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.