Mining acts as a critical factor in blockchain security. Participants protect their cryptocurrencies by calculating hashes with unique properties. In this case, there is no need for a central governing body.
Bitcoin was launched in 2009. Back then, every computer and Internet user could take part in calculating the hash of a subsequent block. The user did not need to have specialized equipment to add a new block to the blockchain. Every computer that had the ability to calculate the largest number of hashes had the ability to find more blocks. To increase competitiveness, miners began to build up their computing power.
What is a cryptocurrency mining pool
It is important to have powerful equipment for mining, but just having it alone will not do all the work for the miner. It is possible to have several powerful computers, but only have a one in a million chance. Even with a huge investment in electricity and equipment does not give a 100% chance to mine a block.
If a miner wants to earn a stable income, he must join a pool for mining cryptocurrencies. For example, there are ten miners, each with 0.1% of the network power. In this case, the probability of getting a block is 1 in 1000. The projected yield is 144 blocks per day, which means that each miner will mine 1 block per week. This income from mining often does not cover the cost of electricity and equipment. In that case, it is better to combine your forces. 10 miners will have a 1% hash rate on the network. For every 100 blocks the miners will mine 1 block, that is 2 blocks per day. Then the profit from each block will be shared between all the miners who participate in the pool. Today, cryptocurrency mining pools have become very popular because they allow all its participants to receive a stable income. We recommend one of the most reliable pools https://trustpool.cc/.
More often than not, a pool appoints a coordinator who is responsible for organizing the work of the miners. The coordinator has to make sure that miners do not waste power mining the same blocks. The coordinator is also responsible for distributing profits among the pool members. There are many schemes that allow you to calculate the profit of each of the pool participants.
How is mining in a pool better than mining alone?
Today, only new cryptocurrencies and cryptocurrencies with low income can be mined alone. Such cryptocurrencies have not yet reached high network complexity. If you take well-known cryptocurrencies such as bitcoin, it is almost impossible to mine a block by yourself. A single miner with a solid farm will have to spend about 200 days to mine one block of bitcoin with a 95% probability. For that he will get 12.5 bitcoins. At the current exchange rate, it's a great way to make money, but it would require investing about $200,000 to assemble a mining farm, not to mention the electricity costs. A stable cryptocurrency mining will require 10-100 times the hash rate. Therefore, it makes sense for users with low hash rates to pool together to finish the cryptocurrency with a common effort.
Bounty distribution methods
Today, mining pools use several methods to distribute rewards between members. The most commonly used methods are as follows:
In the PPS method, miners are paid for each valid ball, each of which is worth a certain amount of bitcoin. The cost is calculated based on the likely number of balls the pool needs. For example, if the pool needs 1000 valid orbs to find one block, then each orb will cost 0.0125 bitcoins. As the difficulty changes, the cost of the orbs changes. Miners will always be rewarded whether the pool finds a block or not.
With the FPPS method, the pool pays remuneration to miners when a block is found. When the pool finds a block, the reward is automatically distributed among the participants. In addition, the pool pays the miners a commission from the transaction. Remuneration is accrued on each transaction that is executed on the blockchain.
With the PPLNS method, miners are only paid a commission when the pool finds a block, after which it "goes back in time" to verify the winning blocks sent in. This effect is called a time window. Miners are rewarded for valid balls sent in this time window.
Criteria for selecting a pool for mining
Most miners choose to work through a pool. Working independently is becoming less and less profitable every day. Farms, simply, do not pay for themselves, not to mention the profit. You need to choose a pool responsibly and take into account certain criteria.
Evaluating the power of the pool
Users need to pay attention to pools that have 200 or more miners involved, with a frequency of block mining at least once a day. If you join a community that has just started, you may be faced with a lack of high results. A low number of miners will lead to a lack of necessary capacity, hence low profits.
Evaluating the capacity of the equipment
A miner must rely not only on the high performance of the pool, but also on his or her own capacity. While mining, the user will have to adhere to a certain schedule, when he cannot turn off his computer. If this schedule is violated, he can be excluded from the system.
Ratio of Hashrate to Coin Complexity
To calculate the ratio of hashrate to coin complexity (e.g. dbx), you need to use a calculator. For example, the computational power of an information currency is 3 Ph, and the total hashrate of the pool is 15 Th. We need to bring these values to a computational unit - 3000Ph/15Ph=200 seconds. That is, it takes 200 seconds for the pool to collect one block of information currency. When choosing a pool for mining, choose services that allow you to collect blocks in a shorter period of time.
Ping to a pool
Ping refers to the delay in the exchange of information between the server and the equipment. The exchange of each block entails sending a new job with a new target. The later the system receives this request, the longer it will take to calculate the block. You should choose a pool whose server is closest to you. This will reduce the downtime.
Minimum withdrawal amount
If the miner has not decided on a particular algorithm to work with, it is best to choose a pool for mining, where the minimum withdrawal amount is reached in a couple of days. In that case, he will be able to try the work on several pools, withdraw the money and choose the most suitable option.
Feedback from miners
Often the user evaluates the work of the pool for mining by the reviews of other users. It is best to choose a service that has at least 90% positive feedback. It is impossible to find a resource with a perfect reputation, so you need to compare the number of negative and positive reviews and choose the right pool. To increase the objectivity of the choice, it is best to use several sources of information.