Solo Mining or Pool Mining?

Solo Mining or Pool Mining?

in Mining, Cryptocurrency, Mining, Know-it-all

It's simply unrealistic to give an unambiguous answer to the question "What kind of mining is better?". The reason for this is plenty of factors affecting the final result of the extraction of digital money.

The difference between solo mining and pool mining.

First, you need to familiarize yourself with the basic concepts: solo mining is a search for a solution without someone's help, that is, independently. You collect the transactions on your own, you sign and for this, you receive a reward determined by the algorithm and you also get the commission from transfers. It is very important to remember that without the found value of the nonce, the transaction will not close, and if this value were found by another miner, then this will be the reward for the transaction. Because of the possible difficulties for some miners, it is advisable to join a pool in which each participant (miner) gets the task to find the value of the nonce at a certain interval, according to his capabilities. The miner constantly receives new tasks as soon as he copes with the assigned task. In most of the pools, the reward for the block is evenly distributed among all the miners, depending on their capacity. The concepts given above are a simple description of the differences between mining in a pool and solo mining. Next, we'll look at specific examples of what lies behind these concepts and how things happen, and also find out what conditions are necessary for solo mining and why it is better for a beginner to start mining as part of the pool.

Cons of solo mining

At present, it is advisable only for recently emerging crypto-currencies or crypto-currencies with low capitalization to be mined solo. This is because of the low complexity of the network of new crypto-currencies (so far it has not reached prohibitive values). It is practically impossible to find the block of such big cryptocurrencies in the world like Bitcoin or Ethereum if you mine solo. For example, if you currently have a capacity of 1 Pth / s on the SHA-256 algorithm, then in order to find one block of bitcoin with a probability of 95%, you need about 200 days, if you do not take into account changes in the complexity of the network (ie not sure if the block will be found). The reward for the work done will be 12.5 bitcoins. This is not bad, considering the current rate, but the investments will be about 150 000 - 200 000 dollars - and this is only for assembling the ground for mining, without taking into account the costs of electricity and other costs. To find blocks every day, you need 10 or even 100 times more hashrate. In order to find blocks with a higher probability, users with a low hashrate are pooled and produce the cryptocurrency jointly.

Pools for Miners

Most of the modern pools were created at a time when it was possible to engage in the solo production of cryptocurrency (namely bitcoin) with an ordinary personal computer. However, the power of the network grew, so it was necessary to combine efforts to have a bigger chance of finding the blocks. Usually, the initiative came from users with the largest hashrate, which was already enough for solo mining. They saw how quickly the network became complicated and realized that soon enough thousands of computers would not be enough to find blocks with a high probability. This meant that the resources allocated for this very search would be wasted. With the cryptocurrency on graphics cards and processors, the situation is the same. An attempt was made to return the mining to video cards again to make it available to ordinary users, but the availability of capital matters more. This explains the fact that day by day the complexity of mining increases, which reduces the income of miners. Now even owners of mines with 50-100 video cards do not do solo mining but combine into pools even though the probability of finding a block is very high, and some mines themselves use a couple of dozen video cards. Due to the increasing complexity of the network, the equipment has to be constantly updated and has to purchase additional capacity. Comparing the current state of affairs with the beginning of 2017, there is an increase in the complexity of the main cryptocurrency network by a number of times: Bitcoin by about 4 times, Ethereum by almost 30 times, Lightcoin by more than 15 times, and DAS by almost 150 times. The complexity of the network is explained by the increasing number of miners, as well as technological progress. Chips are constantly developing and are new, faster and more efficient, which automatically increase the success of mining dependent on the level of equipment.

Conclusion

We can conclude that only one thing is known: if you do not have several hundred thousand dollars to invest in equipment for mining, then you cannot dream of owning a popular cryptocurrency with a high cost and capitalization. Trying to mine with the help of an ordinary stationary computer or laptop does not make sense. Even in the pool. You are lucky if you can at least pay for the electricity spent. The way out for those who are still interested in doing this is to try the less popular crypto-currencies such as Bytecoin or DigitalNote, who expect to increase their cost by 10-20 times in the foreseeable future. But in this situation, it is practical to buy cryptocurrency rather than mining with the inevitable equipment damage that will come with it. If you have about $ 3,000, which you want to invest in mining then you should join the pool. In other words, invest your free funds wisely in order to ensure a guaranteed income.
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