PetaMine backs out of plan to switch to P2Pool, sticks with GHash.io

Shortly after bitcoin-mining megapool GHash.io caused panic across the cryptocurrency community by briefly gaining 51% of the total bitcoin network hashing power, several smaller mining collectives decided it was time to investigate alternatives. Mid-sized, shareholder-owned mining collective PetaMine was one of those groups, deciding in a much-discussed vote to point their miners away from the consistent payouts of GHash to the more unpredictable P2Pool system. At the time, P2Pool was tiny, accounting for less than 1% of the total network hashrate, and PetaMine’s 1.8 PH/s would add a significant boost. The shareholders voted overwhelmingly to switch to P2Pool, with 96% in favor of the move.

Today, however, PetaMine’s management decided to renege on the shareholder vote, opting instead to stick with GHash. That decision is already proving highly controversial.

In an update sent via email and posted to the company’s listing page at Havelock Investments, pool owners Team CryptX declared that the risk of another 51% incident from GHash “has disappeared,” and that the planned move would not be taking place. The accuracy of this assertion is debatable, as GHash currently controls nearly 30% of the hashrate. While the company has publicly committed keeping its pool under 40% of the total, just how much of the network GHash truly controls is impossible to determine.

The PetaMine update also cited issues with BitFury-based mining hardware on the P2Pool system, although a seemingly simple workaround for the issue is already in use by other miners.

The core issue seems to be less about the 51% issue or BitFury compatibility, and more about PetaMine’s payouts. The pool switched to a GH/per day payout system several weeks ago, and mining on the smaller P2Pool system would make payouts considerably more erratic. In effect, PetaMine is backing out of their highly publicized shareholder vote results because it would impact their bottom line.

PetaMine’s share values have been in slight decline since late July, and appear to be falling somewhat more sharply today following the announcement.