In this article, I’m going to share with you which pool you should be using, all the different payment methods, and everything about mining pools in general.
If you are new to mining or have any questions and confusion regarding mining pools, I hope this article will help you and clarify everything for you.
So let’s get started.
Table of Contents
What is Mining Pool
Mining is validating a transaction in a blockchain that needs high computational power, and the miner provides the computational power.
At the start of crypto, small miners could validate a transaction, but now huge companies started mining, so the difficulty increased and wiping out the small miners so the mining pool came into the picture.
The Mining Pool has solved the problem of small miners. All the miners come into a single agreement, and all the cryptocurrency earned from mining is split into all the miners, depending on their computational power.
If you are a solo miner, then it will be tough to get a single block. If you are trying to build a mining farm, then solo mining will be good for you.
In the mining pool, the payout will be in small amounts, unlike for solo mining. But the small amount payout will frequently be getting; this way, the payments will be consistent and reliable.
Choose Best Mining Pool
To choose the best mining pool, you should look into some factors: Reward system, Fees, Payment Method, Server Location, and Reputation of the mining pool.
I’m going to go into detail with each of the factors to choose the best mining pool.
Different Types of Reward System
A Reward system is where the mining pool decides how to pay miners.
There are different types of mining reward system which is given below:
- PPS (Pay Per Share) – Instant, guaranteed payout to a miner who has mined the blocks.
- PPLNS (Pay Per Last N Shares) – Miner gets rewards as per the basis of N last shares.
- FPPS (Full Pay Per Share) – Miner gets full rewards.
- Prop (Proportional) – The rewards are derived from “rounds” – the time between discovering a block in the pool and the next. You will be rewarded for the shares you contribute proportional to the total shares you submit during each round.
Fees and Payments
Fees
Mining provides the services for you, so that they will charge some fees depending on mining pools. Some charge around 1% and some charge almost 5%, so it all depends on which service you want to use.
You can check the pool fees details and reward system on this website:
Payments
Payments should give in whichever cryptocurrency you are mining. If you are mining Ethereum, you should get paid in Ethereum only, not in USDT.
Some mining pools convert the cryptocurrency you are mining to BTC, which I will not suggest you do.
The best mining pools provide the payouts in cryptocurrency, and choose a mining pool that gives payouts every 4 hours to 24 hours.
Pool Hashrates
A mining pool with the highest hashrates is always good because the chances of finding a block increase so that the reward also increases.
The pool hashrates are calculated by the computational power of all the miners.
Note: Hashrates, which calculates the computational power of the hardware; depending upon Hashrates you can calculate profits.
Server Location
Server location also plays a significant role in mining pools. If the mining pool is in ASIA and you are mining from the USA, connecting to the server takes time so that the reward will also get dropped, which is so minimal.
The further away from the server, the pin will be very low.
Always choose a mining pool which is very close to your country. Like if you are in the USA, then you can choose a Canadian server.
Reputation
So why does reputation also matter because? In the past years, most of the mining pool has been hacked, yet they cannot recover the funds. Some of the mining pool has refunded the fund, and some are not yet refunded, so reputation also plays a significant role in a mining pool.
Payout Threshold
Choose a mining pool that provides the customization of the payout threshold. It’s you’re a smaller miner, it might not matter you’re getting paid out when you hit the pool’s predetermined minimum payout threshold.
I’ll provide an example of this:
Hivon has an amount of 0.1 per day, and you can’t alter it. Every time you get to point one on a given day, the pool pays you out at the rate of one per day. You can’t change it over on the ether mine. However, you can alter the maximum payout, so you can increase that threshold by, for instance, to 0.5 Ethereum, which means that the pool pays me once I reach 0.5 Ethereum.
Why is this so important?
If you’re entering the gigahash-like territory, you don’t want every transaction to hit your account because what does it mean? At the very least, in the US and everywhere else, you’re required to keep track of the transactions to report taxes.
This can be a significant amount of transactions to track and keep track of when your tax time comes around. I have made this mistake during my first year of mining and then realized that it is crucial to establish the minimum threshold for payout.
For me, I determined the minimum threshold for payout at what I want to see it be so that I receive payment about once every week. There are 52 transactions I have to keep track of throughout the year, and perhaps not thousands of transactions. I must keep track of it throughout the year, so this is crucial for me. not all pools, as we have seen with Ethermine and hivon, lets you determine the minimum payout threshold.
Best mining pools for Bitcoin
| Mining Pool | Server Location | Fees | Website |
|---|---|---|---|
| Antpool | China | 4% | https://v3.antpool.com/ |
| F2pool | Global | 2.5% | https://www.f2pool.com/ |
| viaBTC | Germany | 4% | https://www.viabtc.com/ |
| Slushpool | Global | 2% | https://slushpool.com/en/home/ |
FAQ
Are Mining Pools Worth It
Yes, it is worth it for mainly small miners because the mining pool has taken control of all the technical stuff. Small miners can’t compete with the big miners to find a block and get rewarded, so the mining pool has come up with the solution to take many small miners to find a particular block so that the small miners also get the payout frequently.
What are mining pool benefits?
The advantages of mining pool include:
1. Stable income – Most mining pools offer an auto-switching feature to allow miners to earn a steady income from lucrative mining coins.
2. Lower cost – Start mining by yourself. It takes a lot of equipment, including building software.
3. Simple setup mining pools make it simple to set up to use your mining application.
4. Additional features: Pools offer an Android app that miners can monitor real-time mining activity. Additionally, they will notify you of the payouts for your currency.
What are better PPS or PPLNS?
Pay Per Last N Shares is suitable for stable miners that connect to the pool and stay there 24/7. Still, even in this case, your reward with a stable cash rate will differ from one block to another as there are different numbers of miners and so on, plus if your equipment is weaker or less powerful than other miners in the pool.
What is PPS payout?
Pay per share, so you are getting paid for each share you contributed to the current block.
This one is the easiest way to distribute the reward every miner is getting paid for each share he submitted to the block found by this pool. To find a new block, the pool submitted 1 million shares, and if you submit 100 thousand shares for this block, you get 10% of the reward.
Here is the reward, so if you’re a night miner, and let’s say you leave your computer to mine overnight and disconnect from the pool till the block is found in the morning, you still get the reward based on your input.
