Solo Mining vs Pool Mining


#21

Day 24
Expected Time per Block = 253 days 11 hours
Pool Speed = 700 MH/s

I caved today and said “■■■■ this, I’m going to join the mining pool for a daily payout.”

Did that for like 3.5 hours and got a small payout (was very close to the threshold I set for a payout on litecoinpool.org)

I reflected on it for a little, is it better to go with the pool and get a steady payout or continue going solo and hope I get lucky?

I came back to it after @kmkfan628 commented on this thread and realized I should just keep going if for no other reason then to document how it goes and provide updates.

I’d still recommend that people stick to mining in a pool but there’s a good argument to be made to mine solo. Really it’s about the fees. Right now, I look at the fees on the Bitcoin blocks (https://live.blockcypher.com/btc/) and sometimes the fees are more that 50% of the 12.5 BTC reward. On the Litecoin blocks, the fees average around 0.33 LTC (simple moving average I calculated from the last 5 blocks) and can be as high as 1 LTC.

If you think about it, as a miner you’re really providing the same service that was previously provided by banks: processing transactions. In the long run, whether I mine solo or as part of a pool, the work that I do will be compensated by the network. I’m banking on the fact that going solo will be a more profitable pursuit because there is no middleman between the work I do for the network and the network itself. (Though at the rate I’m going I won’t see that compensation for a while.)

I think at almost a year as the estimated time to find a block, this is all still a bit farfetched, it all sounds nice in theory. Mine solo and you’ll make more, yeah right. Just got to have trust in the network.


#22

Hey @nehgekim thanks for taking one for the team! :grinning:
I am new to LTC and a couple of my family members and I chipped in for an AntMiner L3+.
We are under the same impression that if we are going to do this, we are gonna go all in and solo mine.
When you are running your server on GCP (AWS now) do you have to pay a fee for that?
Other than the A4’s, what other hosts or servers are you using to host your solo mine server?
Thanks!
-Rob


#23

I just run a single instance on AWS (t2.small). I’m actually planning on getting a machine so I own the hardware (trust no one) but still looking at the power it’ll use and factoring in a small % of my internet bill and it’ll pretty much end up costing the same.

GCP was nice because they give you $350 for 1-year which would cover all your costs for a year. I just think Stackdriver is a crappy log monitoring tool and I’m not interested in messing to much with logging applications. (Kibana’s not so bad though if anyone’s looking for logging applications.)

To be honest, if I had just 1 L3+ and went in on it with some family members, I’d join a pool so you start getting a steady return. My concern is just that the difficulty is going to rise so fast that your est. time to a block is going to double in another month and you may never ever find a block. That’s the risk you take. I’m bringing more machines online to mitigate that risk. (Forcasting that I need to double my hashing power every 6 months to keep up.)

Learn from my mistake. I totally regret not mining in a pool for the first month I had my A4+ since I could have easily mined enough to cover a significant part of my initial investment (in USD) since the price spiked. Now that the difficulty also spiked, I missed a critical window. I think a lot of L3+ and A4+ units will come online Jan, Feb and March so I think you want to try to get as much LTC as you can now so you and your group get some ROI (celebrate and consider reinvesting). If I were you I’d mine pool and watch to see how my experiment goes here first. Go solo once you are past 1 GH/s.


#24

I appreciate your input!
I think we will take your advice. I setup an account on litecoinpool.org and we will just start mining there, atleast to get out investment back. Maybe then we will get another L3+ or A4+ (which should push us in the 1GH/s mark) and solo mine.
It’s all very exciting and can sometimes be overwhelming, so it’s good to talk it out and think about it clearly :grin:


#25

This is one of the best readings in all of litecoin mining I’ve ever had. Thank you.


#26

Well am glad it’s helpful to the community. Kind of makes up for the LTC that I’ve missed out on by not joining a pool. Thanks for the comment @Romeococo


#27

waaaaa!!! :tired_face:

Now the irony of the life kicks it, 1 week pool mining you will find a block!

thanks for sharing your experiment, sorry it didnt pay out in LTC, but what gives!


#28

Haha, that’s what I was worried about. Whatever, eventually I will find one or my friend with a est. time to block of 30 days will find one. Or, my setup blows and neither of us will find one!

I’ll give it another 60 days before I start freaking out. Can always recoup my investment by selling my miners since I bought them directly from the manufacturer. (Hopefully, I can still do that 60 days from now too.) The experience is worth it IMO, I mine to support the network and for fun, profit is not the main factor (or at least I keep telling myself that so I can sleep at night).


#29

hahahahhaha


#30

Week 4
Expected Time per Block = 263 days 07 hours
Pool Speed = 700 MH/s

Something I didn’t even think about (I went 4 weeks blindly trusting my setup) was testing.

After being asked by a peer, “do you will we’ll find a block soon?” I knew I needed to really test this to make sure it’s not all just a pipedream.

Luckily, there is a way I could test my setup, mine on the Litecoin Testnet!

