Love this coin but I'm starting to think it's time to move most of my SHA mining back to bitcoin. The algo appears to be weighted too heavily against asic especially SHA. I know that has been intentional but I suspect this will hold DGB back in the long run because I believe DGB needs a much higher proportion of the SHA network for security and I don't believe it will be taken seriously enough without it. With equipment that cost over $36000 at the beginning of last year, I'm mining perhaps $9 a day worth of DigiByte compared with $12 of Bitcoin, Around the 60 sat it's relatively even. If I had to pay for all the electricity I was using, I wouldn't mine anything, I'd just buy Bitcoin with what I was prepared to spend on electricity. If I was to continue down the path I've wondered, I would soon find myself in territory of loosing more than I'm prepared to lose, so the next game I will be playing is probably the waiting game.
conclusion: "No one 'honest' made any money out of Bitcoin in 2014."
Hi Jumbley. I've also noticed the weighting against SHA (and it seems scrypt a bit as well). groestl seems to find a huge number of blocks comparatively. I'm not complaining. Like you, I also understand the objective. I completely understand your points about moving back to mining BTC and - I guess just trading for DGB from the mining rewards. But, because I don't mine SHA, I'm not going to move my equipment back to mining other scrypt coins. I'm not as obsessive with mining as I have been in the past. Anymore, I run my equipment when I decide to run it (or remember to turn it on) ... here and there ... I don't run it enough to worry anymore about returns or costs. It's nice to get some DGB.
You mentioned 60 sat. Clearly, the trade value effects most peoples' mining decisions. We (meaning the DGB community) clearly see exchange volume from 2 primary places. (1) From miners. And, (2) from active traders (and investors). Probably there's lots of overlap between those 2 categories. But, there's also probably some problems that come from the situation. A couple of weeks ago, I was reading an interesting article about market microstructures and symmetry assumptions in predicting stock price, or evaluating price manipulation (the article is a bit dated - 1992 - but it was interesting). Basically, the general assumption is that over time there is relative symmetry between buyers and sellers in an exchange ... but this assumption can be wrong. When there is an asymmetric relationship it leads to differences in the way buy and sell orders effect the bid and ask prices. The article looked at the role of "liquidity traders" ... people who have to sell for external reasons (i.e. miners who have to sell to cover costs of electricity). The problem with liquidity traders (miners who mostly sell) is that they have less choice of time and price than buyers. Buyers can CHOOSE when they buy, and at what price they are willing to buy. But, a person who NEEDS to sell to cover costs doesn't have as much choice about time or price. Therefore the sell orders and buy orders effect the price movement in unequal ways. We can see the effects of liquidity traders in DGB through the number of small sell orders placed throughout the day, whereas buy orders usually seem to be larger and less frequent.
What would be fantastic is if DGB could work toward implementing difficulty and variations between the different mining algorithms in a way that protected both the network and the value of the coin. Although that would be impossible to perfectly achieve, it would be really cool. And, while I have no idea how it could be achieved, I'm sure that someone smarter than me could test it out. I suppose the best solution will just happen over time as we add additional variables to the analysis of trade ... (i.e. stores and people buying DGB to spend).
That's right but let's say you missed the glory days of SHA256 mining.
It is already well built, it hass to be harder over time and SHA is the algo that can make more coin than any other algo.
However, I used to have around 5TH.s a few weeks ago, took it off, below 50 sats now.
They highest price DGB ever was after the fork was 125 sats and one miner had 10TH.s and I had 8TH.s
That's your network security value.
However, some pissant miners are hellbent on making SHA256 and ASIC in general fail.
They're just stupid, broke and envious trolls, they don't understand the mining industry at all.
They will be long gone and SHA will still be the kingpin of crypto mining.
What you guys omit is that every algo has it's pros and cons.
-SHA256 gets you the most coins but you mine at a loss, 99% of the time; mine for the investment only not for fun.
-Skrypt is a happy medium between coin production and profitability, not even sure if it is profitable.
-QuBit, Skein, Groesti are all small coin earners but are the most profitable... no scaling here though, as SHA and Skrypt can.
I only left one S1 miner at TBF but right now, I need to make more Bitcoin to buy hardware...
Diff goes up stagnantly but I'm not selling DGB's to buy hardware so I need to mine some Bitcoin.
First, just to be clear. I love mining DGB. It's all I mine. And, my support of DGB extends beyond mining. I don't really hold any other altcoins anymore. I keep a small amount of BTC for trading, but mostly I just hold, trade, and mine, DGB.
Yes. For me scrypt is profitable mining. At least in theory. Because I don't sell any of the coins I mine, I suppose technically I'm not making a profit. However, the value of the coins I mine is greater than the cost to run my equipment.
