The rapid increase in mining difficulty makes the process of individual household mining operations irrelevant. To increase production capacity, miners began to unite into so-called mining pools. We bring you a detailed analysis of the five most quoted mining pools on the market. The content of this article is all about bitcoin mining via hardware. The topic of cloud mining is covered in other articles.
The Process Behind Mining Pools
Before we start talking about mining pools in detail, let’s first remember what we already know. Any cryptocurrency is a decentralized network of transactions for the exchange of assets. Creating such a system requires the use of computing power and the involvement of certain resources. Since there is no main center in such a network that would manage the process, it is necessary to interest its participants with some kind of reward. Therefore, in the first network, bitcoin (BTC) was turned into a cryptocurrency, which simultaneously serves as a means of payment within, and a reward for those who support such a network.
Network support consists of confirming each mining operation by combining them into blocks and calculating the key (hash) of it. The block key does not allow changing the information in the future, which excludes the possibility of forging transactions. The block key must have certain properties, and its first characters will be zeros. Finding (calculating) a key with the given parameters does not happen instantly. It is necessary to generate many keys to get the given one. After generating the key, it is necessary to receive confirmation of the correctness of such a blocking from other network participants. Confirmation consists of checking the block key. There must be at least 120 confirmations on the bitcoin network. Such confirmation is another degree of protection against corruption and additional verification of data.
HashRate, in simple words, is a unit of measurement of computing power over a certain time. That is, it is the speed with which your equipment performs the calculation of cryptographic operations to solve blocks (hashing) in the blockchain. Usually, hash rates are measured in hashes per second (H/s).
However, this process is very expensive in order for the mining chain to grow evenly and attract new participants for the purpose of its stability, the complexity of calculating the block key increases, which generates rising competition among miners. The costs of miners are in the purchase of high-performance mining devices and the expense of electricity for its work.
One of the main features of cryptocurrencies is their deflationary nature. This means that the total number of mined coins cannot exceed the number specified by the program code. For example, the maximum amount of bitcoins is 21 million coins. There are not very great numbers. These coins are distributed among the miners according to the consumed computing power. The reward for the signed block does not increase (and even halves every 4 years). And if the group number of miners increases, then the income of each individual miner decreases proportionally.
With the arrival of more and more crypto miners, the competition for the limited reward is growing. For a clear demonstration of this situation, a calculated parameter of the cryptocurrency network “mining difficulty” has been introduced. Mining difficulty is an indicator that reflects how difficult it is to solve the math problem to sign a blockchain and receive a reward for it. The difficulty is automatically recalculated after a certain period. It is different for each cryptocurrency. According to the program code, the complexity is adjusted so that the search for the next block takes about 10 minutes, regardless of the number of miners and the total hash rate.
Mining Pools Today
Now, a mining pool means a dedicated server that is used to distribute mining bitcoins or any other digital coin among the pool members. Obviously, the more there are, the higher the efficiency of the tasks being solved and, as a consequence, the chance to get good earnings. Nowadays, the vast majority of miners prefer to use cryptocurrency mining pools.
Those who are interested should be informed that the mining pools on the market differ in some criteria:
- Bitcoin mining pools vary in size. The advantage of large pools is that they use more mining hardware, have higher profits, and the participants get paid quite often. On the other hand, smaller pools give miners a higher reward since there are not many beneficiaries.
- An important criterion for choosing a mining pool is its safety and reliability. First, it must have strong anti-hacking protection. Secondly, it has to not cheat and steal funds from miners.
- Before deciding to join a specific pool, miners have to pay attention to how each mining pool distributes its payout and what pool fee it charges, if any. Pools usually charge between 1% and 5% as pool fees. Some pools charge no commission at all. Some are limited to a very small fee, which is less than 1%.
Before choosing a bitcoin pooled mining server, the user needs to read about it. Of course, reviews do not always reflect the objective reality, but the overall picture can be drawn. That’s right, large and well-known mining pools will always have the advantage here.
Mining Pools Payouts
Currently, many payment methods are actively used. We suggest you a comparison of them, so you can choose one that is right for you.
PPS (Pay-per-Share) is based on a fixed payment for the power provided by the miner. The price is formed based on the total network complexity and the amount of the reward. You also can try its newer version, PPS+ rewards. It is pretty the same as PPS and likewise has TX fees. This process has a more reliable payment system. That’s why bitcoin miners prefer PPS+ rewards instead of the usual PPS.
Pay Per Last N Shares
Another way is PPLNS (Pay Per Last N Shares). This method is focused on paying for the blocks found. The profit on the pool with the PPLNS reward will be floating: something about 30% of the fixed cost of the equipment that operates on the PPS method to calculate the pool rewards. There is also is an FPPS (The Full Pay-per-Share) variant, which is an improved version of the PPLNS method, in which the pool also distributes the transaction fee between miners, which gives 10-20% of their income.
