Status as of Thursday, November 2, 2017

[Steve Sokolowski]

Hi!

• Yesterday's bitcoin payouts cost $66 in transaction fees, an all-time record. As a result, I've asked Chris to raise the minimum bitcoin payout threshold to $1000, up from the current $250. You can still set a custom threshold, but the fees will be about $6 per transaction.
• I wanted to give some advance warning that soon it is likely we will be requiring two-factor authentication in order to earn balances in bitcoin. Users who prefer not to use two-factor authentication can choose other currencies for payout. If transaction fees rise above $200, it is also possible that we will mandate the payment of transaction fees by customers regardless of amount.
• Any suggestions people might have to deal with this problem are greatly appreciated, but I don't see any way around the fact that the Core has made bitcoin an unusable network and that dramatic steps like these are necessary to deal with the problem.
• This weekend, I'm going to investigate the possibility of not assigning customers to coin networks with difficulties below a certain level, like 1 or 5.
  While those networks can be highly profitable, the difference they make in the big picture, in total, may be as little as 0.5% of profitability. If we disable them, we can significantly increase capacity.

[AppleMiner]

Hi!
we can significantly increase capacity.[/list]

Of the pool to accept more workers? or the capacity of the pool to pick coins faster and reduce the stale shares?

[mck]

• Yesterday's bitcoin payouts cost $66 in transaction fees, an all-time record. As a result, I've asked Chris to raise the minimum bitcoin payout threshold to $1000, up from the current $250. You can still set a custom threshold, but the fees will be about $6 per transaction.

Hi Steve, what about the $50 Coinbase payouts where BTC is the intermediate currency? In the Prohashing Help file also Ethereum is mentioned (next to BTC) as an intermediate currency to receive $-payments via Coinbase. Is this still an option and if so, how? And maybe LTC could be an option as well?

[NullProto]

Overheard somewhere: “1K??? Seriously? That's a great way to limit pool participation and fix the performance problems.”

I know the PH guys hate BTC based on your many rants, but you have wrong, very very wrong, the bigger picture. From a purely technical perspective you are spot on: Bitcoin is a lumbering dinosaur compared to all the new innovations. The confirmations and delays are long. The features are short. The fees are high. The original vision lost. The disgust with the Bitcoin Core team’s lack of decisiveness, overall divisiveness and inaction, and combative nature is real. Though Core is not an anomaly: under the covers nearly every mature organization is a tactical and functional disaster with an even worse strategy. It’s the human condition, and Core is no exception.

However the best technology in a class does not win. It happens over and over and over and I see it first-hand all the time in my career as an Engineer, from KHz machines to the GHz machines of today. BTC is the clear established leader. The ETH “flippening” flopped. New crypto and features are everywhere. Alternative roadmaps look brilliant. BUT: It is EXTREMELY hard to disrupt something. There are examples in history of displacement: The typewrite vs computer, car vs horse and buggy, iPhone vs feature phone. The first two were a painful multi-year process with carnage of many innovators. How many, besides gamblers seeking the quick wins, want the bulk of their crypto value exposed to such carnage during a transition? But, Oops, even iPhone was far from the earliest or best when it was introduced – I saw several examples of the same or better technologies packaged quite similarly well before iPhone “burst on the scene”. Apple actually innovated nearly nothing. It did have market presence through its own popular yet related, leveragable products with an ecosystem that could affect the market. It made a great, complete package people could accept and had a huge established fan base uncaring of costs to enable the step function disruption. And I’m a diehard Apple-hater, but I respect them.