You suggest that profitability is related to the algorithm. That's only half true. Profitability is related to external factors (cost of electricity), mining decisions, and use of the equipment ... and profitability is related to the efficiency of the equipment as much, or more, as it is related to difficulty, or algorithm. If I were mining DGB scrypt with a GPU it wouldn't be anywhere near profitable. Even the old gridseed asics (the cupcake ones), and the first iteration of the gridseed blade - both asics - are currently not profitable. But, that's all fine ... it's not a problem. We could say similar things about specific SHA asics ... Actually, I think all this is really good. It's one of the strengths of DGB. The multi-algo mining gives people a chance to engage with the coin regardless of their approach to mining.
Although I've never mined BTC directly, I watched sadly as the BTC mining world consolidated into giant corporate mines, and as hardware manufacturers fleeced customers only to abandon selling to consumers to set up giant mines and rent hashpower at a premium (there are a few exceptions ... Bitmain has remained a strong consumer level manufacturer ... the jury is still out on Spoondoolies). Limited corporate control of the BTC network is a really bad situation. It's a situation that few strong BTC proponents actually acknowledge or discuss openly. In effect, there is less diversity and more corporate control over the processing of BTC than there is for fiat currency or creditcards.
DGB doesn't have the same problem with the network. And, I think DGB has done a good job of learning from the mistakes that BTC made. If DGB somehow, magically, gained universal adoption overnight, I'm sure we would see huge corporate level investments into mining and other VC development. Still, because of the multi-algo approach, even these investments wouldn't shut the door on a distributed DGB network. This is a huge strength of DGB - it's something I support. And, even though I run an asic scypt rig - I'm not upset that a person doing CPU mining has a fair shake at supporting DGB. I'm not upset at all ... it's great.
There's that great 30 minute video (posted on youtube around this time last year) of Jared introducing DGB. In the Q and A session, he explains the asymmetric approach they took developing digishield. The difficulty rises in proportion to increase hashpower in the network. But, difficulty decreases asymmetrically to the way it rises. My earlier point about "liquidity traders" and asymmetric effects on the exchange value is related to the point you made about variation in mining decisions based on exchange value. A large portion of miners are liquidity traders. But the majority of people who just trade (and not mine) are NOT liquidity traders. Liquidity traders NEED to sell to cover costs. They might hold excess coins (we'll call that profit), or they might sell all their mining proceeds for cash. Still, they MUST sell some or all of their mining proceeds to pay for costs. In an exchange, we have buyers creating the demand and sellers creating the supply - the split between them is the current trade value. This situation leads to asymmetries in trader knowledge (informed/uninformed) and asymmetries in the effects traders have on the market price.
Getting into the details of the market microstructure and trading strategies starts to get really complicated really fast (and involves sequential game theory) - so let's try to keep it simple. DGB is undervalued at the moment (my guess at a current fair market estimate is 75 plus or minus 10%). So let's start with the the past couple of weeks. During times when the value is depressed - as it has been the past couple of weeks - liquidity traders need to sell more to cover costs. This increase in supply creates greater downward pressure on the price. During times when the value is increasing, they need to sell less, which restricts the supply and creates support for the upward price trend. The asymmetry extends to the impact of informed traders as well. This all changes the probabilities of if I'm trading with an informed trader or an uninformed trader. The probability that upcoming orders will increase the supply or demand, etc..
Think about some of the posts in this thread over the past week. The animated shark sucking up the floating DGB for instance. During times of depressed value, informed traders are able to profit off the "liquidity traders." When asymmetry in trading increase it's easier to exploit good news than bad; and the situation leads to the possibility of temporarily manipulating the price because of price elasticity - the bid price moves less in response to a sale than the ask price does in response to a purchase. There's not much of a reason for me to worry about the deflated value. It's a temporary thing (at least I believe it is because I believe in DGB). So, I can buy more DGB at relatively low values. If I'm strategic about my purchases, I can spread them out in small orders so that I don't influence the supply and don't increase the price. I purchases about 1 BTC worth of DGB over the past 7 days. I did it over the course of 8 different orders ranging from 50 to 46 and my weighted average purchase price is 472. I'm interested in holding, so this is mostly just me working to get a good deal. However, in an ideal world, I would like to see DGB move toward a more stable price. In order to reinforce price stability, we would need to address the imbalance (asymmetry) in traders. Some of us with large balances of DGB (like greater than 15 million DGB) could provide some price stability - but that's not going to happen and it's not a good idea because it involves collusion and manipulation.
The truth is that I'm happy to continue this conversation and I think it's an issue we should be talking about ... but I don't have a good solution to the problem. We will all trade and buy and sell as we see fit (and as we need). More than anything I was just making an observation.