I had not even thought about this but luckily this network is pretty slow (~700MH/s) which means if I point my A4+ at it, I would be guaranteed to mine a block since I would have about 50% of the hashing power.

So, I did that and after just a few minutes :boom: starting hitting blocks and LTCt (testnet LTC) starting getting sent to my address: mj439rRH1bspfC9NJPezgrSoLVvg2ztUfX.

So I mined for a little and saw I was getting some blocks, then pointed my A4+ back to my Mainnet pool. I’ll sleep better tonight for sure.

Will post a link to my repo with notes on setting up on the Testnet at some point. For now, people can look here: https://ricjac.github.io/cryptocurrency/ltc-testnet/. I information from this to figure out how to use the Litecoin Testnet.


#31

At least it has that functionality that you can test and confirm that it is actually working.
I am still a week out from deploying my mining rig, but I am getting worried with the recent activity in LTC and the difficulty quickly increasing on the network for mining :persevere:


#32

Also, I’d like to know, how long did it take of pool mining to mine those 2 blocks?
What was the payout you actually received in that time?


#33

That happens, which is why shipping time is so critical to mining. Think about all those people who preordered the L3+ for March!

Pretty much instantly, like 5 minutes of mining and I had mined blocks. Each block mined earned 50 LTCt so I actually ended up mining 6 for 300 LTCt (again on the Litecoin Testnet of course they’re worth nothing).


#34

Hey @nehgekim , any news on solo mining? :slight_smile:


#35

No news…

Only reading bad news about it on Reddit, it’s like the opposite of confirmation bias, only finding antithetical info when I look (and there seems to be a reason for that…).

I’m thinking about switching to solo mining a coin where I’d have a smaller est. time to block, Like Verge or EMC2, but not sure if I want to accumulate those coins. I’d probably sell directly to Bitcoin then probably to Litecoin, which is friction and would mean I’d burn up any benefit from solo mining in the first place.

Will push on cause why not, but I’m losing hope, even my colleague who’s got an est. time to block closer to 30 days is still waiting (I read somewhere that a 200-500% variance is not uncommon), starting to think that unless you have enough hashing power, you’ll never find a block.

I think @pguerrerox said it best:

So far, it’s been going the other way around.


#36

Sorry to hear that man!
But thanks for taking one for the team.
You’re information has been invaluable and I have learned a lot.
I just got my L3+ up and running and mining right now on lightcoinpool.org. Averaging about 550mh/s @ 780w.
Thanks and good luck!
-Rob


#37

That’s pretty solid, is that 550 MH/s reported from the machine or from the pool?


#38

Thats from the machine.
The pool is about the same, 540’ish.


#39

Week 5
Expected Time per Block = 88 days 12 hours
Pool Speed = 2.1 GH/s
Blocks found = 0

Still, no blocks found. However, one of my colleagues running the same setup I am (with more hashpower) did find a block! So, I have a new sense of optimism in solo mining.

My colleague has approximately 5.5 GH/s which initially gave them about a 30 day estimated time to block (and 80% chance of finding a block in 30 days). In practice, they found a block after 26 days. The reward was about 25.5 LTC (25 + 0.5 in fees).

It’s hard to nail down exactly how much LTC would have been mined otherwise with 5.5 GH/s. Technically the right way to do the calculation would involve some calculus since the reward is a function of the difficulty. So, I ran the calculations for reward based on the difficulty at the first day of mining, 3,000,000 (15 Dec. 2017). This represents the best-case senario.

Based on 3M difficulty, the 30-day reward would be 28.2 LTC (litecoinpool.org/calc). With 25.5 LTC after 26 days, we would have been at 24.4 LTC, so they are about 1 LTC better off having mined solo.

But it’s really better since the difficulty has risen from 3M to 3.7M which would have reduced real reward earned over the 26 days had they mined pool.

So, after spending the last weeks reading all about how solo mining is a bad idea, I was pleased to see a block mined, even if I wasn’t the one who mined it.

Based on what I read, people recommend mining solo if you have an estimated time to block of 1 day. However, I would recommend you should only solo mine if you can afford to go 2 to 3 times longer than your estimated time to block without earning anything and if you plan to mine for 3 years or more. Its really less of a function of what your estimated time to block is and more a function of how long you can survive without earning anything for your mining.

Based on what I read, people say solo mining and mining in a pool would earn the same thing over the long term but I disagree. There is friction when mining in a pool: the pool operator needs to be paid and there are fees to transfer money to all of the miners in the pool. Mining in a pool can never earn the same as mining solo where there is no fees and no middlemen (however you do have to run your own node which could be the same as the friction associated with mining). The real trick is to minimize any extra overhead associated with running your own node (like right now, I pay for a server but I have plans to go to a bare metal machine).

When you mine solo, you take more risk but you potentially earn more reward. I recommend more people mine solo if they have the means to. If you have one machine and are looking for a return on that machine, you should mine pool. If you’ve been mining for years and have earned a pretty penny already, you should try mining solo so there is less centralization in the network. litecoinpool.org is getting pretty big


#40

I can’t wait for you to get a block!