Why I no longer recommend Nicehash for CPU mining

TL;DR: Nicehash might still be a great service for GPU mining, but availability problems and high minimum payouts now make it impractical for CPU mining.

For the first time since 2015, then, I would not recommend getting started with Nicehash if you have a typical consumer grade home computer. For anyone to whom I made that recommendation in the past, I now withdraw it. In my opinion, Nicehash is no longer a viable application for casual home use.

Phase I

I started playing around with cryptocurrency in early/mid 2015. At the time, I gave myself three constraints:

1. I didn't want to risk any real world money, so avenues pursued had to be low/no cost.
2. I wanted to focus on bitcoin (I barely even know of altcoins at the time)
3. Because I could only work on it during nights and week-ends, I would prioritize convenience and ease of use over profitability.

At the time, I recognized that I could not mine enough to compensate for the electricity that I would burn, but I was ok with that for two reasons. First, I was already running my computers at full throttle solving problems for the WorldCommunityGrid. Therefore, my marginal electricity cost was zero. WorldCommunityGrid lost out when I started mining, but I didn't. And second, I expected the value of bitcoin to go up (it was around $231 at the time.)

One of my first guesses to get started was to search the Internet for Windows bitcoin miners, by which I found the Bitcoin Miner program in the Windows store. I downloaded a wallet and let-er-rip. It was ok, but I was unsatisfied because it would only run in the foreground, and because it suffered from usability problems, so I kept searching. From this app, I learned about mining pools. At the time, I actually thought that it was mining bitcoin. It was only later that I learned that it was (allegedly) doing scrypt mining and exchanging for bitcoin to pay me.

Phase II

Because of my dissatisfaction with the interface, I purchased a couple low-end mining appliances from eBay, and kept searching for better alternatives by manually configuring cgminer for scrypt mining with a bunch of different pools, until I eventually landed on Nicehash. At the time, Nicehash offered a simple to use interface that let me use my existing computers to mine for the most profitable of 3 or more different altcoins, and it paid out in bitcoin. I was able to mine with the window minimized, and it had far better payout rates than the Bitcoin Miner program from the Windows store (or anything else that I tried). So, I settled on that, probably around early 2016, I guess.

In that time period, one of my mining appliances got broken when our German Shepherd Dog stepped on it, another one eventually failed, and Bitcoin's difficulty level eventually outpaced the third, so it was back to just mining with my existing home computers. I decided that since I'm not going "all in" on mining, I'm not spending money on specialized hardware for it again.

Phase III

Shortly after that is when I discovered Steemit, so I kept the nicehash miner running and focused my attention on learning ways to harvest other cryptocurrencies in parallel. Along the way, I also mined Steem, Gridcoin, and Storj using the same computers, and also coded up a voting bot that is used by my wife (@lisa.palmer), my son (@cmp2020), and myself to try to support quality steemit authors while also harvesting some Steem Power. For quite some time, Nicehash continued to be a low-friction, steady source of small amounts of bitcoin. At that point, I was so happy with Nicehash that I was recommending it to everyone, and I even wrote How to Easily Convert Your CPU and GPU into STEEM POWER: for the non-technical user, which explained how to run Nicehash and automatically send the earnings to Steem Power.

Phase IV

Starting around the end of last year, Nicehash started responding to high bitcoin transaction fees by repeatedly raising their minimum payout thresholds, and starting sometime this year, they started reducing the algorithm choices that were available for CPU mining. They also started suffering from repeated availability problems. This was a minor annoyance during the first part of the year, but for the latter part of the year, the two have combined to make Nicehash CPU mining totally impractical. At this point, with 3 computers running the Nicehash executable, my last payout was in July, and I have been stuck at just below 0.009 BTC (90% of their 0.01 payout threshold) for nearly a month.

In October, when I noticed that mining had slowed down beyond the point where it could be considered a transient inconvenience, I downloaded the Windows 10 Bitcoin Miner program from GroupFabric that I had previously abandoned, and started running both programs at the same time and priority on the same three computers. I've been recording numbers twice a day since 10/19 and here is what I have observed:

GroupFabric's Bitcoin Miner has earned 0.00025482 BTC while Nicehash has earned 0.00024964. GroupFabric has paid out twice, with a third scheduled for tomorrow, and Nicehash has no payout in sight.

Summary

In short, when it's actually connecting to pools, Nicehash is still paying out far more than Bitcoin Miner, but with the Nicehash availability disruptions, I have no confidence that it will ever pay enough to actually get past the 0.01 minimum payout threshold. On the other hand, Bitcoin Miner's minimum payout is once per week at 0.00005000 BTC, so I'm not at risk of never receiving my earnings.

For the record, I'm not happy with Bitcoin Miner either. It has low payouts, cannot run when minimized and is otherwise "clunky." In fact, I'm not totally convinced that it's mining at all. I suspect that it may just be paying in BTC to have a place to display ads. I have no way of knowing, but it seems that it may just be a faucet that calls itself a miner. I have tried adjusting numbers of CPUS, process affinity, and priority, yet under all circumstances, all 3 computers seem to pay out at roughly the same rate.

Still, for all its issues, in my opinion Bitcoin Miner is still a better option for CPU "mining" than Nicehash at the moment for the simple reason that I'm starting to be concerned that I'm never going to see that 0.009 BTC ($70) or anything else that I eventually mine through Nicehash. I haven't decided if it's time for me to stop throwing good electricity after bad with Nicehash, but that time is certainly getting close.

For the first time since 2015, then, I would not recommend getting started with Nicehash if you have a typical consumer grade home computer. For anyone to whom I made that recommendation in the past, I now withdraw it. In my opinion, Nicehash is no longer a viable application for casual home use.

As a general rule, I up-vote comments that demonstrate "proof of reading".

Thank you for your time and attention.

Steve Palmer is an IT professional with three decades of professional experience in data communications and information systems. He holds a bachelor's degree in mathematics, a master's degree in computer science, and a master's degree in information systems and technology management. He has been awarded 3 US patents.

Steve is a co-founder of the Steemit's Best Classical Music Facebook page, and the @classical-music steemit curation account.

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