Status as of Friday, December 8, 2017

[Steve Sokolowski]

Good morning!

• Now that we got through yesterday's crazy day, I have some time to sit back and provide an overview of what's going on.
• First, the difficulty of litecoin increased by 25%, and is expected to increase by another 40%, pushing profits below 2 cents by tomorrow. Some former Nicehash miners have commented on the low profitability, but unfortunately I think it's reasonable to expect that scrypt profitability is in the beginning of a decline to the mean, which will probably be less than 0.2 cents given historic levels. All pools will continue to drop across the board at an increasing rate.
• We lost a lot of money over the past few days. On Tuesday, we withdrew $40,000 from our accounts to pay miners who were mining during the orphan period for bitconnectcoins. On Wednesday, the price of bitcoins rose dramatically, causing enormous losses since we were mining litecoins and had to wait 100 blocks to turn them into bitcoins. We need to figure out a better way to protect ourselves against massive price rises like that and will be investigating it sometime soon.
• My immediate goals for this weekend are to make the system more resilient. We're pretty confident that the system is now stable, but starting the components up in the wrong order can cause strange results. I want to figure out why that is and to make the system better able to recover from errors, in case they happen again. After that, my primary goal is going to be converting the Coinbase payouts to use litecoins, since the bitcoin transaction fees are ridiculous.
• As is usual with these releases, the problems that crop up are typically not related to the release itself. For example, during the x11 release, we found bugs in the mining server that had always existed, but were never exposed until more people used them. Just to provide a brief overview of what we fixed yesterday: first, the system was going on and off in the morning and it took us about 6 hours to determine that there simply wasn't enough memory in the crossbar.io WAMP server. The server ran out of memory simply because there were more customers drawn in by the release, not as a result of to a bug. Then, we saw that some miners were disconnecting and reconnecting, and found that our bandwidth had been exhausted. Again, the cause was that more customers required us to increase the limit, rather than there actually being a bug.
• Chris corrected yesterday's balances and hashrates, so all customers should have seen an increase overnight.
• To enable SHA-256 mining, we're going to need new servers (since the servers we had already dedicated to it were used up by this sudden increase in miners) and more reserve (since we lost so much money during yesterday's bitcoin increase). A bitcoin block is worth almost a quarter million dollars, so to mine those with pay-per-share, we will need a huge amount of reserve.
• Chris is working on adding new coins to improve profitability, but I don't think we're going to get much out of that. He's only found four new coins so far. He'll also be discontinuing Novaexchage's coins this weekend and making final payouts of those.

[bellaminer]

Good morning!

• Now that we got through yesterday's crazy day, I have some time to sit back and provide an overview of what's going on.
• First, the difficulty of litecoin increased by 25%, and is expected to increase by another 40%, pushing profits below 2 cents by tomorrow. Some former Nicehash miners have commented on the low profitability, but unfortunately I think it's reasonable to expect that scrypt profitability is in the beginning of a decline to the mean, which will probably be less than 0.2 cents given historic levels. All pools will continue to drop across the board at an increasing rate.
• We lost a lot of money over the past few days. On Tuesday, we withdrew $40,000 from our accounts to pay miners who were mining during the orphan period for bitconnectcoins. On Wednesday, the price of bitcoins rose dramatically, causing enormous losses since we were mining litecoins and had to wait 100 blocks to turn them into bitcoins. We need to figure out a better way to protect ourselves against massive price rises like that and will be investigating it sometime soon.
• My immediate goals for this weekend are to make the system more resilient. We're pretty confident that the system is now stable, but starting the components up in the wrong order can cause strange results. I want to figure out why that is and to make the system better able to recover from errors, in case they happen again. After that, my primary goal is going to be converting the Coinbase payouts to use litecoins, since the bitcoin transaction fees are ridiculous.
• As is usual with these releases, the problems that crop up are typically not related to the release itself. For example, during the x11 release, we found bugs in the mining server that had always existed, but were never exposed until more people used them. Just to provide a brief overview of what we fixed yesterday: first, the system was going on and off in the morning and it took us about 6 hours to determine that there simply wasn't enough memory in the crossbar.io WAMP server. The server ran out of memory simply because there were more customers drawn in by the release, not as a result of to a bug. Then, we saw that some miners were disconnecting and reconnecting, and found that our bandwidth had been exhausted. Again, the cause was that more customers required us to increase the limit, rather than there actually being a bug.
• Chris corrected yesterday's balances and hashrates, so all customers should have seen an increase overnight.
• To enable SHA-256 mining, we're going to need new servers (since the servers we had already dedicated to it were used up by this sudden increase in miners) and more reserve (since we lost so much money during yesterday's bitcoin increase). A bitcoin block is worth almost a quarter million dollars, so to mine those with pay-per-share, we will need a huge amount of reserve.

