Mining profitability

[cdt]

I've noticed a significant decline in profitability in the last few weeks, and I'm curious if this is just normal decay or if it's related to the price of Bitcoin going down (since most other coins are valued relative to Bitcoin, aren't they)? Or maybe some other factor I haven't considered?

[peck0081]

The LTC reward halved yesterday from 50 to 25 and instantly became half as profitable. Some hash power then left Litecoin for other profitable scrypt coins, raised their difficulty, and in turn lowered their profitability. All that and $USD/BTC has been decreasing. I'm hoping it will all even out somewhere between today's and last week's profitability soon.

[Steve Sokolowski]

There are several factors coming together all at once:

• The litecoin block reward halved, causing mass selling of all the other coins once pools started mining them
• BTC price has declined over the past week by 25%
• Average temperatures are beginning to decline this week, meaning that more and more air conditioners are going off and allowing miners to turn on at a profit

Profitability averaged around 3.9 cents for most of the first part of the year, and then rose in June with that bubble. It seems to have stabilized at its pre-bubble value, which is interesting.

[cdt]

Hmm, thank you both for your feedback.

I knew about the halving, although I was keeping an eye on the hashing distribution and could see that LTC was only a fraction of the total distribution, to varying extents. And I could also see in the charts that other coins were similarly profitable, although I didn't take into account that their difficulty would rise and certainly didn't take into account the seasonality aspect, which I'm just becoming aware of.

Well crap, at $0.039/MHs, that blows a hole through the bottom of my financial projections. I guess I'll have to see what I can do in terms of strategic payouts in other coins.

[Steve Sokolowski]

You could try taking payouts in Ethereum, once it's offered within the week. I'm not sure that proof-of-stake coins like Ethereum have a future, but Ethereum has good features otherwise and it's all the rage on Poloniex.

[cdt]

Thanks for the tip! I'm in the process of checking this out now.

[Falcon27]

I have a question to ask on this whole mining profitability subject.
If I am not mining, selling, or trading in LTC, then why would this affect the mining of all the other coins?
and if you are or were trading for LTC and then buying the other coins that we are being paid out in, then why not do it in BTC instead?
Because I have noticed that since your stats went down over the last week or so from like 9.3cents per mh/s to the 3.xcents it is at the moment no matter what coin i mine, it is indeed almost futile to mine it here. Apparently I am missing something, feel free to enlighten me.
Thanks.

[cdt]

I have a question to ask on this whole mining profitability subject.
If I am not mining, selling, or trading in LTC, then why would this affect the mining of all the other coins?
and if you are or were trading for LTC and then buying the other coins that we are being paid out in, then why not do it in BTC instead?
Because I have noticed that since your stats went down over the last week or so from like 9.3cents per mh/s to the 3.xcents it is at the moment no matter what coin i mine, it is indeed almost futile to mine it here. Apparently I am missing something, feel free to enlighten me.
Thanks.

As peck0081 pointed out above...

Some hash power then left Litecoin for other profitable scrypt coins, raised their difficulty, and in turn lowered their profitability.

This seems logical, don't you think?

[pumaro]

wow profitability just increased to over .04 /MH /day
there must be alot of work going on to lock in a btc price per minute, are there constant trades going on behind the scenes here?
I ask because even if I trade alt coins on an exchange you still need someone to buy them and it usually takes some time, how does this website do it so quickly???

[tucsondirect]

wow profitability just increased to over .04 /MH /day
there must be alot of work going on to lock in a btc price per minute, are there constant trades going on behind the scenes here?
I ask because even if I trade alt coins on an exchange you still need someone to buy them and it usually takes some time, how does this website do it so quickly???

Prohashing.com utilizes multiple trading platforms, buffer balances, and multi-hop coin conversions there aren't a lot of "Dumps" so the markets for the coins that they trade are kept more stable (especially true for some of the smaller coins). Steve and Chris have put a lot of hard work into their formulas to ensure that they are able to act quickly to market changes