Why should miners be mining right now?
Posted: Sun Jul 31, 2011 9:42 pm
I've got a considerable (~100Ghash) pool of servers that I'm currently doing bitcoin mining with. I've been playing with namecoin, and I think it's an awesome idea, but there are a few things holding me back from contributing some horsepower behind mining for it right now.
1) The current difficulty/network hash rate is severely mismatched. I know it will correct itself, but that'll be a few months down the road. The side effect of this is that getting the required 120(or 100 if i really wanted) confirmations to make any mined blocks valid is taking a lot longer than what most miners would like. While it's up lately, it looks like there have been some days that have had only a handful of blocks found. The longer mined blocks take to mature the more "risk" there is in that something is going to wrong in the market during that period, which makes it a harder sell than just doing bit coin mining. Also, knowing that waiting a while will produce much more than jumping in at the moment is giving everyone an incentive to just wait, which is going to extend the current difficulty period even further.
2) Unless I'm misunderstanding something, if the proposed merged mining proposal happens, that's going to make namecoins much more plentiful after that happens, which is most likely going to depress their value further. That's going to make miners want to sell off before that happens, which is going to make values go down well in advance of that happening. (i.e. now)
I don't mean to sound super negative, but this is making it really difficult to talk myself into mining, which I know the project needs right now to get out of this insanely high difficulty period. Can anyone argue any counterpoints to these for me?
1) The current difficulty/network hash rate is severely mismatched. I know it will correct itself, but that'll be a few months down the road. The side effect of this is that getting the required 120(or 100 if i really wanted) confirmations to make any mined blocks valid is taking a lot longer than what most miners would like. While it's up lately, it looks like there have been some days that have had only a handful of blocks found. The longer mined blocks take to mature the more "risk" there is in that something is going to wrong in the market during that period, which makes it a harder sell than just doing bit coin mining. Also, knowing that waiting a while will produce much more than jumping in at the moment is giving everyone an incentive to just wait, which is going to extend the current difficulty period even further.
2) Unless I'm misunderstanding something, if the proposed merged mining proposal happens, that's going to make namecoins much more plentiful after that happens, which is most likely going to depress their value further. That's going to make miners want to sell off before that happens, which is going to make values go down well in advance of that happening. (i.e. now)
I don't mean to sound super negative, but this is making it really difficult to talk myself into mining, which I know the project needs right now to get out of this insanely high difficulty period. Can anyone argue any counterpoints to these for me?