Do we see an entrant in any aspect (technology, branding, trading, services, anything…) of crypto that can force this shift, fast or slow, on a large scale? I don’t. I’m watching. Bottom line: Market share and awareness wins over technology, ease of use, minor (often even major) cost advantages, and is in spite of those who drive it messing it up. I don’t even –like- my own opinion here, as I’m no champion of “BTC”…I’d really like to see LTC, Dash, ETH, or many others be the primary crypto currency of the world but that isn’t the situation we live in. Like the US Dollar being the basis for oil trade, several foreign currencies, and many other goods and services, BTC is the basis for everything crypto.
$66 for a day's payout really isn't that bad, though irritating. Yes, it all matters to the bottom line of your business but have you guys missed the BTC year over year uptrend vs any other crypto that you can place a large, real value in with some hope of a mitigated risk of ruin? The differential in value of BTC vs others has grown, will continue to grow, such that pool user's value transferred, retained, and future growth far outweighs the daily $66 over the long haul. You are forcing clients who desire BTC as their primary value store to either accept something other than BTC, exchange it themselves which will collectively cost well over $66, or find the door.

I'm not even speaking about the last month's ridiculously fast paced growth through 6K, now 7K - I'm braced for a near-term correction of unknown duration at some point (perhaps after the impending 2x fork), though the long term trend is firmly in place. Even through the "dark days" of 2015 and 2016 and the desire to return to the 2013 frenzied peak, the longer term growth still beat most anything. Other than calendar year 2014, it's difficult to look at BTC's price and not be impressed by the growth. Even for 2014 if one expands, contracts, or shifts just a little the window of view to filter the late 2013/early 2014 bubble the result is not bad compared to a recession or depression.

BTC has achieved awareness and critical mass and the 3 characters “BTC” has a commanding lead on all comers, facts, features, and technology be damned. Until that commanding market lead changes, or begins to change for the "non-techie" masses BTC will rule the day in business, trade, investment grade opportunity, store of value, protection from government monetary manipulation and abuse, and exchange much like the Dollar does today despite our desires and opinions. The tsunami of fiat money flowing into BTC won’t be stopped anytime soon. Billions, by millions of participants…and perhaps trillions institutionally behind that. It will not matter how many forks BTC goes through due to greed, politically based campaigns for a feature or technology, the fundamental underlying technology advantages and deficits. It will not matter the inaction and dysfunction of Core. Even segwit2x will either win if retains "BTC" or fail if it goes to "BTX" or something else. Period. I’m watching for the landscape to turn. It isn’t yet.

There is a reason that despite the $250 withdraw limit imposed by ProHashing months ago, and despite Steve’s rants, warnings, and properly articulated arguments, well over half of all payouts continue on BTC. I expect ProHashing’s change to a $1k withdraw limit will certainly lower the BTC payouts proportionally…because many will not change but leave. Perhaps ProHashing can afford the client loss with more willing participants that fall in line.

This is all my opinion based on decades of markets and innovation observation and participation, and quite a few years of crypto participation. Yes some or many may rebut my opinion here; there are in fact good points to be made, I encourage discussion and can always be convinced by meaningful data I’m wrong. I do my best to take the long view. But at this time I have to vote with my feet aimed squarely at the PH exit door.

Thanks Steve and Chris for the ride, it has been good, your work has been appreciated.
-NP

[AppleMiner]

You are forcing clients who desire BTC as their primary value store to either accept something other than BTC, exchange it themselves which will collectively cost well over $66, or find the door.

No. They are saying you now have to save up MOAR than before, to meet the minimum transfer out of the pool without incurring a fee.
No one is forcing anyone to do anything. Just the minimum free withdrawl limit on BTC was raised. That was all.
Clients who desire BTC can still get BTCs. No one is forcing clients to leave just because they wish payments in BTC.

I think you are over exaggerating your conclusions.

[Aura89]

Very long post

That post was exceptionally long, all to ignore the fact that you don't have to do the free withdrawal setting.

[Steve Sokolowski]

I think the reply is a little over the top. Remember that Coinbase charges for every transaction, and so do companies like NiceHash. We're paying $66/transaction to pay people out and don't charge for it.

I also want to point out that 2/3 of payouts are not coming in bitcoins; about 30% are. 2/3 of customer debts are owed in bitcoins, but that's because we need to keep the payout threshold higher and the debts grow larger.

I just don't understand why the Core holds the positions they do. The idea that bitcoin should be capped at 1MB blocks just doesn't make logical sense.

