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Miners Aren’t Friends

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Re: Miners Aren’t Friends

#11

Post by runeks »

> Again, let’s design a simple smart contract. This time Alice wants to play a guessing game. Alice puts 5 Ether in her contract. That ETH goes to the person that guesses closest to the number she’s thinking of. Alice calls commit with the hash of the number, so she can’t change her mind. Anyone else can call guess to submit a guess. After 2 blocks Alice calls reveal to tell everyone what the number is.

This scheme is not unsafe because of miners. Transactions are public. As soon as Alice’s “reveal” message is published to the network, everyone can submit guesses using the revealed number. And miners are incentivized to include whichever transaction pays the highest fee, which means the transaction fee of the guessing transactions published after the “reveal” transaction will converge with the prize sum.

Alice’s commit transaction needs to specify some block height after which further guesses are ignored, and then publish the “reveal” message some (safe) number of blocks after this.

Re: Miners Aren’t Friends

#13

Post by joshvm »

1337biz wrote: post #8
JohnJamesRambo wrote: post #5

Almost all miners use a mining pool so wouldn't have access to these tricks. The pools on the other hand... I used to have an Ethereum mining operation, before it became unprofitable to do so. It was one of the most fun ventures of my life. All the cards and enormous heat and fans exchanging outside air in. It felt like I was part of something futuristic and new, solving problems I had never had experience with befor…

Care to share some insights into the economics of running it and how it became unprofitable?

The economics are simple - how much power do you use vs how much money you make per unit time. As a miner you're banking on the increase in difficulty correlating with an increase in price. Ethereum mining difficulty plummeted back in October, flatlined for a bit, and has been slowly on the rise since December.

There is limited resale value in the cards (depreciation etc), but even after PoS hits there will be enough mineable things that selling them off wouldn't be necessary. Love or hate it, you could use a service like Nicehash.

It becomes unprofitable if the difficulty spikes, but not the value, so your hardware takes a long time to mine little. Often this happens between new technology generations, like when ASIC miners made GPU miners unusable for Bitcoin.

Right now Ethereum is still quite profitable to mine. I have a bunch of GTX1060's with a combined hashrate of 100MH/s running on an EthOS system. That's enough to earn between 0.35-0.4 ETH a month at the moment. The power usage is around 300W with some twiddling - around £25-30 per month.

You also have to consider speculative value of the coin. Suppose you were mining 1ETH a month back in January '17. Your monthly payout (about $30) would have barely covered electricity, but now 1ETH a month is practically a minimum wage salary. You need to be honest with yourself why you're doing it - are you making money to spend today or are you holding?

Re: Miners Aren’t Friends

#14

Post by prepend »

doctoboggan wrote: post #9
JohnJamesRambo wrote: post #5

Almost all miners use a mining pool so wouldn't have access to these tricks. The pools on the other hand... I used to have an Ethereum mining operation, before it became unprofitable to do so. It was one of the most fun ventures of my life. All the cards and enormous heat and fans exchanging outside air in. It felt like I was part of something futuristic and new, solving problems I had never had experience with befor…

If you have modern cards you can still mine with one of the services that find the most profitable algorithm for you. I use NiceHash and have historically made about $2/day per GTX1070. This past month though I've been making more that double that. EDIT: Use this site to find out if your cards will be profitable considering your energy costs: https://www.nicehash.com/profitability-calculator I do want to leave one im…

Are you mining independently? Or as part of a pool?

Re: Miners Aren’t Friends

#15

Post by abecedarius »

The LeastAuthority audit of Ethereum gas economics in 2015 brought up this issue of transaction reordering: https://github.com/LeastAuthority/ethereum-analyses/blob/mas...

(They also pointed the issue that led to the DAO hack and recommended "value reverts to the sender upon exception".)

Re: Miners Aren’t Friends

#16

Post by infogulch »

runeks wrote: post #11

> Again, let’s design a simple smart contract. This time Alice wants to play a guessing game. Alice puts 5 Ether in her contract. That ETH goes to the person that guesses closest to the number she’s thinking of. Alice calls commit with the hash of the number, so she can’t change her mind. Anyone else can call guess to submit a guess. After 2 blocks Alice calls reveal to tell everyone what the number is. This scheme i…

In other words, blockchain programming isn't trivial, and you have to translate your intentions into the contract with blockchain concepts in mind.

Re: Miners Aren’t Friends

#17

Post by doctoboggan »

prepend wrote: post #14
doctoboggan wrote: post #9

Earlier quoted context omitted.

If you have modern cards you can still mine with one of the services that find the most profitable algorithm for you. I use NiceHash and have historically made about $2/day per GTX1070. This past month though I've been making more that double that. EDIT: Use this site to find out if your cards will be profitable considering your energy costs: https://www.nicehash.com/profitability-calculator I do want to leave one im…

Are you mining independently? Or as part of a pool?

I use the nicehash pool

Re: Miners Aren’t Friends

#18

Post by JohnJamesRambo »

1337biz wrote: post #8
JohnJamesRambo wrote: post #5

Almost all miners use a mining pool so wouldn't have access to these tricks. The pools on the other hand... I used to have an Ethereum mining operation, before it became unprofitable to do so. It was one of the most fun ventures of my life. All the cards and enormous heat and fans exchanging outside air in. It felt like I was part of something futuristic and new, solving problems I had never had experience with befor…

Care to share some insights into the economics of running it and how it became unprofitable?

I just exited when the calculator at mycryptobuddy.com (which calculates in difficulty increases) indicated that profitability would be miniscule and not much over electricity costs very soon. It cannot account for price increases in Ethereum, but if you are using that to stay profitable it is almost always better to invest in the coins themselves. I sold all my gear and cards while their price was high and invested all the money into cryptocurrency. The gamble has paid off handsomely, I make more from crypto investing than from my job now. It has allowed me access to things I never could have dreamed of, but I still miss walking in my Ethereum mine and feeling the over 100 deg. temps and the instant sweat and all the noise. I miss all the network cables and blinking lights and thinking about the new network I was helping to secure. Trading and investing can't hold a candle to it, but the money is better.

Re: Miners Aren’t Friends

#19

Post by corford »

doctoboggan wrote: post #9
JohnJamesRambo wrote: post #5

Almost all miners use a mining pool so wouldn't have access to these tricks. The pools on the other hand... I used to have an Ethereum mining operation, before it became unprofitable to do so. It was one of the most fun ventures of my life. All the cards and enormous heat and fans exchanging outside air in. It felt like I was part of something futuristic and new, solving problems I had never had experience with befor…

If you have modern cards you can still mine with one of the services that find the most profitable algorithm for you. I use NiceHash and have historically made about $2/day per GTX1070. This past month though I've been making more that double that. EDIT: Use this site to find out if your cards will be profitable considering your energy costs: https://www.nicehash.com/profitability-calculator I do want to leave one im…

I don't understand the economic argument for personal mining (I totally get it from a fun, geeky PoV if making money isn't the primary goal - it's how I got started in crypto).

A GTX1070 costs about $800. At $4/day, it will take you 200 days to make back your principle (ignoring power costs, difficulty scores going up etc. - in reality it will obviously take you even longer to cover your costs).

If you had put that same $800 in to buying ETH (picked because it's a relatively safe, "boring" coin) on 1st July, 200 days later (or 7 months) it would have been worth $2,140 (yielding a $1,340 profit per card equivalent cost invested - note I'm using ETH price on 1st Jan 2018 and not including the recent growth to a new all time high). And the profit will likely x5 (or more) this year if you hold on to your ETH.

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