Status as of Monday, August 26, 2019

Good afternoon!

• My focus for the past few days has been on identifying marketing and promotion opportunities for the site, as it seems that Prohashing is not linked to by many sites that list pools. One of the pieces of data I identified was that 84% of new customers register, but fail to submit a single share. I'll probably post a poll to try to figure out why that is next week.
• One idea we had as to why people would register but not submit shares is because they might find the system to be too difficult to set up. To reduce friction, we're currently working on a "profit calculator" and "auto-configurator." This page will allow the customer to enter some basic information, like miner type and a few options, and password arguments will be provided. The page will also display how much the miner can expect to earn here, how much less mining the anchor coin would pay, and how much less Nicehash would pay. Expect to see this new page in a week or so.
• There's a new poll available. This pool questions whether miners would allow payouts to be delayed so that the money could be held in a "staking wallet" for the minimum number of days required to earn returns for proof of stake coins. Unfortunately, some coins pay very small rewards for staking, about 0.38% per moth, and the largest rarely pay more than a few percent. If the results of the poll continue to play out as they are now - a 5% requirement to use this feature - then we won't implement the idea.
• Chris is working on adding TRIM support to the coins' disks. We hadn't paid attention to orphan rates and the number of times coins went into error until very recently, and we found that disk performance on all servers had degraded significantly. The cause is that the 24 coin daemon disks were not enabled for TRIM support, which allows the solid state disks' firmware to better manage disk space usage. Chris was able to enable this support on four out of the six NVMe disks. He plans to do the other two NVMe disks today, and then he will reconfigure the 18 SATA disks within 10 days when the required hardware arrives. We expect significant improvements in orphan and error rates. One of the disks increased in speed from 14MB/s to 1.5GB/s in write speed after this feature was enabled.

Hi Steve,

A calculator is a good idea, also have it so you can put your electricity costs in.

Yes there are sites where the setup is easier - once click for stratum - nearest server, cut and paste. Here its just a bit harder to find. Also your arguments are a bit "wordy".

Also rig mining is easier at NH which is why my rigs are there. Nice interface they have as well.

I would recommend a "setup" tab vs "help". In that tab its just how you setup the miner - your video is good. Then have all the rest broken out somewhere else. Its good info, but when I am setting up the miner just the basics please. Mining nodes and charity tips belong - just not there.

Just my two cents and opinion.

cc4506 wrote: Hi Steve,

A calculator is a good idea, also have it so you can put your electricity costs in.

Yes there are sites where the setup is easier - once click for stratum - nearest server, cut and paste. Here its just a bit harder to find. Also your arguments are a bit "wordy".

Also rig mining is easier at NH which is why my rigs are there. Nice interface they have as well.

I would recommend a "setup" tab vs "help". In that tab its just how you setup the miner - your video is good. Then have all the rest broken out somewhere else. Its good info, but when I am setting up the miner just the basics please. Mining nodes and charity tips belong - just not there.

Just my two cents and opinion.

What about Nicehash mining makes rig mining easier there? There was a poll that showed that 91% of people think this site has a superior interface to other services, so you disagree with that. I want to find out what part of the interface is inferior.

If you have some time, I'm also interested in why you think that people choose Nicehash over us. They pay about 1.5% less, have a history of dishonesty and losses, and don't pay out in most coins. There's obviously something we're missing and need to figure it out immediately.

So as soon as push the "start mining" tab I have two options - asic or gpu. I don't see that on PH.
If I choose asic I then pick the algo and location - done, just input the data to my miner.
If I choose gpu I download the program which takes all of a minute. Then about another 20 to benchmark. I was wondering if I had missed something but I don't see that here. For you this IS your job, for most of us this is something we do on the side. Time is money so this is a very fast way to get up and running and as I finish this up I still don't see how you point your rig here.
I do prefer NH's interface. On my first log on I see everything and its a horizontal vs vertical lay out. But hey others might say they like this better. That's not a deal killer.
Yes I have heard that NH is dishonest but that's not my experience, (and some have made that accusation of PH), once again not my experience. My test rigs on MPH and awesome miner, using 4 gpu's and identical in every way showed NH was more profitable. Obviously I did not test against PH.

The payout coin isn't a big deal to me as I just get paid out in "the big 5", the rest have not proved to be worthwhile for me personally.

If I had to sum it up I would say the ease of setup is a big deal.
So is the tax form. But you cant get around that so stick to it, it is what it is.
The calculator and the ability to see the top hardware performers are damn handy esp if you are looking at adding miners. Once someone starts going to the site all the time for that information with the "perception" it pays better - why go elsewhere?

Please do take this as constructive, I want PH to be better and do appreciate all the work you and the crew have put into it.