[centar]

I think the reply is a little over the top. Remember that Coinbase charges for every transaction, and so do companies like NiceHash. We're paying $66/transaction to pay people out and don't charge for it.

I also want to point out that 2/3 of payouts are not coming in bitcoins; about 30% are. 2/3 of customer debts are owed in bitcoins, but that's because we need to keep the payout threshold higher and the debts grow larger.

I just don't understand why the Core holds the positions they do. The idea that bitcoin should be capped at 1MB blocks just doesn't make logical sense.

Steve, I'm sorry but this is a ridiculous position. If you don't want to pay those fees there are two simple solutions:

1.) Manually lower the fee that you use when sending payments, I'm fairly certain users would rather wait a day or so for the transaction to clear the mempool rather than pay the fees. At the minimum you could give the user the option.

2.) The simpler solution is just send the payments using a segwit address, you should see a pretty significant reduction in transaction costs. I assume you probably have some moral objection to segwit as per your prominent big-block position, but shouldn't you use the cheapest option available?

I think you guys are great developers and have an awesome product that can be something special if/when you decide to expand and commit to the project. I don't, however, feel that you are the best businessmen in many situations. As you've stated yourselves, you have very fierce competition that has some significant advantages over you in several areas. You are operating on a razor's edge of competitiveness and you really, really need to maintain any advantage you can over other pools. To me this feels like you are mixing your personal feelings about Core at the cost of best business practices.

[centar]

I think the reply is a little over the top. Remember that Coinbase charges for every transaction, and so do companies like NiceHash. We're paying $66/transaction to pay people out and don't charge for it.

I also want to point out that 2/3 of payouts are not coming in bitcoins; about 30% are. 2/3 of customer debts are owed in bitcoins, but that's because we need to keep the payout threshold higher and the debts grow larger.

I just don't understand why the Core holds the positions they do. The idea that bitcoin should be capped at 1MB blocks just doesn't make logical sense.

Also, "Core" has repeatedly said they are not adverse to the idea of a block size increase, they just want to do as slowly as possible to ensure they don't outpace technology and storage capacities of the average user.The larger the blocks become, the harder it is for average every day users to run BTC nodes. The fewer users running nodes, the more centralized the network becomes. Decentralization is a core tenant of what Bitcoin is.

I don't want to come off as a Pro-Core fanatic, because there are a lot of things they have done I don't agree with, but I just get tired of the same tired arguments that are just repeated as a mantra in the name of some vain crusade against the "evil" core team. Core is not all-powerful, they do not control Bitcoin. It's an open project and anyone can and should contribute.

[Aura89]

I think the reply is a little over the top. Remember that Coinbase charges for every transaction, and so do companies like NiceHash. We're paying $66/transaction to pay people out and don't charge for it.

I also want to point out that 2/3 of payouts are not coming in bitcoins; about 30% are. 2/3 of customer debts are owed in bitcoins, but that's because we need to keep the payout threshold higher and the debts grow larger.

I just don't understand why the Core holds the positions they do. The idea that bitcoin should be capped at 1MB blocks just doesn't make logical sense.

Steve, I'm sorry but this is a ridiculous position. If you don't want to pay those fees there are two simple solutions:

1.) Manually lower the fee that you use when sending payments, I'm fairly certain users would rather wait a day or so for the transaction to clear the mempool rather than pay the fees. At the minimum you could give the user the option.

2.) The simpler solution is just send the payments using a segwit address, you should see a pretty significant reduction in transaction costs. I assume you probably have some moral objection to segwit as per your prominent big-block position, but shouldn't you use the cheapest option available?

I think you guys are great developers and have an awesome product that can be something special if/when you decide to expand and commit to the project. I don't, however, feel that you are the best businessmen in many situations. As you've stated yourselves, you have very fierce competition that has some significant advantages over you in several areas. You are operating on a razor's edge of competitiveness and you really, really need to maintain any advantage you can over other pools. To me this feels like you are mixing your personal feelings about Core at the cost of best business practices.

What other pool can you mine multiple coins without having to manually switch and get paid out in many, many different kind of coins?

As to the other issues, again, you don't have to go free.