03-24-2012, 08:28 PM
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This is one real problem with substrates that are large sized (like pebbles, small rocks). Food falls down and fungus appears. Fish can't get down to eat it, and bacteria can't get going on it in time. In a substrate of fine gravel or sand, the bacteria quickly work to break down any food and fungus is avoided.
To my knowledge, the fungus that usually grows on uneaten fish food is not particularly harmful, but it is a sign that all is not well down there [i.e., unhealthy at best], so I would remove it whenever you see it, but more importantly, consider changing the type of substrate.
We have another thread on this subject, wherein I mention options such as a base substrate of fine gravel or even pea gravel with scattered pebbles on top, for an authentic stream habitat. This would eliminate the fungus issue.