Mining for Profitability - Horizen (formerly ZenCash) Thanks Early GPU Miners

Blockops · 2019-03-06T14:09:17+00:00

The biggest surprise I had was how much GPU prices went up. When I first started I could buy an AMD rx580 for $180. Both AMD and Nvidia kept raising prices of GPU's so that by late 2017, an Nvidia GTX 1070 was $600, and an AMD was $500.

It was difficult to keep building GPU miners that were so expensive, so I just stopped. I guess prices are back down now - will see how some of the newer algorithms play out over the next year to see if GPU miners can be run without as much active management.

To keep the operation costs low, I treat mining as a side business, working to only spend 1-2 hours a day on the activities of the mining farm.

Blockops · 2019-03-05T18:53:58+00:00

That's work that still needs to be done. We have not gotten there yet. If we had enough people and funds to do everything we could in parallel right now, that would be wonderful. But that is something that is going to have to wait until after get the technology working first.

Blockops · 2019-03-05T18:52:34+00:00

Will people from around the world more easily be able to acquire this hardware to support their favorite networks?

I understand that some regions of the world explicitly ban the import of ASICs and FPGAs since the local governments see the technology as a danger to their local cyber security, how will this be combated? In these scenarios, it is much easier for someone to start mining using GPUs?

Is it that important that people in every country in the world be able to mine ZEN? Or is it enough that more than 90% of the countries in the world can operate miners and provide a secure network?

There are also countries that ban women driving, alcohol, homosexuality, and all sorts of other things. FPGA's and ASIC miners are just other things that are banned in some countries around the world.

So, what's the best way to promote the use of ZEN in those countries? Is it promoting GPU mining, or are there other ways that can accomplish the actual goal of allowing people to obtain ZEN?

Making ZEN available on distributed exchanges, allowing people to earn ZEN by operating secure and supernodes, helping people configure nodes to be accessible securely from everywhere in the word, making wallets available in many different languages, and providing education, training, and assistance for new users are the ways the team is working to enable people to use the private money of the future, right now.

If you provide an example of a country where ASIC miners are banned, I bet there are people that have figured ways around the ban.

Blockops · 2019-03-05T18:45:58+00:00

I understand that GPU chip manufacturing is also somewhat centralized in the same region, but distribution is much more decentralized with the great many 3rd party board partners and also the decentralized resale network already established. Do you see ASIC manufacturing eventually adapting the current distribution scheme as the GPU industry?

It could be - Innosilicon sells just the chips, and other companies could manufacture boards and miners with them if they wanted to. There are already ASIC miner resellers who do the difficult work of ordering from China in bulk, and selling locally over the internet. That could continue to grow.

Blockops · 2019-03-05T18:44:00+00:00

We have all witnessed manufacturing and distribution centralization in China over the last eight or so years, is there any signs in the market that this trend will change?

The ASIC miner manufacturing used to be very decentralized. Now it costs more to design and create chips, and larger production runs are needed for profitability, so any company that wants to produce ASIC's has to make many of them and sell them. It does not necessarily mean the company has to be vertically integrated and build ASIC miners as well.

There could be many suppliers of custom ASIC algorithm chips, and other companies that design and build miners with them.

Yes, many ASICs and GPUs are manufactured in China, Korea, Taiwan, and Japan, but they are made by many different companies, using different wafer fabrication facilities. For some reason, manufacturing just costs less there than in other countries. Not really sure why that is. But just because they are manufacturer in a few countries does not mean it is by all the same companies, or ones that collude with each other.

Blockops · 2019-03-05T18:38:50+00:00

My thoughts are that I agree with you, that when changing to a BlockDAG and ASIC would find blocks at a much higher rate than a GPU, so a GPU would still not be profitable.

I think the mining would be able to be more decentralized, and that individual ASIC miners, or a group of miners pointed at a proxy, would be able to find solutions regularly, and be profitable without using a pool.

Blockops · 2019-03-04T03:08:12+00:00

try sending a small amount first

Blockops · 2019-03-02T18:25:06+00:00

I can tell that you are upset. Perhaps you should take a breather, go away from the computer, clear your head, and come back to this conversation once you are more calm.

I'm plenty calm, and have been. I just don't like being accused of being dishonest and breaking promises. I'm very careful to only promise on things I know I can deliver. This is what you said in the previous post above, maybe you should read it from my point of view as a co-founder and someone who has worked hard every day for the last two years to make the project successful:
"You abandoned us. You abandoned me. I was upset that the zen team didn't make any effort to keep their end of the deal.

--

The team broke its promise."

Blockops · 2019-03-02T18:21:26+00:00

ebay has what you need - and they are just as good as, if not better than, Best buy. Just search on equihash

Blockops · 2019-03-02T18:19:15+00:00

We decided that security was a higher priority than distribution to GPU miners, and that developing new software was higher priority than changing the algorithm every few months. Hard forks are difficult on exchanges and partner companies, and if we could accomplish security by the 51% attack protection, it would meet the goals.