For those who wish to receive profits only from their own facilities and do it without shares, the solo-mining mode is provided. If you find a blockchain, you will only share a small commission with the mining pool. Anyway, the payment policy is very important. It doesn’t matter if you choose PPLNS (Pay Per Last N) or SMPPS. You should carefully read all the terms of the pool server so that you don’t have problems and disappointments later.
A few words about SMPPS (Shared Maximum Pay Per Shares): this is another modification of PPS. The pool gives additional payout from quickly found blocks in a good scenario during the next block round, increasing the value of the ball by a pre-calculated amount. The priority in additional payments is made for more advanced miners, though. The mining pool commission with this system of remuneration is usually lower than that of the standard PPS.
This way of payout is very stable, as it was designed against scammers and to prevent your data from disclosure. The main plan of its work is to collect the ‘scoring hash rate.’ Basically, it is the summary of your overall mining time and hashing power, so the longer you work with the mining pool server, the higher the hashrate you earn. As soon as you stop bitcoin mining, your scoring hash rate gets more insignificant. Hence, the portion of your shares starts to decrease in number gradually. Once a blockchain is found by the pool operators, bitcoin miners receive their reward payouts.
This way of getting payout is related to PPS, and miners put their bitcoin shares on the block finding duration. You can submit shares considering the time you were mining for the block and the amount of your hashing power. Then the mining pool processing the payout, which is based on the shares miners earned. However, the value you receive for each share will be identical to the block reward divided by the number of shares sent by all miners in whole. So if there is a big group of miners using the same pool, it may decrease the number of each miner’s income.
The Best Bitcoin Mining Pools
We suggest you familiarize yourself with the list of the most popular pools with the developed customer support. There is also a brief explanation of their features.
1. Slush Pool
The famous Slush Pool became the first in the mining industry. This medium-size pool was founded by Marek Palatinus (Slush) in the Czech Republic. By May 2021, this Slush pool controls approximately 10% of all active bitcoins. The large market share can be explained by several factors. First of all, the score-based method reduces the risk of cheating. But the most important advantage of the Slush Pool is, of course, the user-friendly toolbox.
The Slush pool rewards for miners are large enough. However, the commission is not small either. Definitely, not every miner is willing to pay 2% of income. In the world of mining pools, this is considered a fairly large figure. Perhaps this makes the Slush Pool less attractive than it could be. Nevertheless, for Bitcoin miners, it remains one of the most affordable and popular mining pools.
Antpool is a Bitcoin digital currency mining pool created by BitMain, one of the largest mining equipment manufacturers based in China. You can choose the payment method: PPLNS (0% fee) and PPS+ (4% fee from the block reward and 2% from mining fees).
If the extracted amount exceeds 0.001 bitcoin, the payment is made daily. Among the advantages of the Antpool is also a high-quality security system. We’re talking about things like two-factor authentication, email alerts, and the ability to lock your wallet address to protect your personal data. In addition to all the above, it is necessary to note the Antpool platform’s user-friendly interface: the dashboard very clearly shows hash rates and revenues.
Such simplicity and clarity of an Antpool mining pool will be especially useful for beginners in cryptocurrency mining. Bitmain has been making the most energy-efficient mining hardware for a long time, holding a leading position in the market. However, today, due to corporate governance problems, it is going through hard times. So, many professional miners find it unprofitable to work with this company.
BTC.com is one of the largest international cryptocurrency mining pools. It is controlled by the previously mentioned Bitmain. At the btc.com Internet address of the same name as the pool, you can find blocking browsers, information about the BTC.com pool itself, and network statistics. BTC.com is also a wallet address. It was previously known as Blocktrail until the wallet was acquired by Bitmain and renamed BTC Wallet. Wallet slogan: “Your bitcoin. Your control ”, which communicates to the user the main idea of the product -“ Your bitcoins are only under your control.”
The platform has a special type of payment, Full Pay-Per-Share (FPPS). Miners receive not only mining rewards but also transaction fees. In many ways, this approach, plus the brand made on the wallet and own blockchain explorer, allows this platform to be the largest player around.
In terms of mining pool fees, it charges 1.5% and has a payment threshold of 0.001 BTC. However, the pool’s affiliation with Bitmain Tech is still viewed by maximalist bitcoin mining workers as a big disadvantage.
F2Pool is a distributed Bitcoin pool that functions by forming a network connection between each miner of the same rank.
