Mining pool
Mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to solving a block. A “share” is awarded to members of the mining pool who present a valid proof-of-work that their miner solved. Mining in pools began when the difficulty for mining increased to the point where it could take years for slower miners to generate a block. The solution to this problem was for miners to pool their resources so they could generate blocks more quickly and therefore receive a portion of the block reward on a consistent basis, rather than randomly once every few years.
Contents
Mining pool review
Mining pools may contain hundreds or thousands of miners using specialized protocols. In all these schemes B stands for a block reward minus pool fee and p is a probability of finding a block in a share attempt (p = 1/D, where D is current block difficulty). A pool can support “variable share difficulty” feature, which means that a miner can select the share target (the lower bound of share difficulty) on his own and change p accordingly.
The list of pools for mining is extensive – in the world there are more than a thousand. The vast majority of users work through bitcoin pools. The level of complexity of the production of this currency is so high that alone, even with a supercomputer profit is not obtained. Therefore, all new pools are formed. There are other cryptocurrencies, younger than bitcoin, which are faster and easier to mine. But they do not have real value in the network, and they can only earn with the hope that in the future their rate will grow, and this is more like speculative mining.
The Pay-per-Share (PPS) approach offers an instant, guaranteed payout for each share that is solved by a miner. Miners are paid out from the pool’s existing balance and can withdraw their payout immediately. This model allows for the least possible variance in payment for miners while also transferring much of the risk to the pool’s operator.
Each share costs exactly the expected value of each hash attempt R = B * p.
Proportional
Miners earn shares until the pool finds a block (the end of the mining round). After that each user gets reward R = B * n/N, where n is amount of his own shares, and N is amount of all shares in this round. In other words, all shares are equal, but its cost is calculated only in the end of a round.
Bitcoin mining pool
Bitcoin Pooled mining (BPM), also known as “slush’s system”, due to its first use on a pool called “slush’s pool’, uses a system where older shares from the beginning of a block round are given less weight than more recent shares. This reduces the ability to cheat the mining pool system by switching pools during a round, to maximise profit.
PPLNS method is similar to Proportional, but the miner’s reward is calculated on a basis of N last shares, instead of all shares for the last round. Therefore, if the round was short enough all miners get more profit, and vice versa.
Geometric method
GM was invented by Meni Rosenfeld. It is based on the same “score” idea, as Slush’s method: the score granted for every new share, relatively to already existing score and the score of future shares, is always the same, thus there is no advantage to mining early or late in the round.
The method goes as follows:
- Choose parameters
fandc(fixed and variable fee). - At the start of every round, set
s = 1. For every workerk, letS_kbe the worker’s score for this round, and setS_k = 0. - Set
r=1-p+ p/c, wherep = 1/D. If the difficulty changes during the round,rneeds to be updated. - When worker
ksubmits a share, setS_k = S_k + spB, and thens = sr. - If the share is a valid block, end the round. For every worker
kpay(1-f)(r-1)S_k/sp
Double Geometric method
Generalized version of Geometric and PPLNS methods. Using this method, because the “most profitable” coins are being mined and then sold for the intended coin, you generally receive more coins in the intended currency than you would by mining that currency alone. This method also increases demand on the intended coin, which has the side effect of increasing or stabilizing the value of the intended coin.
The best Bitcoin mining pool
It is difficult to say which pool is the best for mining, as everybody needs different options. Take a look in the list of mining pools and decide, which one you need there: Mining Pools List.
Which mining pool to choose?
Before you make your choice, compare your favorite pools in some ways:
- power pool — new pools, still do not get the necessary power will not be able to offer you decent profits, define for yourself the best options, review ratings analysts find the statistics of figures pools, such as here BTC.com or here Blockchain.info.
- evaluate your own equipment – you may need to raise the performance of the graphics card, and then mining will not be so profitable. If you mine with the old equipment, the profit will not be worth even the cost of electricity,
- the method of profit sharing – most often the income from solving blocks is divided in proportion to the contribution of the participants, if you can not make a significant contribution, then the distribution will be equally profitable,
- payments — find out if there’s a way to bring nomineee on the card or e-wallet, as well as interest service fee.
Earning through mining can not be called a reliable income, but for many it has become a convenient way of passive cash inflow. Mining pool overview is of course incomplete and it is not possible to cover all services. The best of them the user will determine himself, based on their capabilities and objectives.