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I am new to the crypto-coin mining. If I am mining with my own hardware, is there any difference if I join slush or gash.io? Any difference in payment? There are lot of posts that says to stay away from gash.io because of the 51% share but currently they contribute around 34% only. Should we worry about that? The thing about that is more like if everyone started to mine using gash.io it will become centralized which looses out the decentralized nature of Bitcoin right?

Also, there is the CEX.io which provides GH/s for certain BTC. But since the difficulty increases over time, the GH/s value reduces. The GH/s will mine forever but wouldn't there be a time where that power cannot do any significant mining? Isn't the case with custom hardware too? Can you elaborate on that.

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    You actually ask three questions, I will try to answer them separately. But next time, please divide them into multiple questions. – Mathias711 Jun 20 '14 at 13:51
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Slush has a 2% fee, and GHash.IO has no fee. So that's a 2% difference for starters. There would be no difference in GH/s, because that solely depends on your hardware and tweaks. There is a difference of paying between the two, Slush uses Score, and GHash.IO uses PPLNS. An explanation from these two from here. You can choose whichever you like.

Score - Score based system: a proportional reward, but weighed by time submitted. Each submitted share is worth more in the function of time t since start of current round. For each share score is updated by: score += exp(t/C). This makes later shares worth much more than earlier shares, thus the miner's score quickly diminishes when they stop mining on the pool. Rewards are calculated proportionally to scores (and not to shares). (at slush's pool C=300 seconds, and every hour scores are normalized)

PPLNS - Pay Per Last N Shares. Similar to proportional, but instead of looking at the number of shares in the round, instead looks at the last N shares, regardless of round boundaries.

According to blockchain GHash.IO indeed has ±36% hashing power. But someone digged into the 'other' sources, and saw that some blocks came from IP-addresses owned by GHash.IO, but it doesn't mean that the block is indeed mined by GHash.IO. I think it is nothing to worry about for now, but GHash.IO shouldn't keep 51% of the hashrate for longer time. Then it indeed isn't decentralised, and the coin is vulnerable for a 51% attack.

I don't know how the CEX.IO works precisely, but you're right about the part the a certain amount of GH/s will return less BTC as the difficulty goes up. But as long as they upgrade the hardware, and get new equipment with a better GH/s/W ratio, it should still be profitable. If it isn't for a big company like them, it certainly isn't for individuals. They will stop, which makes the difficulty not increasing as much, and therefor new equipment will be more rewarding. If you mean that the GH/s you bought isn't worth it, you are right too. As the difficulty rises, the rewarded BTC is going down.

  • You said about the GH/s/W ratio. So that means my 1GH/s will mine same amount of BTC forever? Difficulty rise => less BTC but how does it compare to the GH/s/W? – kadaj Jun 20 '14 at 14:47
  • No, it won't. But if the difficulty doubles, you'll need double the hash power to get the same amount of bitcoin. Because of the energy consumption increase this will result in a net loss. Therefore the GH/s/W should increase to stay profitable – Mathias711 Jun 20 '14 at 14:49

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