Mining Pool
A group of miners combining their hashrate to find blocks more frequently, sharing rewards proportionally to reduce income variance.
What is a Mining Pool?
A mining pool is a collaborative group of Bitcoin miners who combine their computational power (hashrate) to increase the probability of finding blocks. When the pool discovers a valid block, the reward is shared among all participating miners based on their contributed work. This dramatically reduces the variance in mining income compared to solo mining.
How Mining Pools Work
- Miners connect to the pool's stratum server using mining software
- The pool distributes work (block templates) to all connected miners
- Miners submit shares as proof of their work contribution
- When any miner in the pool finds a valid block, the pool submits it to the Bitcoin network
- The block reward is distributed to all miners according to the pool's payout method
The pool operator manages the infrastructure, constructs block templates, handles payouts, and charges a fee (typically 1-4%) for these services.
Why Miners Join Pools
Solo mining a single ASIC at 200 TH/s against a 600+ EH/s network means waiting an average of 5+ years between blocks. That means potentially years of electricity costs with zero income, followed by a single large payout. Most miners cannot sustain this level of variance.
Pool mining converts this lottery-like experience into steady, predictable income. Instead of one large payout every few years, miners receive small, regular payments proportional to their hashrate contribution. The total expected earnings are the same (minus pool fees), but the variance is dramatically lower.
Types of Pools
Pools differ primarily in their payout method:
- FPPS pools: Guaranteed payment per share for both subsidy and fees
- PPLNS pools: Payment only when blocks are found, lower fees
- PPS+ pools: Guaranteed subsidy per share, fees shared on block found
Pools also vary in size, geographic distribution, fee structure, minimum payout thresholds, and additional features like merged mining support or hashrate monitoring tools.
Choosing a Pool
When selecting a pool, miners should consider: payout method preference, pool fees, minimum payout threshold, pool hashrate (larger pools find blocks more frequently), server locations (lower latency means fewer stale shares), and reputation for reliable payouts.