Mining on a “normal” pool
means that the miner will exactly mine that one coin (and nothing else).
on the other hand will switch between different coins, depending on their profitability. In practice the algorithm will check the coin difficulty and the market prices to determine the most profitable coin. Then all miners are redirected accordingly.
- First generation multipools were directly paying the different coins and it was up to the user to exchange them to Bitcoin.
- Second generation multipools act like first generation pools, but automatically trade the various coins for Bitcoin.
- Third generation multipools are highly optimized second generation multipools, that mine the most profitable portfolio of altcoins (instead of the most profitable coin). This requires deep knowledge about the mining process, switching costs and makes use of advanced portfolio theory (also with respect to correlation patterns among different coins).
In simple terms: if coin X is the “most profitable one”, then adding more and more hashpower to it, will make it less and less profitable (i.e., the marginal utility of mining the coin declines). In order to achieve the best possible result, it is necessary to use modern portfolio theory (and various optimization techniques) to mine the most profitable portfolio of coins
Furthermore, our platform uses an advanced trading engines that allows to trade the mined coins efficiently to any target currency (like Bitcoin). There is a lot of work and brain capacity going into the algorithmic trading engine to make it the best of its class.
The following slide gives a good overview:
In step (a) the client’s mining hashpower is distributed by the control unit (CU) to various altcoins by using advanced portfolio optimization techniques to mine most profitable portfolio of altcoins
at any time!.
After the coins have been mined the Genesis Mining Trading Engine (b) exchanges the altcoins to bitcoin for the best possible prices.
In this way you can sit back, relax and earn Bitcoin while the algorithms are doing all the number crunching to maximize your profit! Have fun!