F2Pool creates a sequence of blocks in such a way that the mining difficulty can be adjusted so that a new piece is inserted every twenty seconds. This rather large pool was created in 2013 and operates on the PPS + reward system. As for the fee, F2Pool rates its services quite expensive. The standard commission paid by a miner is 2.5%. An important argument in favor of this pool is the wide choice of currencies for mining. It features Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Zcash (ZEC), and many other coins. Payments are daily, with a threshold amount of 0.005 BTC. Characteristically, the interface is English (not Chinese), very informative, and accessible.
5. Kano CKPool
Also known as KanoPool, Kano CK pool was founded in 2014. This mid-sized pool uses the PPLNS model to calculate payouts. The commission is 0.9%. Transaction rewards are split between members. It currently accounts for about 0.4% of the computing power of the network. The pool calculates 2-3 blocks daily.
The range of services provided by Kano CKPool is limited to Bitcoin mining. There is no payout threshold – you will receive regular but small payments for your computing power.
It is a relatively simple pool with a rather primitive interface. Many features are missing from the control panel, although two-step authorization is available for added security. It should be noted that for each block found, and you will need to wait for a +101 block confirmation in order to receive payment, which may take some time.
ViaBTC is the fifth largest Bitcoin mining pool as well as the largest Bitcoin Cash mining pool in the world. ViaBTC has served over a million users from over 130 countries/regions with secure and professional cryptocurrency mining services. ViaBTC’s history began in 2016. This pool, which is headquartered in China, specializes in Bitcoin and also supports LTC, BCH, ETH, ZEC, and DASH. If you want to receive rewards through PPS, your commission will be 4%. Using PPLNS reduces this figure to 2%. One of the features of ViaBTC that made this pool especially famous is its ability to work without interruption for an infinitely long time.
Poolin is the largest mining pool owned by Blockin and supports the mining of numerous cryptocurrencies. Blockin Service is a global online platform that provides access to blockchain-based technologies and applications. Fun fact: one of the largest bitcoin mining pools on the planet was founded by three former Bitmain employees. At the moment, the pool is among the top five in the world, mining several hundred blocks per month. Bitcoin mining fee is 2.5% of FPPS. Other coins can also be mined through Poolin: BCH, BSV, LTC, and a few more varieties. The absolute advantages of this platform traditionally include open access around the world.
And some useful information for you:
1. Remember that individual home mining not only does not bring a lot of income, but it is also unprofitable for the miner. In 2021, only the pool method will remain relevant.
2. Bitcoin Core is a complete client that forms the network backbone. Bitcoin core features a high level of security, privacy, and stability. However, it has fewer options and takes up quite a lot of disk space and RAM.
3. The processing power of a computer is a quantitative characteristic of the speed at which certain operations are performed on a computer. Most often, processing energy is measured in flops, as well as derivatives from it.
So, if you want to mine cryptocurrency, and especially bitcoin, you need to join the pool. Which mining pool should be right for you? As you can see, the choice is extremely diverse. There are large pools, and there are smaller ones. There are those who pay through the PPS or PPS+ payout methods, and there are those who prefer PPLNS or FPPS (where TX fees are included in the block). Some pools will charge you a large commission, some will charge you less, and some will charge you nothing. Any mining pool operator can protect you from the attack, whereas another one cannot.
Most likely, if you are just starting out as a miner, you should join a large and well-known pool. Perhaps one day, you will decide to change it to a smaller pool with a lower commission. In any case, we wish you good luck.
What is the best mining device?
The best mining device for bitcoins is Asic Antminer S17 PRO. It is a popular model from the producer Bitmain, designed for mining on the SHA-256 algorithm. This algorithm is used to mine Bitcoin and Bitcoin Cash cryptocurrencies.
The Asic Antminer S17 Pro device comes in two versions: model 53 TH/s and 50 TH/s. The novelty works in three modes: normal, economic, and turbo mode, which allows mining pool members to customize and switch modes based on different mining conditions. In turbo mode, the S17 Pro has an efficiency of 45 J/W. Normal mode operates at 39.5 J/TH, while low power operates at 36 J/TH. When mining on Antminer S17 PRO, 144 chips are used, which determines its efficiency and high hash rate compared to analogs. The ASIC S17 PRO delivers a power of 56-62 TH/s with a power consumption of 2520-2790W.
You can check the real customers’ full reviews here.
How many bitcoins can l mine?
The greatest amount of BTC that can be mined by Antminer S17 pro is 0.00208995 bitcoins per day. However, the difficulty shifts every two weeks, so you have to do research and decide when it’s best to start mining.
What should I do to join a mining pool?
To join a mining pool, go to their website and create an account. Connect the hardware (which you already bought) to their server using the link they give you. The mining pool has its own bitcoin nodes that will be used for mining.