Chris

cc4506 wrote: So as soon as push the "start mining" tab I have two options - asic or gpu. I don't see that on PH.
If I choose asic I then pick the algo and location - done, just input the data to my miner.
If I choose gpu I download the program which takes all of a minute. Then about another 20 to benchmark. I was wondering if I had missed something but I don't see that here. For you this IS your job, for most of us this is something we do on the side. Time is money so this is a very fast way to get up and running and as I finish this up I still don't see how you point your rig here.
I do prefer NH's interface. On my first log on I see everything and its a horizontal vs vertical lay out. But hey others might say they like this better. That's not a deal killer.
Yes I have heard that NH is dishonest but that's not my experience, (and some have made that accusation of PH), once again not my experience. My test rigs on MPH and awesome miner, using 4 gpu's and identical in every way showed NH was more profitable. Obviously I did not test against PH.

The payout coin isn't a big deal to me as I just get paid out in "the big 5", the rest have not proved to be worthwhile for me personally.

If I had to sum it up I would say the ease of setup is a big deal.
So is the tax form. But you cant get around that so stick to it, it is what it is.
The calculator and the ability to see the top hardware performers are damn handy esp if you are looking at adding miners. Once someone starts going to the site all the time for that information with the "perception" it pays better - why go elsewhere?

Please do take this as constructive, I want PH to be better and do appreciate all the work you and the crew have put into it.

Chris

Thanks for the feedback.

It seems like you're saying the major problem is how to get started. If that's the case, then Constance is already working on creating an "auto-configurator" that allows you to select options and it builds password arguments for you. She's also going to build in a profitability calculator that displays how much more profitable it is to mine here than at Nicehash. That should be ready in a week. Today, I already released a new version of the website that better lists costs in the documentation, so that people understand that the fees are irrelevant when they're being paid more than they are at Nicehash.

Could you point me to where the accusations against our site are? I want to read those in detail. I think the issues with Nicehash are straightforward - they had $60m stolen from them and are paying it back using less valuable bitcoins, rather than the value that was actually stolen at the time. I want to find out what we did wrong so we can make it right.

With the GPUs, I think we've pretty much concluded that we are going to focus on ASICs and not add any more GPU algorithms because Nicehash seems to be putting all its effort into GPUs. They even have an operating system now. That puzzles me, as GPUs are not where the money is. The amount of money to be made in scrypt is probably equal to the amount of money in every single GPU algorithm combined. The maintenance in these low value coins is enormous, and they constantly switch algorithms and ASICs are developed for them - plus, they keep getting discontinued from exchanges. If you look at their front page, it's hard to even find where they mention ASIC mining anymore. I wonder why they focused on GPUs?

On a side note in regards to the tax forms, Nicehash is operating illegally by operating servers in the US without sending those forms, so we reported them to the IRS. I expect that they'll either discontinue services to US customers or start issuing the forms soon. They also are operating an exchange for US customers without a money transmission license, but FinCEN rarely takes enforcement actions, so I have low hopes for action against that.

Steve Sokolowski wrote:
On a side note in regards to the tax forms, Nicehash is operating illegally by operating servers in the US without sending those forms, so we reported them to the IRS. I expect that they'll either discontinue services to US customers or start issuing the forms soon. They also are operating an exchange for US customers without a money transmission license, but FinCEN rarely takes enforcement actions, so I have low hopes for action against that.

Steve, while I'm not a tax expert I'm not sure Prohashing's and Nicehash's tax situations are similar. At PH, you are directly paying for hashrate provided to you and thus are the end purchaser. Nicehash operates as a marketplace where they connect buyers and sellers through a platform, much like ebay does. This makes Nicehash a payment settlement entity, specifically a third-party settlement organization. As such they're only required to send a 1099-K if they handle over 200 transaction AND pay out over $20,000 during the course of the year to a specific user. Whether they actually do send that form to the entities as the law requires I can't say for certain, but you seem to be of the mindset that they do not.

For the second point, I'm not sure where you're getting the idea that they're operating an exchange for US customers. If I attempt to click on the exchange I get a very specific message that it is not available in my country (being the US).

Steve,

Yes, setup is much easier at NH, so if you are new its natural to gravitate to that.

No, they do not focus on GPU mining. Other than the application the actual mining exe's are all third party - pretty good deal really for NH. NH supports or seems to just as many algos as PH does.

Are you sure GPU's are not profitable? I have 3 L3+'s and two baikals that are sitting on the shelf. If you purchased some Z9's just a few months ago you paid 2k for them - they now return 1.22 a day. By contrast my 4 GPU rigs have been making 2.00 a day for over 2.5 years. They switch algo's for profit, when the market goes down I can reduce power for less elec consumption.

Going on 3 years of mining seems to me GPU is the horse that wins the long race. As a miner my primary driver is profit / ROI, whether I mine this or that makes no difference to me.

NH reminds me of my competition in my current job in RL. They are the "hoover vacuum" My competition, regardless of small or large makes deals and sucks them up while my company is always focusing on the large deals - the competition now holds 70% of the market.

As far as other companies and their tax filing, let it go, focus on the task at hand which is making PH bigger and better. The long arm of the IRS will catch up to them sooner or later if they are not paying what Uncle Sam thinks they should.

