Sorry you have some misconceptions about the effect of mining at different difficulty so let me clear them up once and for all: It makes no difference to these devices what difficulty you mine at in either hashrate, hardware error rate, or reject rate.
If those random hardware errors cause the entire work unit to fail, then it's best to keep their effect to as small a portion of work as possible.
Let's pretend that work diff of 64 takes about 10 mins, on average, to produce an accepted result. If you have a single hardware error in that 10 minutes, you wasted the entire 10 minutes. If you had broken it up into 8 units of 8 diff work, you would have only lost ONE of those work packets. Instead of losing all 64, you get 7 of the 8, or 56. 56 is better than 0, yes?
And if you're churning away at solving a work unit diff 16, and only make it to halfway (
before a block is found by someone else....you wasted the progress you did have (8 -- which is 'halfway').I was basing it off of what I was witnessing with my fury in bfgminer 3.5.1. 3.2.0 doesn't report the errors. Neither does your cgminer.
No matter what your difficulty, most hardware will return nonces at a difficulty of 1 (or less) and is up to the mining software to not bother submitting anything less than the requested difficulty of the pool. The value paid out will assume you're working and finding these lower target nonces at rate based on probability and credit you accordingly when you submit the higher threshold one. Yes, if the hardware malfunctions during the one time it should have found that higher difficulty, you're probably out the work of that longer time-frame, but not every failure is going to be that one particular effort and guarantee wasting that time. Yes, you're likely to lose out a bit from this, but it's not as drastic as you're thinking.