Below is a overview of CLAM coins and how a CLAM coin mining pool works. For my latest posts about CLAM coins, click here.
What are Blockchains?
Cryptocurrencies like CLAM coins run on blockchains which can be described as encrypted ledgers used to verify information. To maintain the integrity of many blockchains, their data is often encrypted, which allows users to remain anonymous and helps blockchains become peer-to-peer and distributed. Bitcoin created the first well-known blockchain. The rewards provided to users that encourage them to contribute to updating blockchains is often called “mining”.
There are two main ways blockchains are mined, by “proof of work” and by “proof of stake”. Bitcoin uses a proof of work mining method where rewards for contributing to updating the bitcoin blockchain are assigned based on the computing power contributed to this task. Alternatively, the CLAM coin blockchain uses a proof of stake mining method where rewards are based on each miner’s share of the total CLAM coins being mined.
CLAM Coin Mining
The CLAM coin blockchain creates 1 new CLAM coin per minute. CLAM coin miners run a computer program that contributes to updating the CLAM coin blockchain and their chances of winning the next CLAM coin each minute is proportionate to their share of the total CLAM coins being mined. For example, if there are 100 clam coins in existence, and you are running the CLAM coin mining client with 10 CLAM coins, then you will have a 10% chance to win each new CLAM being generated every minute.
At the time of writing, there is an active supply of 3,494,887 CLAMs, so by owning 1,000 coins are staking them to mine, your chances of winning a new CLAM coin each minute will be 10,000 / 3,494,887 = 0.2861%. Since there are 525,000 minutes in a year, by staking 10,000 CLAMs, you can expect to mine about 1,504 CLAM coins per year. We can also calculate a basic annualized “mining yield” by dividing the minutes in a year by the active supply 525,000 / 3,494,887 = 15.03%
Actual Results Mining CLAM coins
If you have some skills as a developer, you can quickly get your own CLAM coin miner running 24/7. Click here to view a github jist that describes the process of getting a miner running on a linux server, or click here to go to a CLAM coin website with links to other resources.
To run the CLAM coin client without any programming required, check out this website.
CLAM coins are an open source software with code repositories held on Github. Click here to view the CLAM coin blockchain source code.
One of the curiosities of CLAM coins is how profitable it is to mine. At first blush it might seem that since the supply of CLAM coins grows by one new CLAM each minute, and if demand remains constant, then the value of CLAM coins were go down over time relative to the increase in supply. The cost of running the computers that update the CLAM coin blockchain is a cost for each miner to bear and no economic value will be created. Oddly, I have found that my “realized” yield from my CLAM coin miner is higher than its “expected” yield. In other words, the number of CLAMs that I’m actually mining is always much higher than what I would expect arithmetically.
Based on the fact that one new CLAM coin is created each minute, and since we know how many minutes are in a year and also what the active supply of CLAMs are, we would expect our “realized” yield to be approximate to our “expected” yield, but in fact, my realized CLAM mining yield is consistently higher than what I expect. I suspect the reason for this is some CLAM coins which are counted in the active supply are in fact what I call “dormant”. These dormant CLAM coins are not mining, but are still counted in the active supply, and so the realized mining yield is higher because the actual CLAM coins being mined are less than the active supply. Some CLAM coins are counted in the active supply, but are nevertheless not being staked to mine.
You might wonder why anyone would not stake their CLAMs? I can come up with a few reasons why. Some people simply loose their passwords/private keys. So they then loose access to their own CLAMS. One of the dangers of cryptocurrencies is they put the onus on the users in order to remove middlemen. Other users might still have access to their CLAMs (i.e. they still have their passwords) but they are not currently mining them. This is the case when the server/computer running the CLAM coin mining client is not currently running. A friend of mine once told me about how he installed the CLAM coin mining client on his laptop, and then each time he would drive home or go to sleep and his laptop was shut down, he was no longer mining his CLAM coins. Seems like a silly thing to do, but some people are silly.
The result of other users being silly or careless or “stupid” is some of the active supply of CLAM coins is not always being used to mine, and the resulting difference goes to those who are. Personally, I run the CLAM coin mining client on a server that is active 24/7 with very little downtime. Therefore I capture all of my proportionate chance to win each new CLAM, and at the same time capture a proportionate chance to win the CLAMs of those who do not have 100% uptime on their miners. The result is my miner captures my own expected mining yield, and also my proportionate chance of those who do not, and the difference between the two is my alpha.
CLAM coin Mining Pool
With this in mind, some of my friends asked to join my CLAM coin mining, so I created a program to keep track of our relative shares. The pool accomplishes a few things. Since a group of friends are pooling their CLAM coins and sharing the rewards, we can spread our risk over a larger base, and therefore smooth out our rate of return.
By mining our CLAMs in a pool, we can also help each other. Those who don’t have the technical skills to mine their own CLAMs can piggyback on those who do, in exchange pay a fee. The mining program currently rakes 10% of the CLAMs that are mined as the fee.
We have also built in an affiliate system so that friends can invite others to join our pool and receive 50% of the fees we collect. In this sense, everyone can profit from CLAM coin mining, even if they don’t have any money to invest of their own.