I've been researching daily reinvestment to produce compound daily interest vs. accumulating simple interest and ignoring your principal.
I've accounted for GH/s value decline over time and mining difficulty increases and I found something I wasn't expecting.
It looks like if you start out with an average of 0.3% earned per day you actually make (lose) (-59.75%) of your original investment. If you simply chose to accumulate instead of reinvest your earnings (over a 366 day example) you actually make 114.301619216228% of your original investment (even without including your principal!!).
Here's a brief overview of my conclusions:
Starting with a daily payout percentage of 0.3=Daily compounding earns (-59.75%) of what you would earn by simply accumulating your mining payouts.
To earn an equal or greater amount by compounding than you would with accumulation, you need to start with a minimum of 0.7% daily payout percentage.
Questions welcome! This is a puzzle I've been trying to figure out since I first became interested in bitcoin!