Quote from: altoidmintz on June 25, 2014, 02:22:08 AM

Quote from: Korbman on June 25, 2014, 12:30:06 AM

I don't mean to encroach on the question posed to Puppet, but I can answer this from experience.

Yes, developing and maintaining a mining operation is a exactly like a dog chasing its tail. It's a cycle of finding better hardware to temporarily outpace difficulty...which ultimately increases the difficulty...which leads you back to finding more efficient / large quantities of hardware. It doesn't matter how large or how small the farm is, this same cycle will have an effect on all participants in one capacity or another.

This cycle is so vicious that there will be a period of time when only miners with unlimited, free energy will profit.

Heck, it hasn't even been two years since ASICs have been released and we're already pushing into "4th Generation Chips" territory. The product lifecycle we're working with is insane!

Korb do you think if we re-adjust the div share to be a smaller %, perhaps ~ 10%, it is still to late? Or would we be able to recover with such a strategy in your opinion?

Puppet, feel free to chime in on that as well.

It's hard to say. The goal is to reinvest at the same (or greater) pace as difficulty; if difficulty increases by 10%, then increase your hashrate by 10% or more. Now the question becomes "what does it cost to increase by 10%?"...to which the answer will vary based on access to hardware, cost of that hardware, and payment methods (BTC or Fiat).

Keeping it simple, let's say PETA generates BTC1.0 of revenue during 2016 blocks. If difficulty goes up 10%, it may cost PETA BTC0.5 in hardware purchases to increase their hashrate by the same amount to maintain that revenue stream of BTC1.0. 50% profit, 50% reinvestment.

That's also why I wanted to emphasize my previous point about active communication and voting. The PETA operators have the most comprehensive understanding of their current assets, expenses, and sources for hardware...which should make them the only people who can properly calculate reinvestment rates. If reinvesting 90% of their revenue into new hardware keeps them floating, then by all means do it. But if voters think that 50% is better for the company (when it's not), then you slowly start entering the downward spiral of never being able to catch up to difficulty increases because the funding isn't there.

EDIT:

Quote from: altoidmintz on June 25, 2014, 01:03:06 PM

Now, will someone please answer my question. Puppet sort of answered it, but not really:

Patience. I'm not on all day every day lol

EDIT 2:
I'd also like to point out that Puppet is correct, regardless of what others would like to believe. So long as commercially available hardware isn't able to achieve a positive return on its own (meaning spend BTC1 on hardware, mine back BTC1.1 for example), then no amount of reinvestment will help. Spending 100% of revenue on unprofitable miners won't magically make them profitable.