Mining: another year, still just as Nasty
Wednesday 28 October 2015
Almost a year ago I talked to Og Nasty, who runs a mining pool with a difference. I figured it was time to catch up again and get his take on where things are at.
Read also: The Nasty business of mining
NastyPool is a zero-fee P2P mining pool that integrates a bonus lottery system and creates a community around it in various different ways – making bitcoin mining something that people do for fun again, as well as money. Og has been doing this for years, since the early days of bitcoin, so he’s a good person to ask about mining..
1) How has the mining landscape changed in the last year - and how does that compare to the changes since you've started?
In the last year we've seen the price of bitcoin fall from $400 to $250 while the difficulty rose from 35 to 60 billion. This has squeezed profitability, as there were no large advancements in mining efficiency in this period. As a result, most home miners with power rates above $0.10/kWh or unfavorable mining environments have ceased their operations. I have witnessed a gravitation towards hosted miners as well as companies like Spondoolies and Bitmain ramping up their in-house mining operations. This marks a bit of a change from the environment we saw during the last time mining profitability was tested back at the end of 2011 and into 2012. Back then, it was individual users discovering bitcoin mining and the following shakeout which led to investment by individuals. This time it appears to be large companies perhaps to follow by investment from institutions.
The last set of physical coins already looked good enough to lick. The next are going to be even better.
2) Has the new generation of ASICs made a difference to you?
Having increased efficiency miners has made a difference. It has ensured continued profitability during an elongated period of declining rewards. This gives stability and confidence, which will lead to growth.
3) What's your opinion on the health of the bitcoin network at the moment?
The Bitcoin network is very strong. The stress tests were widely broadcast and caused minimal disruption during a period when development struggles have attempted to splinter the network in new and exciting ways. Hashrate growth is continuing strong and also appears to be as distributed as I've ever seen it. I think it is safe to say that the strength and resiliency of the Bitcoin network is impressive.
4) Where do you stand on the whole XT/BIP100/1MB debate?
I am not a fan of XT for some very fundamental and moral reasons. I think it is at best an altcoin and did not deserve the publicity it received. I also think the block size should be increased and that BIP100 currently seems to be the best option to do so. I expect there are other proposals being worked on and perhaps one of those will earn more widespread support in the developer community.
5) What do you see of interest coming down the track in the next 1-2 years? Any predictions?
We are entering a make or break phase for bitcoin. Large investments have been made in many sectors and mining profitability has fallen greatly. Without a price increase to push profitability far ahead of the coming rising difficulty as newer faster more efficient equipment comes online, large companies could be looking at huge failed investments. Since the large companies are still in control, and the market is still fairly small considering its reach, I predict we will see a bitcoin price between $800-$4,000 within 1-2 years. I also think we will see increased acceptance of bitcoin by online marketplaces and increased access to investment through new stock market vehicles as COIN is approved and technology funds begin accumulating positions.
6) Any interesting developments for Nasty Mining itself?
NastyMining has continued mining in a no-cost environment, making weekly bitcoin distributions by NastyFans possible. We have recently transitioned to S7 miners and now that we are debt free, we should be able to begin a new period of expansion. We are also currently taking pre-orders for the 3rd coin in our Minted Coin series, which is made from 2oz .999 silver and is being produced in limited quantities with gold highlights. The most important thing however is the support we continue to receive from the community as we create new goods and services as well as build relationships with independent developers looking to help us build on our various offerings. There are still many plans in the works for NastyFans to bring fun and additional revenue to the table. NastyMining will continue mining and creating new products as we have for more than three years now while it is all implemented.
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