown to be a Ponzi scheme and has gone bankrupt, keeping all investor funds. The second, BTC-E, is located somewhere in Eastern Europe and its operators are unknown but rumored to be criminals. These are the markets that the IRS is endorsing in its guidance as "fair market". The IRS guidance requires Americans to sell $900 million worth of virtual currency on these markets in order to satisfy a new tax burden.
Many miners see these markets as risky and emerging and have held virtual currency without spending it, cognizant that on any day, the value of Bitcoin may be zero. For most miners, this means that taxes on Bitcoins mined in 2013 will be taxed at their 2013 trade value of $1300/coin, and tax will be paid by selling at today's price of $400/coin. This means that most miners will owe more in taxes than their Bitcoin is worth, and will be paying taxes out of their life savings on income they never earned. This is what I will be doing on April 15th. The IRS has purchased a massive "short sale" option against the American people, assessing tax at a price over twice as high as the price Americans are now forced to sell.
No bitcoin miner would have entered into this agreement knowingly. Like many miners, had I known that 46% tax would be assessed at speculative prices, I would never have entered into such a liability. The option of being forced to sell half of my Bitcoins every day on foreign exchanges operated by criminals and moving thousands of dollars into overseas accounts was not a risk I was willing to take. This risk is what the IRS has required with its guidance. The IRS has classified mined Bitcoin as income retroactively, against all guidance and wisdom, and caused those who entered into this hobby to incur massive tax debt against gains they have never realized. This retroactive ruling bears all the worst elements of ex-post-facto tax law, a practice our Founding Fathers worked so hard to prevent.
When the Internet revolution swept over America in the early 90s, Congress wisely allowed it to flourish and kept control of the Internet within the United States, control we still enjoy today. Like America's Mining Act of 1872, Denmark and other countries have opted to forgo a tax on Bitcoin mining due to its speculative nature, and instead tax only capital gained. Bitcoin is at the center of the virtual currency revolution, and the IRS has given miners, the core of this revolution, a choice of Denmark at 0% or the United States at 46%. We are chasing all the talent, investment, mindshare and control of an emerging revolution out of the country. We have created impossible, uninformed guidance and given America twenty days to pay a billion-dollar tax bill. We have placed a billion dollar "short sell" option against the American taxpayer and forced her to pay out of her life savings. We have engaged in the worst type of ex-post-facto lawmaking.
The IRS must immediately announce suspension of its guidance pending a period of public comment and Congressional oversight. During this period of oversight, the following minimum reforms should be undertaken:
Thank you, and God Bless America.
Sincerely,
-Truly, my name is Mike
submitted by trulymynameismike to Bitcoin [link] [comments]

VIRTUAL MINING COIN | COIN WITH COLLATERAL SECURITY | TRUSTED ESCROW-IPO

Update: Now we have a trusted escrow service for the IPO with Anon136
Virtual Mining Coin (VMC)
(The first crypto currency with collateral security)
virtualminingcoin.org
Launch date: May 3, 2014, UTC +01:00
Translates:
Polish: https://bitcointalk.org/index.php?topic=575935.0 Russian: https://bitcointalk.org/index.php?topic=577597 German: https://bitcointalk.org/index.php?topic=578063.new#new
What is Virtual Mining Coin?
More than 200 altcoin exist in the world today and most of them have no real value . The virtual mining coin is the first crypto currency is backed by collateral, ensuring that the coins value will never become 0.
The VMC scrypt-n based mining (which is ASIC resistant), can be for anyone, from any computer.
10% of the 100.000.000 coins will be pre-mined, and the 80% of the pre-mined coins will be shared proportionally among those involved in the IPO.
The full amount of IPO will be invested in cex.io, and will be kept in GHS. BTC produced by the GHS daily reinvested to ensure a steady increase in the coverage of our coin.
The amount of funds are generated continuously, will be visible to everyone on our website.
60 days from the launch of the mining the mined coins are going to be redeemable at any time, at the current coin value. Actual coin value displayed in GHS which is also will be visible to everyone on our website.
The calculation of the current value of the coin: all GHS we have / 100.000.000 coin
What is CEX.IO where we have GHS?
CEX.IO - is the first and leading commodity exchange in the Bitcoin community. Here we can buy or sell GHashes for the Bitfury ASIC chips or just trade on the increase or decrease of chip values. We simply purchase GHashes in the exchange and we will instantly become an owner of GHashes that are making income for us.
If you haven't got CEX.IO account, please register here , then you will be able to receive GHS from us.
IPO addresses:
You can send us directly the amount to this adress: 1FtMD3jz3Yhobt1JSBs2FzGiPcBKtNeWfW (If you want to send here the amount, please send us an email first!)
Or if you prefer, you can use our trusted escrow service here: https://bitcointalk.org/index.php?topic=572321.msg6282001#msg6282001
IPO holders:
Invested BTC Name E-mail address Expected VMCs 0,10 Danny dan**@hotmail.com 2000000 0,15 Mike pro**@gmail.com 3000000 0,15 DssTech adi***@gmail.com 3000000
Official Website:
virtualminingcoin.org
Specifications:
 - Transaction Confirms: 5 - Block Confirms: 50 - MAX Coin: 100.000.000 - Block value: 171.2 - Block Time: 60 Seconds - Retarget: EVERY 5 blocks / 5 Minutes - KGW Implemented with TIMEWRAP FIX - SCRYPT-N ADAPTIVE (ASIC resistant) - New features: The wallet is a Static build, which means there are no DLL files required to run the wallet. - Premine: 10% (80% of the pre-mined coins will be shared proportionally among those involved in the IPO.) Other 20% for the maintenance, developing and the bountys. 
All wallets have done, we will publish them after launch.
vmc.crypto-coinz.com (Open for registrations now) 1% Fee PPLNS Bonuses Owner loves coin so much, he is giving out Block Bonuses!
vmc.okaypool.com 0% Fee
vmc.hopto.org 0% Fee Pre-Registration PROP Payout & pay Every minute
vmc.talesfromthescrypt.org 1% Fee Open for Pre-Registration! PROP Payout
www2.coinmine.pl/vmc/ 1% Fee Open for Pre-Registration!
Coming soon...
Twitter:
https://twitter.com/VMC_news
submitted by vmcoin to altcoin [link] [comments]

