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Introduction to Middlecoin: A New Mining Pool

Introduction

Middlecoin is a relatively new mining pool that you may or may not already be aware of. It is pretty different than most in that it is designed to maximize revenue by allowing you to mine multiple different coins, depending on what is the most profitable at the time. This pool goes a step further in this, though, which is the automatic conversion of those coins as well. Once the coins are converted (to Bitcoins) they are credited to your account and are paid daily. It is hard to argue that this system is not a unique idea and that it has its benefits, but there have been a lot of concerns as to what it is going to cause to happen to various alt coins and their values. Through this article I want to look at just that, in an attempt to help clarify some misconceptions and help better understand why it is not such a bad thing.

Difficulty Swings in Alt Coins

We have been dealing with difficulty swings for quite a while. There are only a couple of coins that do not go through these as frequently, of which one of them is Litecoins. Through the days and weeks, the difficulty of Litecoins has remained relatively stable, allowing you to pretty much always know how many you are going to be able to mine per day on your respective hash rate. Most other coins, however, do not have this privilege. Instead, they are constantly fluctuating up and down at sometimes very high rates.

If you are not already familiar with why these difficulty rates are spiking up and down constantly, it is because of sites like Coinchoose and Coinwarz that allow you to easily see what is the most profitable (based on the coin values in comparison to their block rewards and difficulties). This allows users to easily see what they should be mining at any time for the maximum value when converted to Bitcoins. Of course, this has been going on for quite a while as well, and it can be seen constantly by just watching the charts. As a new coin jumps to the top of the profitability spectrum, miners start swapping off the previous most profitable on to the new one, lowering the difficulty of the old one and boosting the difficulty of the new one. This also swaps their profitability out, after which the miners hop off to the next coin. This goes on constantly, and while it can be done manually, there are also scripts that will do it automatically (and even some pools that do it, such as Middlecoin and Multipool).

The Problem With Profitability Calculators

As we just talked about, difficulty levels on different alt coins often have somewhat large swings. A massive part of this is due to the profitability calculators, and is often seen as being a bad thing. For example, if you are a major supporter of a coin and are mining it because you believe in its fundamentals, you will end up with less holdings because others will jump on when it is valuable, boosting the difficulty considerably. In cases like this, you would actually earn more of your desired coin by simply mining the most profitable with the rest of the herd and then using those coins to buy the one you want to support. For example, you can mine what is most profitable and then turn those in to Bitcoins to trade in for Feathercoins, if that is what you want to hold on to.

In effect, by being a strong supporter of a certain coin you are actually hurting yourself. And by not being a supporter, you are hurting the coin. It is really a catch-22 situation where there is no real way to win, due to the way the system works. Instead, you are forced to make a decision: do you want to support a specific coin and earn less or do you want to earn more by not mining that coin exclusively?

The Value Spikes

Along with the difficulty spikes of different alt coins, we also experience a lot of value spikes. Since most people that are going for the most profitable ones are doing it in order to earn as much money as possible, they are dumping the coins as they get them. This in turn lowers the value of those coins, and then as soon as people move on to the next coin the values start to go back up (as those that stay with them are the same people that would normally be holding). As a result of this situation, the prices go in a roller coaster fashion, in the same direction of the difficulty (at least usually): as the difficulty increases the prices increase and as the difficulty decreases the prices decrease.

I would not classify any of this as being good or bad though. If anything, it is great for those who are good at speculation, and it also benefits those that are wanting to make quick cash. On the other hand, it also keeps coins from having a steady value. As such, it is really half and half.

Middlecoin's Effect On the Economy

Honestly, after evaluating everything related to Middlecoin and how it works, I do not think its effect is as bad as people think it is. At the end of the day, there is really no difference between manually switching coins, using automatic scripts to do it and using a pool to do it for you. The only real change there is here is that coins are automatically sent off to the exchanges, but that could be done anyways. At the end of the day it is all really pretty equal. If anything, the effects this service have (in terms of negative ones) is very limited. All it is doing is bringing about an easier method to handle what people have been doing for months already.

Why Use Middlecoin?

If you have not already started using Middlecoin, it is a great idea to do so, or at least look in to it. The pool keeps up with the top coins and has its own methods for calculating profitability and changes as it needs to in order to keep pushing out the most valuable coins. As it does this, it converts them in to Bitcoins automatically and then credits them to your account. As long as you have a balance of at least 0.01 Bitcoins, you will get a payment at the end of the day.

The service does come with a fee, although it is arguably small for what it offers, estimated at about 4%. While this may seem pretty high at first, it is not too bad when you think about all the automation that is in place and how much more effectively the system is at managing things than you would be doing it all on your own. Along with this, the fee also takes care of all of the trading fees and withdrawal fees from the exchanges, so you are not paying anything else on top of that 4%.

Middlecoin is also a great service for people that are interested in anonymity, as there are no accounts to create. All you do is use your payout address (Bitcoin) as your user name and you will get your payouts there! You can then switch at any time as well, simply by using a different pay out address when you load up your miner. This makes it very simple to get started and make any changes you wish.

Conclusion

Middlecoin brings about a nice new concept to mining in a pool. It allows you to maximize your earnings by taking part in alt coin mining, while still getting paid out in Bitcoins. This cuts out a lot of work in that you do not need to keep up with what is the most profitable or change your miners, and it also cuts out the work of having to keep sending coins to exchanges, swap them over and then withdraw them for use. This puts Middlecoin at a huge advantage as far as mining pools go, and with their relatively low fee of just 4%, it is a no brainer that anyone who wants to earn can benefit from the service! If you are wanting to maximize your mining income, give the site a chance. Just be sure you give it a couple days of mining to get more accurate results, as you are dealing with more than just block confirmations, and some trades will take longer than others. In any case, it does not hurt to give the service a try and see how it works for you. If you end up not liking it, you can return to how you were mining already!

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