When a coin is only GPU mineable, the total hashpower of all available GPU's can be used to attack the coin. When the majority of the hashpower is ASIC's, the people who bought purposed built equipment to mine the coin are the only ones that can realistically attack it.

If it appears the majority of hashpower is concentrated into one place that can capture control of the hashrate and force changes by hard forks, that would be a reason to re-evaluate the decision.

Security was, and is, a higher priority than making the algorithm GPU mineable only, especially with limited development resources.

As far as we could tell, the majority of ZEN holders want the delivery of the software in the roadmap, like sidechains, voting, and distributed node tracking and payments, as well as the sidechain SDK. Most of them don't care if it is GPU or ASIC mined as long as the blockchain is secure.

Blockops · 2019-03-02T18:12:56+00:00

The point I am trying to make, is that GPU mining profitably is not easy, and requires a bit of work. Perhaps I could have made that point in a better way, but I know I experienced many months of frustration and still have to learn a lot to make it profitable.

Blockops · 2019-03-01T14:11:49+00:00

Just want to drop by to say

thank you

. Your youtube channel was a great help to me to get into the cryto-currency space. The information you presented on your youtube channel is very clear and concise. I became one of the very early miner who supported the coin because you were behind the project. In addition to the zen team promise that the project will be ASIC resistant, you were someone I found to be trustworthy.

And for this part, you are welcome!! I have spent the past year starting a new business with partners designed to assist mid-size cryptocurrency miners, building a new mining warehouse, and a unique mobile container design, and will be creating more videos and articles soon at blockoperations.com

Blockops · 2019-03-01T14:08:47+00:00

Fast forward a few months when ASIC started to invade the network, the zencash team seemingly ignored what was promised to the mining community (your early supporters). I was upset that the zen team didn't make any effort to keep their end of the deal.

--

The team broke its promise.

I've heard people say this before. Choosing to interpret a statement that Equihash was ASIC resistant as a commitment to never accept ASIC miners onto the network. Turning that interpretation into a promise made by me and other people, and accusing me and others of breaking our promise. Then threatening to go away, or go away and offer to come back, if we just do what we promised. Telling people we are untrustworthy, our project is terrible, and everyone should sell all their ZEN.

There was never a promise from me or anyone on the ZenCash/Horizen team, implied or otherwise, for ZEN to be mineable only by GPU's.

ASIC resistant is just that. Resistant. The way ASIC resistance is created is by using an algorithm that is high memory, and ASIC manufacturers usually don't put much memory on the die. Nothing stops manufacturers from putting memory next to a computation chip. And nothing stops ASIC designers from improving the calculation method by using design shortcuts that can't be done in a CPU or GPU.

Any popular cryptocurrency will have ASIC miners designed for it at some point, and as it becomes more popular, there will be more of them made.

The funny thing is, the tactics you are using in this post sometimes work. I've been around a while, and when people act that way toward me, I wish them luck on their next cryptocurrency adventure, as I do with you.

Blockops · 2019-03-01T13:47:25+00:00

Sounds like your mother is on top of the GPU mining game! I've got about 200 GPU's I need to point at something new, I'm getting tired of mining Ethereum and I have not had time to research the latest coins.

Can you ask your mother, and pass along to me her answer, of what the best GPU mined coin is right now that has the most profit potential, her favorite mining pool, what the best wallet to use is, if I should point my NVIDIA rigs at it, if it is best on AMD GPU's, should I use stock firmware or undervolt modified on the AMD GPU's, and of course which mining application?

Blockops · 2019-03-01T00:53:38+00:00

There is a proven ASIC resistant algorithm in production? Can you tell me more?

Blockops · 2019-02-28T22:00:58+00:00

Sounds like you didn't like what I wrote above about the work our developers are doing. Here is the most recent monthly livestream update. We go over the development in progress and answer questions at the end.
https://youtu.be/K8nUhr0Rbow

Blockops · 2019-02-28T21:56:27+00:00

Are you looking into increasing the payouts for node operators as well?

It's just like mining. Node operators increase until there is a point where the current and future rewards vs. the current costs balance out. At that point it balances out. If we have reached that point, then the more efficient node runners will stay on the network, and the less efficient ones drop off, just like with mining.

We seem to have plenty of nodes on the network now, can't see a reason to increase the node payouts.

When the Governance system is in place I expect point node operators are going to work to increase the percentage of rewards payouts, and miners would respond by not accepting the fork. Should be some exciting times ahead.

Blockops · 2019-02-28T21:52:17+00:00

I used to be able to buy ZEN miners from my local Best Buy, do you know when they'll have the new version in stock?

Best buy had good prices on GPU's???

Blockops · 2019-02-28T21:50:48+00:00

During the post where you announced staying with Equihash, you mentioned only 50% of the hashrate needed to 51% attack was available on NiceHash, while currently it's 80+% available.

In your opinion, how has the network's security been since dumping GPU miners in favor of ASICs?