US Digital Dollar PLANS LEAKED! Coinbase Involved!? - YouTube Bitcoin Mining Difficulty – Description, Example, Calculator, BTC Should I Choose PPS or PPLNS? - Antminer S9, Avalon 741 BITCOIN: SOLO MINING VS MINING POOL! Bitcoin price analysis!- bitcoin may 29 ✨Antminer S17+ Plus - The most powerful bitcoin mining monster  Bitcoin Miner Store

BTC/EUR: Aktueller Bitcoin - Euro Kurs heute mit Chart, historischen Kursen und Nachrichten. Wechselkurs BTC in EUR. This article explores two common payment methods; PPS+ vs PPLNS. Skip to content. AbelCrypto. Latest Ethereum and Cryptocurrency News. Posted on January 11, 2018 July 3, 2018 by Ether. PPS+ vs PPLNS – Payment Options for Mining Pools (2018) A mining pool is when a group of cryptocurrency miners combine their processing power to get quicker mining results. The amount of processing needed to ... Find out what your expected return is depending on your hash rate and electricity cost. Find out if it's profitable to mine Bitcoin, Ethereum, Litecoin, DASH or Monero. Do you think you've got what it takes to join the tough world of cryptocurrency mining? PPLNS - Pay Per Last (N)umber of Shares; Pay-Per-Share (PPS) This payment method is pretty straight forward. You get paid for each valid share contributed. Each share is worth a certain amount of BTC or any other minable cryptocurrency. Share worth is calculated based on the probability of a number of shares needed for a pool to find a block. If the pool statistically needs to send 1000 valid ... Accurate Bitcoin mining calculator trusted by millions of cryptocurrency miners since May 2013 - developed by an OG Bitcoin miner looking to maximize on mining profits and calculate ROI for new ASIC miners. Updated in 2020, the newest version of the Bitcoin mining calculator makes it simple and easy to quickly calculate mining profitability for your Bitcoin mining hardware.

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US Digital Dollar PLANS LEAKED! Coinbase Involved!? - YouTube

What is Bitcoin Mining? Bitcoin Mining is a peer-to-peer computer process used to secure and verify bitcoin transactions—payments from one user to another on... A convenient calculator will help to estimate earnings.-----Daily Profit upto 2.5% Depand on your investment Starter Packeg - 1.2 in a day% Amount of investment - Min 5 $ - Max 149 $ Mining ... BITCOIN IOS MINER 2019- 🤑🏆 best bitcoin mining iphone 7 plus ios device🤑🏆 - Duration: 6:29. free bitcoin android miner 4,815 views. 6:29. How To Get 1 BTC Free ... I hope everybody's doing well and let me start off with this disclaimer, This is not Financial Advice, this is my personal opinion and please do your own homework. I hope everyone is ready for the ... We discuss how mining in bitcoin works and the differences between SOLO MINING VS MINING POOLS. Hope this video brings you a lot of value! Let´s keep on learning!

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