What are Mining Pools?
In cryptocurrency, a mining pool is a group of cooperating miners, who share their processing power over a network, they split the reward equally, according to the amount of work their contributed mining hash power.
Although mining pools are desirable to the average miner seeing that they smooth out rewards and make them more predictable, they however and very unfortunately concentrate power to the mining pool’s owner.
Miners can however choose to redirect their hashing power to a different mining pool at anytime.
Before now, mining in pools presented a huge difficulty. It increased to the point where it could literally take centuries for slower miners to generate a block. The way out of this problem was for miners to pool their resources together so they could generate blocks more quickly and therefore receive a portion of the block reward on a more consistent basis, rather than randomly once every few years.
Now with that said, let’s see how we can choose a good mining pool.
How to choose a pool:
There are a lot of things to check out before you join a mining pool. And these are some of them:
- The algorithm. The first thing you should check of before joining a mining pool is the algorithm of that pool. If you mine a coin in a pool that doesn’t support the matching code structure, you would be wasting time and money.
- The reward system is one of the main characteristics of a mining pool. A reward system can really tilt the scales of your choice. But first, there are several different ways of calculating the rewards structure and deciding how to divide it between all the miners. Each miner in the pool, where a new block is found, will get a piece of the cake. The size of that piece will be based on their individually contributed hashing power. I guess at this point I can say it is not that simple.
- Another criteria for choosing a mining pool should be the pool Fees. Before now, you must have probably already acknowledged the huge role pools are playing and that all the hard work costs them lots of money. The fees charged by crypto miners are used mainly for covering hardware, internet, and administration expenses. Here comes the fee in use. Pools keep a small percentage of each reward to pay these costs. These are usually around 1% and rarely up to 5%. Saving money from joining a pool with lower fees is not that much of a nice idea. At the end of the day you might end up earning just 99c instead of one dollar.
- Size and market share. In the crypto world, usually bigger is better. As explained earlier, big ones include more users. When their net Harsh increases the chances someone from the participants to find the next block. That is good news for you. After all, each price is separated among all miners. To sum it up, joining a bigger pool means you would have faster and repeated incomes.
When somebody hacks a coin’s network and hacks a pool with more than 51% market share, it actually overpowers the rest of the miners and controls the net-hash (short for network hash rate). This allows them to manipulate the speed of finding a new block and controlling the situation. They then begin to mine on their own as fast as they want, without being bothered. To prevent such invasion, also known as “51% attack”, no pool should have an overall market share of any certain cryptocurrency network. Play it safe and try to avoid such pools. I advise you to work on balancing and keeping the network of a coin decentralized.
Examples of good pools to mine with
BTC.com is a public mining pool that can be joined. You can join @BTC.com
Antpool is a mining pool based in China. It is owned by BitMain. Antpool mines about 25% of all blocks. To join go to antpool.com
ViaBTC is somewhat new but has been around for about one year. It’s mainly targeted towards Chinese miners.
Slush was the first mining pool, it currently mines about 3% of all blocks.
Slush is said to probably be one of the best and most popular mining pools although it’s not the largest.
Its also known as Discusfish. It is based in China. F2Pool has mined about 5-6% of all blocks over the past six months. Join @F2pool.com