Resolved profitability issues

[Steve Sokolowski]

After 100 hours of research, we have finally been able to determine why the pool's profitability had turned lower in recent times.

Chris had been running queries for about a week attempting to correlate low profits with a number of factors. He focused on what had changed at the time profits had turned lower, which was some time last month. We had released multiple features, and therefore Chris examined every one of them in turn. With nothing else seeming to have changed, it appeared that the reintroduction of the "r=" parameter to set a static work restart interval or the orphan mining bonuses were responsible. Over the past few weeks, we reverted each of the changes, but the issue persisted.

Yesterday, we considered shutting down until we could offer better service to our customers, but Chris had a great idea. While he had tried to correlate profit by coin, and by time, one of the correlations Chris had not thought to research was whether certain miners contributed less profit than others. It turns out that there were some miners who have luck that is significantly lower than average for the most difficult coins. There is a clear separation between these miners and other miners, and when low-luck miners are excluded, the difference in profitability is eliminated entirely.

After determining that some miners had worse luck than others, I spent a long time developing an algorithm that can filter these miners who are not contributing to the pool, and I'm now confident that they can be detected with a false-positive rate of less than 1 in 5000. By taking steps to address these miners, we can restore the pool to normal profitability.

We aren't exactly sure what would cause miners to have luck at finding litecoins that is near zero. If the issue is a firmware bug, the bug is pretty strange because only certain shares are missing, and the shares tend to be the ones that find blocks. If someone wrote software to purposely introduce bad luck, that also makes little sense because they gain no benefit and stand to lose money. While we can't make sense of the reason for this problem, it does seem to occur at cloud mining services, suggesting that people are renting this bad hashrate and aren't aware that they aren't getting what they're paying for. Perhaps the cloud hashing services themselves have bugs in their proxy software, because it again doesn't make sense why someone would set such miners to a cloud hashing service.

To eliminate the impact from these miners, we will be making an immediate change, and then will implement a long-term solution within two weeks. Beginning tomorrow, the query I described above will be run every morning, and when it detects one of these misconfigured miners, it will forfeit earnings for that miner from the previous day. This possibility of forfeiture has been included in the documentation so that everyone is aware of it. We recognize that forfeiture may occur in error, but at a rate where normal miners would expect to lose a day of earnings no more than once every 15 years. On the other hand, miners who exhibit this issue will find that they forfeit profits every day until they fix the issue. As always, Chris will be available to answer questions and assist users who are targeted by the algorithm by explaining the problem and assisting in its correction.

In the long term, we can completely eliminate this problem by assigning these miners to lower-difficulty coins. Because the miners only seem to lose the highest difficulty shares, they can be be assigned to the most profitable coins that are low difficulty, where they will lose almost zero earnings due to luck. Once implemented, these miners will actually assist the rest of the pool, becuase the rest of the pool with normal luck miners will be able to mine more difficult coins and have fewer work restarts, earning them greater profits instead. These suboptimal miners would be unwanted at other pools, so we can advertise that we welcome people that have this bug. Once we implement this change, we will eliminate the forfeiture because it will no longer be necessary.

We expect profitability to return to normal by tomorrow. Thanks to everyone for your patience, and we look forward to releasing the permanent fix within the next few weeks!

[Chris Sokolowski]

To clarify one comment Steve made, this change should affect very few people. Of the 200+ workers who mine with our site on any given day, only five users with this issue have been found.

As Steve stated, I will be happy to answer any questions. If you experience any problems related to the change, then feel free to contact me on this forum or at chris@prohashing.com.

[Steve Sokolowski]

As an update to this one, Chris saw an immediate improvement and profit is expected to increase another 7% today. There were four forfeitures last night for a total of 0.13 bitcoins. This money will be distributed to other users through the 7% increased profits today.

[gaanthony]

Great! I can already see a difference. Hopefully, others that have gone mining elsewhere will return soon. I really like what you two have put together, maintain and continue to improve at Prohashing. I spent a few days at another pool to maintain steady profitability while you worked the new bugs out and it's looking like you've squashed them. Thanks.

[Steve Sokolowski]

Great! I can already see a difference. Hopefully, others that have gone mining elsewhere will return soon. I really like what you two have put together, maintain and continue to improve at Prohashing. I spent a few days at another pool to maintain steady profitability while you worked the new bugs out and it's looking like you've squashed them. Thanks.

Thanks. You seem like you're pretty connected, so if you happen to hear any more about why these miners have such low luck, please let me know. They might explain why pools like Clevermining have profitability less than LTC, as it takes a lot of data collection to reliably detect them.

[Minerman]

I have done a test:

Mining at Litecoinpool gave me 4.6 LTC in 24 hours and with Prohash 3.73 LTC. (and I dont know if that is with the forfietbonus of 7%)
Prohash only pays around 80% of Litecoinpool! That is a big difference.
I am using no arguments other than d=16384

Are you sure you have resolved the issues?

[Chris Sokolowski]

When did you perform the test? I would only suggest comparing the results obtained within the past 24 hours on this pool. I am also still fine-tuning the changes, so there may be a few more percent improvement in profitability beyond that. At the absolute worst, we should be no worse than 5% less than Litecoin, which is assuming there are no other coins more profitable than Litecoin and we subtract the 4.99% pool fee. However, that shouldn't happen even if Litecoin is the best coin because we are merge-mining, so that will add back some profit. I think this may come down to differences in work restart behavior. Are you comparing the exact same miners on both pools?

[Minerman]

I did the test within the past 24 hours and with the same miner.
I did another test now for only one hour and the result whould be equivalent to 3.55 LTC for 24 hours.
I know it is a short timeframe but still shows something is wrong.

That means I whould lose 30 LTC or 118 USD every month mining at Prohash compared to mining at litecoinpool.org.
Remember that they pay 103% of LTC-mining due to merged mining.
And the reported hashrate is around 10% lower at your pool. I guess because of the coinswitching and restart time.
If I remember right I used to make at least one USD more daily, mining at your pool than litecoinpool... back in the days.
Please bring them old days back!

[GenTarkin]

Well, litecoinpool is currently mining at 103% w/ no fee ... just like stated.
If prohashing mined at 100% PPS LTC, u would be making 100% - 3% - 4.99% @ prohashing when compared to litecoinpool
So, theres a good 8% loss if prohashing were to mine @ 100% LTC

Also, for my Titan at least, add to that another 4-5% in rejects. So, a good 12% loss in total.

[CritterDog]

I ran a similar test last week with similar results. I will run a new test starting tonight at the change over to next day time which is 11:pm Central time. This time I will use just one of my miners to rule out any problems of multible miners. Last test I had 5 miners running. Working together we can hopefully figure this out.