What are Bitcoin Mining Pools?

One of the first questions faced by anyone interested in mining cryptocurrency is whether to mine solo or join a 'collection'. There are many reasons for and against mining pools. However, if the hash level distribution across the bitcoin network is something to do (and rightly so) then most miners choose to join the group. This is what you need to know.

pros and cons
Pros and cons If you decide to join a mining group or not, it is helpful to think of it as a lottery syndicate - the pros and cons are exactly the same. Being solo means that you will not have to share gifts, but your chances of getting a prize are significantly reduced. Even though groups have a much greater chance of breaking blocks and winning prizes, the prize will be shared between all group members.

Therefore, joining a collection creates a steady revenue stream, even if each payment is simple compared to the full block prize (which is currently at 25 XBTC).

It is important to note that it is important for mining assemblies not to exceed more than 51% of network hashing strength. If one entity finally controls more than 50% of the cryptocurrency network computing power, it can - theoretically - wreak havoc on the entire network. In early 2014, many voiced concerns that the GHash.io bitcoin mining collection was approaching this threshold, and miners were urged to leave the pond.

Currency difficulties
In the case of bitcoin, the current level of difficulty is so high that it is almost impossible for soloists to do profit mining. Unless, of course, you have a garage full of ASIC that is in Arctic conditions. If you are a beginner, joining a mining collection is a great way to reap small prizes in a short time. Indeed, swimming is a way to encourage small-scale miners to remain involved.

What should I have?
Turning coins Of course, bitcoin isn't the only currency out there - it's easy to find a list of mining collections for your chosen cryptocurrency.

One mining method that facilitates bitcoin is "joint mining". This is where blocks that are solved for bitcoin can be used for other currencies that use the same proof of work algorithm (for example, namecoin and devcoin). A useful analogy for joint mining is to think of it like inserting the same set of numbers into several lotteries.

The first miners who don't have strong hardware must see altcoin more than bitcoin - especially currencies based on the scrypt algorithm rather than SHA256. This is because the difficulty of calculating bitcoin is too high for the processor found on a normal PC.

If you are not sure which currency will be mined, there is a collection called 'Multipool' which will automatically divert your mining hardware among the most profitable altcoins. Multipool is updated every 30 minutes, and over time you will see the balance grow in many altcoins. If needed, this collection allows you to repair your hardware on only one altcurrency too.

However, Mark from nut2pools.com said about this type of switching pool: "Loyal coin followers hate them because once a coin is down, its profitability increases. Then all the multipools spin, push the difficulty through the roof in a few hours, then leave again. That makes loyal coin followers must mine the difficulty of returning again with very low profitability. "

Pool prize
Payments When deciding which mining group to join, you need to consider how each group divides the payment and how much (if any) is reduced.

There are many schemes in which groups can share payments. Most of them concentrate on the number of 'shares' that a miner has submitted to the pool as 'proof of work'.

Sharing is a concept that is difficult to understand. Remember two things: first, mining is the process of solving cryptographic puzzles; second, mining has a level of difficulty. When a miner 'breaks the block' there is a corresponding level of difficulty for the solution. Think of it as a measure of quality. If the ranking difficulty of the miner's solution is above the difficulty level of all currencies, it is added to the currency block chain and the valued coin.

In addition, the mining collection sets the level of difficulty between 1 and currency difficulties. If a miner returns a block that has a difficulty score between the group difficulty level and the currency difficulty level, the block is recorded as a 'part'. There is no point in blocking this sharing, but they are recorded as proof of work to show that the miner is trying to complete the block. They also show how much processing power they contribute to the pool - the better the hardware, the more parts it produces.

The most basic version of the distribution of payments in this way is the 'pay per share' (PPS) model. Variation in this case limits the amount paid per share; for example, the maximum payment per share (ESMPPS) equalized, or the maximum payment per share (SMPPS) distributed. Pools may or may not prioritize payments for how miners have recently sent shares: for example, the latest maximum per share payment (RSMPPS). More examples can be found on the bitcoin wiki.

Another factor to consider is how many pools will be deducted from your mining payments. Typical values ​​range from 1% to 10%. However, some pools do not reduce anything.

Start mining with a pond
After deciding which currency to mine and the work group where you work, it's time to start. You need to create an account on the pool website, which is the same as registering for other web services. After you have an account, you must create a 'worker'. You can create several workers for each part of the mining hardware that you will use. The default setting for most collections is for workers to be numbered as their names, and 'x' as their password, but you can change it to whatever you like.
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