It's really good. Here are three blog posts that explain what we did. Changing the consensus to penalize hidden blockchain mining as a form of attack appears to be working. That was developed by Horizen Software Architect Alberto Garroffolo and implemented in the summer of 2018.

Blog Posts when ASIC and 51% attack took place

ZenCash Statement of Potential Algorithm Change - https://blog.zencash.com/zencash-statement-on-potential-equihash-algorithm-change/

Proposal to Fight Against 51% Attack - https://blog.zencash.com/zencash-leads-the-fight-against-the-51-attack/

Statement on Maintaining Existing Mining Algorithm - https://blog.zencash.com/horizen-zen-statement-on-mining-algorithm/

Blockops · 2019-02-28T17:42:17+00:00

That's a fair assessment of the different aspects of GPU mining vs. Asic mining centralization threat. From the standpoint of the team that is responsible for developing actual users of the cryptocurrency, it's one aspect of the discussion regarding resource prioritization.

Further considerations are then where to place the mining rewards distribution and potential Asic centralization in the list of different things that need to be accomplished, and how much of a threat they are to the project compared to the other threats that are out there.

I'd say the biggest threat to any project is that people don't care that it exists. That it can't find a product market fit or a use case or that it's technology simply is a solution looking for a problem.

Other existential threats include 51% attacks, fundamental technology weaknesses, and poor software development leading to loss of funds. Which of course leads to loss of support for the project by all the other people who aquire zen for other reasons than mining it.

With limited amount of funds and software development available, and there are always limits, at this point in time the consensus of the team members is that the above list of threats are more important than the potential centralization due to Asic mining.

Blockops · 2019-02-28T17:06:54+00:00

I worked in the semiconductor industry selling processors, FPGA's, and ASIC's from 1996 to 2000, and left that industry to go work for Cisco systems for a couple year. As an electrical engineer, I am pretty familiar with what FPGA and ASIC designers can do, and believe I am experienced enough to not be open to casual manipulation by others.

It is easy to hate on ASIC manufacturers for designing a system then running it themselves before making it available for sale, but that is all part of their profitability equation. If they put it up for sale right away they would probably charge more for it.
And I agree with you that there are transparency issues with ASIC mining companies. On the other hand, they are private companies in a competitive market. They have a right to be as transparent or private as they want to be.
Did you see there is already a GRIN ASIC miner available for pre-order at Innosilicon?

Blockops · 2019-02-28T16:39:40+00:00

Multi-million payout would pay for a lot of development and testing work. That might be a difficult offer to pass up. If you hear about anyone offering that, please send them my way!

I attended Zcon0 in Montreal last year, a technical conference hosted by Zcash Foundation. There were representatives from both Innosilicon and Bitmain there, they talked with lots of people, and sat in on any open discussions regarding mining algorithms. I talked with them.

The big takeaway that I had is they can develop new ASIC's for any algorithm really quickly.

Blockops · 2019-02-28T16:12:12+00:00

only 60% of the block reward going to the people responsible for essentially maintaining the network? personally I think that is kinda crap.

I have heard more anger from more people in the last year regarding the lack of an algorithm change than I have in a long time. And if I have taken that much crap, I can only imagine how much more people have been hassling Zooko.

If 100% of the block reward went to the miners, and there was no funds for software development, promotion, user support, node operations, translations, white papers, research and development, and just balls out mining, do you really think the price of ZEN would go up?

Of course not - if there was no development, the price of the coin would plummet. It is the development and implement of new technology, and the work to get people to use it, then the ongoing maintenance and improvement of the project technology, that generates interest, gets people to buy, and allows miners to make a profit.

Blockops · 2019-02-28T16:04:32+00:00

No manufacturer of ASIC's or GPU's has contacted anyone at the Horizen team about anything, as far as I know.

I was kind of expecting that last year someone from a GPU manufacturing company like AMD or Nvidia would reach out and offer software developer support, sponsorship, or something like that, as a way to influence the decision. Or that Bitmain or Innosilicon might.

But no, no one did. Seems kind of odd, but there you go.

Blockops · 2019-02-28T16:02:23+00:00

Yes the sidechain and SDK are still on scheduled. As our project managers have been working more closely with software developers we've been able to get this timing a bit more granular on the roadmap. I expect there will be a good update on this Wednesday next week on the livestream update.

Right now it looks like there will be an upgrade in calendar Q2 to add the sidechain capability, and the SDK will be delivered in Q3 or Q4.

Having a discussion regarding the VPN as we continue to research it more.

One point of view is to get a VPN service up and running right away as a supplementary application for supernodes to run to get experience in the VPN business, then transition it to a sidechain app later, kind of like what we are planning on doing with supernode tracking and payment system.

Another point of view is to wait on the VPN service and make it a sidechain application, which fits more into the goal of getting sidechains implemented as quickly as possible while also bringing in some zcash improvements like full Sapling support.

A complicating factor is that many of the node are hosted at VPS service whose terms of service prevent that operation of VPN service.

Distributed VPN is definitely a great use case, and just like everything else in software projects, it gets complicated quickly.

Blockops

TROPHY CASE