Our business model

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Steve Sokolowski
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Joined: Wed Aug 27, 2014 3:27 pm
Location: State College, PA
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Our business model

Postby Steve Sokolowski » Tue Dec 12, 2017 9:53 am

I wanted to make a post about our business model and our general goals so that I can direct people to this post when they ask about our future, or about our fee structure.

Some people have pointed out that pools that mine straight litecoins exist, and that some of them take fees that are lower than ours. We are aware that such pools exist, and we have made a strategic decision that we can't compete on price. Instead, we are making large investments to improve the quality of our services. To start, we hired Constance to work on the user interface, and we spent $10,000 on additional hardware. We plan to hire a customer service representative, someone to work on the backend, and a businessman to take the administrative issues off of us.

Here are some of the things that we plan to use to differentiate ourselves from other pools:

  • The ability to mine the most profitable coin - which, while LTC is dominant now, will likely become important again once this current LTC run is over
  • Payouts in any coin, with an expansion soon to include coins that cannot be mined
  • Improvements to stability, and the addition of other algorithms
  • Solo mining that is supplemented by merge mining profits even when blocks aren't found
  • The ability to talk to a real person by phone or E-Mail - something that we will be hiring more people for soon
  • Live data, which you'll be seeing a lot more of in the coming months
  • Pay per share model, which means you get paid the same for each share regardless of whether the pool finds blocks or not

But I hope that the biggest reason why customers mine with us is the idea of being a business that strives to comply with all regulations and having accountability. In our view, there is an expected value of an organization going bankrupt and running off with the money that needs to be factored into mining decisions. People who mined with Nicehash and made 0.91 bitcoins, and had another 0.09 that were stolen, actually paid a fee of 10% on top of whatever their normal fee was. Since we don't hold large amounts of money and you know who we are, that "expected value" of loss due to theft isn't present. Our hope is that miners will see that there are hidden costs in mining with pools where it is difficult to contact the owners, where you don't know exactly who is in charge, and where they are located in jurisdictions that do not enforce laws effectively.

To provide that assurance, we have greater expenses than other pools. For example, we need to pay taxes, while completely anonymous pools don't. We also need to pay lawyers to make sure that we're not in violation of laws.

In conclusion, this post is designed to lay out some of our reasoning behind our business model. We recognize that there will always be people who want to eek out 1 or 2% more profit by going with a pool that charges less, when LTC is dominant. I think that, as the industry matures, big pools will come online from large institutions, and they will also be charging higher fees. On the other hand, we hope that we are providing value with the additional features we are offering, and plan to continue to aggressively invest into the pool to provide an experience that is better than that of other mining services.
Last edited by Steve Sokolowski on Tue Dec 12, 2017 12:22 pm, edited 1 time in total.
nemesis-t-warlock
Posts: 23
Joined: Sat Nov 04, 2017 2:49 pm

Re: Our business model

Postby nemesis-t-warlock » Tue Dec 12, 2017 10:55 am

Thanks Steve.

While this does go toward explaining what your approach is, it might not go too far in justifying the expense for people to continue supporting you right now.

It's true when you say that LiteCoin is dominant on Scrypt now, but prior to that we really only tended to see BitConnectCoin as the other coin in the mix. BCC disappeared and LiteCoin suddenly became totally dominant meaning that we aren't really coin switching anymore.

X11 seems better in that mining is spread between more coins but it is hard for anyone to truly justify making significantly less than pure LiteCoin mining.

You have focused a lot of your metrics on the monetary value of the coins mined but it is very difficult to compare the amount of coins actually mined. Don't get me wrong here, I really like this site, have recommended it and continue to support it, but it is hard for me to justify (even to myself) sticking with PH for Scrypt when it seems I am getting far fewer LiteCoins than on a pure LiteCoin Pool (The fee doesn't seem to be the key difference here). The stability problems (a number of which are out of your control admittedly) have not helped.

Going to a LiteCoin pool where I can clearly see my miners are working, what their hashrates are, get reliable notification if they stop mining, and clear and detailed metrics of what they are mining is very attractive when compared to what we have been experiencing over the last few weeks. We can't see our miners, the only notification we can rely on to tell us our miners disconnected (without other tools) is the notifications we get from our backup pools when your comes back online! We also cannot compare what we earned because even mining just one coin we see cash value rather than coin amounts.

Keep doing what you doing but realise you take a hefty percentage, possibly for good reasons, but right now the financial benefits you used to offer are not there. Of the benefits you list above only the following to me seem valid right now:

- Payouts in any coin (I like this)
- Solo mining that is supplemented by merge mining profits even when blocks aren't found (I don't use this)

The rest are not true right now, they are for the future. You are asking us to help you pay for this now. Don't be surprised if not everyone is willing.
Jamin
Posts: 23
Joined: Fri Dec 15, 2017 9:45 am
Location: United Kingdom

Re: Our business model

Postby Jamin » Fri Dec 15, 2017 10:12 am

Just a quick sidenote...

Her Majesty's Revenue and Customs don't tax earnings on Crypto. If you incorporated or moved to the UK we would all save a pretty penny...
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AppleMiner
Posts: 739
Joined: Sat Sep 30, 2017 1:44 pm

Re: Our business model

Postby AppleMiner » Fri Dec 15, 2017 1:02 pm

nemesis-t-warlock wrote:We also cannot compare what we earned because even mining just one coin we see cash value rather than coin amounts.
there should also be coin# listed at all times.

While the $ equivalent on the daily payout may not be correct, the number of coins currently earned for the day should be reporting correctly.
If you expand the coin you have as a payout, it should list the coin# since the last payout eligible update the previous midnight.
nemesis-t-warlock
Posts: 23
Joined: Sat Nov 04, 2017 2:49 pm

Re: Our business model

Postby nemesis-t-warlock » Fri Dec 15, 2017 1:08 pm

AppleMiner wrote:
nemesis-t-warlock wrote:We also cannot compare what we earned because even mining just one coin we see cash value rather than coin amounts.
there should also be coin# listed at all times.

While the $ equivalent on the daily payout may not be correct, the number of coins currently earned for the day should be reporting correctly.
If you expand the coin you have as a payout, it should list the coin# since the last payout eligible update the previous midnight.


What I mean is we see a $ historical chart. We don't see a coin earning chart. Sure I can look at my payut histiry and try to work it out manually but the charts don't do it automatically so comparisons aren't so easy.
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AppleMiner
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Joined: Sat Sep 30, 2017 1:44 pm

Re: Our business model

Postby AppleMiner » Fri Dec 15, 2017 1:17 pm

Really?

Hover on one of the dots on the line graph, earning by coin payouts.
That doesnt show the number of coins paidout?

The total earnings shows pay out $$$ per day.
nemesis-t-warlock
Posts: 23
Joined: Sat Nov 04, 2017 2:49 pm

Re: Our business model

Postby nemesis-t-warlock » Fri Dec 15, 2017 4:56 pm

AppleMiner wrote:Really?

Hover on one of the dots on the line graph, earning by coin payouts.
That doesnt show the number of coins paidout?

The total earnings shows pay out $$$ per day.


So it does! Thats a bit better. hadn't noticed as I’m normally on an ipad.
Swift1
Posts: 1
Joined: Fri Dec 29, 2017 4:55 am

Re: Our business model

Postby Swift1 » Fri Dec 29, 2017 5:09 am

I just started using your pool this evening and i have to say, I'm very impressed. Great work!

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