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> If it's more profitable to mine $ARBITRARY_ALT_COIN than Bitcoin, then people would mine $ARBITRARY_ALT_COIN until the profitability equalized. Thats.... wha
by ringaroundthetx 9y ago
> If it's more profitable to mine $ARBITRARY_ALT_COIN than Bitcoin, then people would mine $ARBITRARY_ALT_COIN until the profitability equalized.
Thats.... what people do.
Market inefficiencies come up predictably because coins have different block reward and emission schedules. They have different algorithms which give advantages to different processors. The market efficiency time sometimes requires a completely new fabrication line created in china, this gives significant times till mining arbitrage goes away.
Similarly, multipool miners have software which automatically switches to different blockchain networks when the yield is favorable.
It is a mistake to think there is no opportunity just because someone told you there are always smarter more observant people profiting off the opportunity.
- LyndsySimon 9y ago> It is a mistake to think there is no opportunity just because someone told you there are always smarter more observant people profiting off the opportunity. I agree - I'm not denying that there are ever opportunities for arbitrage, I'm merely asserting that there isn't going to be an alt out that there is "significantly" more profitable to mine than Bitcoin itself.
- ringaroundthetx 9y agoOkay I would still disagree, my first thought was defining significantly. When 300% more profitable are the typical differences in yield, how is that insignificant? So then I decided the logical rebuttal would be "over time", where the assertion would be that it isn't significantly more profitable over time. The rebuttal to that is that baskets of alt coins outperform bitcoin significantly, again by at least 300% barring the worst luck. And even in a bad year for alts, it is possible to find a difficulty algorithm that you can game giving you an advantage that nobody else notices.