To mine or to stake that is the question

in Project HOPE3 months ago

To mine or to stake_ That is the question....png

For a lot of hive-engine community tokens there are two ways to generate new tokens.

The first way is to stake the tokens and curate posts and thereby earn curation rewards. The second way is to buy miners that you can activate and that will make you earn passive income. It is quite difficult to understand how the mining works and it's even more difficult to know what brings the better return.

To mine or not ?

Through some posts of other people, I started to understand how the miners of Hive-Engine tokens work. It is a kind of lottery and every hour 30 miners among all the miners are selected by luck to get a reward.

For each miner that you own, you have a chance to get a payout every hour. The more miners you have, the more chances you have to win. However your chances get smaller, the more miners are in circulation. Let's say you have 1 Miner and there are only 30 miners in circulation. You have a 100% chance to get a payout every hour. However, if there are 60 miners in circulation, your chances diminish by half. Since you can't control the numbers of miners out there, you can only increase your own number of miners to keep your earning potential identical.

The longer a token exists, the more miners are sold and active, the lower are your chances to earn with miners. So mining is especially interesting when a token is new.

To stake or not ?

The second alternative to earn tokens is to stake them and use them to vote on posts that carry the specific tags. Like that you can earn curation rewards. The more tokens you have, the more you will earn in the long term. Staking alone won't give you rewards. In order to generate them, you need to use your voting power for the token in question. If you have only one account and you have to manage your hive voting power and your token relevant voting power, this can become a bit tricky. There are however quite efficient ways to do it. More about that in another post...

So what should I do mine or stake?

Personally I have a preference for staking. The more stake I have, the more I will earn. With mining, my chances to get payouts will diminish over time and if the number of my miners gets insignificant, the miners might end up not paying at all. The money invested in them would then not bring any return. With staking this will not happen as long as I vote on posts with the appropriate tag.

For miners there is a maximal output of 720 payments per day. This is a threshold that can't be surpassed. The more miners are active, the more these payments will be split and the smaller your part of the pie will become. There is no such limitation with staking. There are almost no limits how much you can earn with your stake. That's why I'm a staker :-)

What about you? Do you mine or stake Hive-Engine tokens?

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Well but with great risk come great reward .
If you take a look at recent @themarkymark post about miners , you can see that Brofund miners will turn to profits this year ( read comments ) . It's fun too according to me.

I would say stake 80% and buy some miners too because they are permanent passive income but yes try to buy significant number.

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 3 months ago 

but yes try to buy significant number.

I think this is the key when investing in miners. If you buy just a handfull they will be quite useless. If you are early on the ball, it's probably even better to buy a trunkload of miners. You make a lot in the first months and then you stake what you earned...

Thanks a lot for stopping by!

!ENGAGE 20

Okay :) Thanks for the advice.

Thank you for your engagement on this post, you have recieved ENGAGE tokens.

I bought a few miners before before I realized that it was a “lottery” system, now I stake.

I also seek out other ways to make tokens multiply, SIM City pays tokens, WEED pays you for staking, and now the new Index token gets you dividends too. I think buying tokens as a group, like with INDEX is the way to go if you are buying miners.

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 3 months ago 

I think buying tokens as a group, like with INDEX is the way to go if you are buying miners.

You are quite right about that. Such tokens like INDEX, Bro or dhedge have thanks to the volume of investment much more chances to win in this lottery. As an individual it gets very difficult to compete with that.

Thanks a lot for your comment

!ENGAGE 20

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False dilemma - there is a 3rd option - buy tokens that generate income (such as @mpath) or delegate to income sources, such as my own M token. There are a few others, tho not many, that are not classed as miners.

Like you, I dislike probabilistic miners as the odds really suck for small stakes, hence why mining pools then develop.

 3 months ago 

Thanks a lot for your suggestion. There are indeed some interesting tokens that allow to generate an income in a different way and they can be the solution to generate passive income without having to upvote and curate. Thanks a lot for your comment!

!ENGAGE 20

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I exclusively stake now since I found out miners were lottery based. Live and learn. :)

I have four LEOMM I acquired early on. I will probably sell one to get my initial investment back and the other three will go to the LBI project at a discounted rate to further that endeavor.

Now I just need to figure out what to do with the one STEMM I won from a Dcity science convention. :)

 3 months ago 

I think that it only makes sense to do mining when you really have a big quantity of miners. Otherwise the chances to get payouts are very slim. The good thing is that you can sell these miners quite easily on the market.

Thanks for your comment!

!ENGAGE 20

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Greetings friend @achim03

Answering, in part, your questions; what about you? mines or betting chips for the beehive? in this regard I tell you that when STEEM recently launched Steem-Engine, and later created the communities, I decided to make the purchase of miners SPACO, and it really was one of my worst decisions, because we were literally swindled, so, I have my reservations these issues really would not encourage me.

 3 months ago 

Whith all the new tokens that are created, I often prefer simply to wait and see how things evolve. I might use their tag im my posts and generate some income like that. Then I would start to stake it and only if the project is satisfactory would I start to buy tokens or miners. Thanks a lot for your comment!

!ENGAGE 20

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I had not considered the difference between the two. I have some miners and I also stake the tokens I receive, so there is currently income from both sources. However, I had not considered that the miner income would decrease over time as opposed the the staking income increasing. Thank you for bringing this important contrast to the forefront.

I also like the point about the "index" type tokens. I have recently begun investing in those types of tokens and like the fact that they will continue to pay out dividends passively. I will continue to invest in these types of tokens, as well.

 3 months ago 

The big advantage of tokens like index is that they combine income from staking and mining and because of the size the mining will become significant. With a handfull of miners, over time the probability to reach a payout will more or less be close to zero.

Thanks a lot for your comment!

!ENGAGE 20

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So what should I do mine or stake?

It depends upon your activity in blockchain. Mining is purely passive. Even you do automatic curation , you need to chech if author is not posting crap.

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 3 months ago 

I think that it really depends on us. Some people enjoy curating other really just want their money to work passively. I've seen that a lot of people like to do both. Thanks for your comment!

!ENGAGE 20

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 3 months ago 

Thanks for stopping by!

!ENGAGE 10

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 3 months ago 

Thanks for the comment !

!ENGAGE 10

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 3 months ago 

@tipu curate 4

 3 months ago 

Thanks a lot for the tipu tip :-)

good article, whit the passage of time mining is more profitable