I am one of those miners that should have seen an increase. How do I go about doing that? I tracked earnings till about 10PM and projected earnings of 80 dollars. I woke this morning to find 82 in earnings.. no adjustment appears to have been made.

So how do we track what 'bump' we received in compensation? I appreciate the effort, but need transparency in the actual amount applied.

[nemesis-t-warlock]

I agree with the question above. I did see the correction (thank you) but on a previous occasion where corrections were meant to happen I didn't see it (or at least couldn't tell). There's obviously some mechanism being used to perform this correction that knows which accounts to affect and by how much. Surely it would save you having to deal with a whole bunch of 'what did i get/I can't see the amount' questions if you could tag onto the end of that a notification of some kind to those that received a correction stating what it was.

Thanks for making the correction though.

[nemesis-t-warlock]

One other question. You posted that you had bandwidth issues and were trying to get more. I've not seen anything that says if you were successful or not.

I have some of my miners on other pools right now simply because I can't trust that they are doing anything here because the portal keeps saying no valid shares or calculating hashrate because of the disconnections. It would be good to know if you can handle the capacity now because of a bandwidth increase or whether you are going to put a cap on workers again to keep it within manageable limits.

[Raietzu]

While it's hard to say without intimate knowledge of your financial infrastructure, it shouldn't be too problematic to hedge against sudden price increases in coins that you don't mine yourself (especially with futures opening up soon in your country). I don't know if you have an in-house economist or know one who is willing to help you out, otherwise feel free to hit me up to discuss options.

[becomingsuperfly]

Is it feasible that the attack on Bitconnect mining is the owner of the Bitconnect system? To remain profitable they need to have the price of BCC continually increase. It is still doing that on exchanges because less is being produced. A couple days ago they froze their exchange because the price was dropping rapidly. This kind of smells like an inside price control job.

[Steve Sokolowski]

One other question. You posted that you had bandwidth issues and were trying to get more. I've not seen anything that says if you were successful or not.

I have some of my miners on other pools right now simply because I can't trust that they are doing anything here because the portal keeps saying no valid shares or calculating hashrate because of the disconnections. It would be good to know if you can handle the capacity now because of a bandwidth increase or whether you are going to put a cap on workers again to keep it within manageable limits.

The bandwidth was increased successfully last night.

I haven't been able to reproduce connectivity issues, but I'm running a miner and logging the output to see if there are any disconnects. It's possible that the connectivity issues are affecting specific people who are using a type of miner we aren't using to test. We'll get to the bottom of it as soon as possible.

[Steve Sokolowski]

I agree with the question above. I did see the correction (thank you) but on a previous occasion where corrections were meant to happen I didn't see it (or at least couldn't tell). There's obviously some mechanism being used to perform this correction that knows which accounts to affect and by how much. Surely it would save you having to deal with a whole bunch of 'what did i get/I can't see the amount' questions if you could tag onto the end of that a notification of some kind to those that received a correction stating what it was.

Thanks for making the correction though.

I just talked to Chris about these corrections and determined that he didn't actually need to make many corrections. The changes were only a few percent. Miners were credited correctly, but our blocks weren't submitted correctly, so the problem was our own.

[nemesis-t-warlock]

Thanks for the feedback.