Comment by Klathmon | Hacker News Reader

Comment by Klathmon | Hacker News Reader

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That's the nice part of NiceHash though, you never even own the alts in any way.

You as a "seller" get paid in bitcoin per mhash/s (or whatever the unit is for that algorithm). so if you are hashing "DaggerHashimoto" at 26Mhash/s for 24 hours, you are getting paid x btc per mhash/s

The "buyers" are basically then paying NiceHash to say "I want x ghash/s of this algorithm and I want it going toward this mining pool and I'll pay you X bitcoin for it." So then NiceHash plays the part of the broker and matches that X bitcoin payment up with as many miners as is needed to reach the threshold of ghash/s and takes a little off the top as a fee.

It's not perfect, you may end up taking a sub-optimal algorithm and making less than you could have if you did it perfectly, but it works well enough that I make profit in bitcoin.

Nicehash is slightly more stable but you end up in a similar situation since the price per Mhash fluctuates in the same way. If you examine the profitability chart it's all based on historical prices:

https://www.nicehash.com/?p=calc

That's usually fine for the bigger, more established alts (since the known alts use the known algos - DaggerHashimoto, Equihash etc), but not for the alts which can potentially generate the most profit in shorter periods of time. So if a coin that uses some obscure algo gets pumped for a few days it's going to skew the chart.

The real benefit of Nicehash is that it's more accessible for people who are new to crypto mining. If you work out the numbers, mining ETH (for example) directly is almost always more profitable than using Nicehash. Nicehash is just simpler and more convenient.

Well of course mining the coin itself will be more "profitable", NiceHash is charging about a 4% fee (closer to ~2.6% if you play their game). So on average mining ETH directly will most likely net you 4% more.

But I don't want ETH, I want BTC. And while it's not a knock against ETH (It seems like a really cool technology!), I just don't want to hold my money in it and deal with it separately than I do my BTC. And I'm more than willing to pay that 4% fee to be able to hold my BTC securely with the ecosystem I have setup to sell and convert it to USD if/when I need to.

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