Also this is where a lot of us go for a quick check of what an ASIC miner is bringing in, and what it cost to run it.

https://www.asicminervalue.com/miners/bitmain/antminer-s17-53th

Note that mining pools are listed on here for each miner and PH is never on this list. If I were you I would want to be here.

ryguy wrote:

Steve Sokolowski wrote:
On a side note in regards to the tax forms, Nicehash is operating illegally by operating servers in the US without sending those forms, so we reported them to the IRS. I expect that they'll either discontinue services to US customers or start issuing the forms soon. They also are operating an exchange for US customers without a money transmission license, but FinCEN rarely takes enforcement actions, so I have low hopes for action against that.

Steve, while I'm not a tax expert I'm not sure Prohashing's and Nicehash's tax situations are similar. At PH, you are directly paying for hashrate provided to you and thus are the end purchaser. Nicehash operates as a marketplace where they connect buyers and sellers through a platform, much like ebay does. This makes Nicehash a payment settlement entity, specifically a third-party settlement organization. As such they're only required to send a 1099-K if they handle over 200 transaction AND pay out over $20,000 during the course of the year to a specific user. Whether they actually do send that form to the entities as the law requires I can't say for certain, but you seem to be of the mindset that they do not.

For the second point, I'm not sure where you're getting the idea that they're operating an exchange for US customers. If I attempt to click on the exchange I get a very specific message that it is not available in my country (being the US).

We didn't report them to FinCEN yet because we hadn't looked deeply into the exchange issue, so we probably would have discovered they don't offer exchange services to US customers when we did. Thanks for pointing that out - it's one less thing for us to do.

I'm not sure that your assertion about the way their marketplace works is completely accurate because the homepage is presenting as if they are a pool to the sellers. The sellers are just directed to enter a payout address in their usernames and connect, and some people could conceivably use their system without ever knowing it wasn't a pool. But even if you're right, they still aren't sending any forms.

The issue with Nicehash is that they do all sorts of shady stuff and aren't on a level playing field with everyone else. As another example, when a company is insolvent in the US, it is illegal to give preferential treatment to any creditor without a court ordering it. They are blatantly violating the law because, presumably, they're continuing to pay bills like bandwidth costs for their servers while delaying payouts to their customers. Their only option at the time of the hack was probably to liquidate, or maybe there was some way they could have stopped serving US customers and continued operations elsewhere. I'd also wager that the way they are paying back their debts in less valuable bitcoins, as opposed to how much value was actually stolen, would be contested if someone who had standing had bothered to take the issue to trial.

Like you, I hate these forms and these regulations. It would be better if none of it were required. But if the law is going to add on all this paperwork, then they should have to comply with it just as everyone else does.

cc4506 wrote: Steve,

Yes, setup is much easier at NH, so if you are new its natural to gravitate to that.

No, they do not focus on GPU mining. Other than the application the actual mining exe's are all third party - pretty good deal really for NH. NH supports or seems to just as many algos as PH does.

Are you sure GPU's are not profitable? I have 3 L3+'s and two baikals that are sitting on the shelf. If you purchased some Z9's just a few months ago you paid 2k for them - they now return 1.22 a day. By contrast my 4 GPU rigs have been making 2.00 a day for over 2.5 years. They switch algo's for profit, when the market goes down I can reduce power for less elec consumption.

Going on 3 years of mining seems to me GPU is the horse that wins the long race. As a miner my primary driver is profit / ROI, whether I mine this or that makes no difference to me.

NH reminds me of my competition in my current job in RL. They are the "hoover vacuum" My competition, regardless of small or large makes deals and sucks them up while my company is always focusing on the large deals - the competition now holds 70% of the market.

As far as other companies and their tax filing, let it go, focus on the task at hand which is making PH bigger and better. The long arm of the IRS will catch up to them sooner or later if they are not paying what Uncle Sam thinks they should.

I think you might have misunderstood my earlier statement. For any individual miner, GPUs are probably the way to go in terms of profitability. The issue is that, in aggregate, the amount of money earned by GPUs in mining is less than the amount earned by ASICs. The easy way to see this is to look at how many bitcoins are mined per day - about $18,000,000. That one coin alone dwarfs almost all the GPU mined coins combined.

It is possible to focus on GPU mined coins, and there's money to be made there. But I just think that if one can pull off a SHA-256 mining pool that pays 2% more than Antpool, as we do, we can spend 5% of the effort that Nicehash is doing to create their software miner and their OS and all their coin maintenance, to make 50% of the money they earn. But then again, there may be something I'm not aware of in Nicehash's business model that allows them to earn more profit with GPUs. They don't clearly advertise what their fees are, and I assume that the margins in GPU mining are probably higher than they are in ASIC mining, so perhaps that's it.

Nicehash does have more algorithms, but that's sort of by design. You can see that we added Skein, but much of the time nobody is mining it. It takes a lot of time to add and test a new algorithm but we haven't seen results with the smaller algorithms.

In regards to your job, I think it's also worth considering the overhead needed to make those small deals. If the company has 30% of the market, but hires a quarter as many salespeople, then they actually make more profit than the competition. I always wonder why shows like "Shark Tank" ask for meaningless figures like "revenue," which can be extremely high in companies that make very little money.