Bitcoin Mining Pools are a way for Bitcoin miners to pool their resources and share their hash power while sharing the reward evenly based on the number of amount of shares they contributed to solving a block. A “share” is awarded to members of the Bitcoin mining pool who present a valid proof of work done by their Bitcoin miner. Bitcoin mining in pools began when the difficulty for mining increased to the point where it could take years for slower miners to generate a block. The solution to this problem was for the miners to pool their resources to generate blocks faster and thus receive a portion of the Bitcoin block reward on a consistent basis, rather than randomly once in a few months or even years. When making this decision, you need to think about the main aspects of a mining pool.
With hundreds of mining devices already available on the market and with new-age advanced devices hitting stores every day, it is important to check whether the mining device you use is compatible with the pool requirements. For example, Slushpool, one of the oldest mining pools, clearly advises against the use of CPU, GPU, or smart phone-based mining. Similarly, a pool may not support the use of any and all mining software packages, and one may need to use only the software that is compatible with the pool. Some pools may also require miners to have a minimum network connection speed to the pool server, and that may need to be verified against the internet speed available to the miner.
Task Assignment Mechanism
Various pools use different methodologies to assign work to miners. Suppose that group A has more powerful miners and group B has relatively weaker miners. A pool algorithm running on the pool server must be efficient enough to dispatch the mining tasks evenly. A common method is to assign more difficult tasks to the more powerful group A, and relatively easier tasks to the lower group B, which makes it possible to standardize the average communication frequency of the different miners whose capacities vary on the network. . Before joining a mining pool, a miner must ensure that the pool server’s hash tasks are consistent, regardless of the mining power of the participant’s device.
Pool Transparency at Operator Level
There are certain tasks that are performed by the mining pool operator that need to be performed fairly to ensure transparency and trustworthiness among the mining members. For instance, how would a miner know that the total hash rate that is being declared at the pool level is fair, or whether the pool operators are not taking the participant miners for a ride by quoting lower payouts? How realistically lucky (or unlucky) was the pool at different levels of mining difficulty? Mining pools implement various measures, like offering a real-time dashboard view to miners, to bring in the required transparency. Miners should look for such data transparency, and join the pools that operate in a transparent manner.
Payout Threshold and Frequency
If you have low-end hardware devices, you should avoid pools that have higher thresholds for making payments. Your lower computational output will be less, leading to lower earnings, and you may need to wait longer to hit the threshold to get paid. The same applies to payment frequency of the mining pool.
Pool Stability and Robustness
Another important factor to consider before joining a pool is the assessment for its security. Does the pool offer a secure connection or an open connection. Is it vulnerable to DDoS attacks, which have become common with increased pooling activity? And if hit by hackers, can the mining pool withstand and repeal the attack?
Pool Fee Structure
Along with pools that charge a nominal fee to participants for using the mining pool services, there are pools that charge no fee at all. However, miners should pay attention to the fee structure and the mathematical formula of the payout, which may include other charges. Some zero-fee pools may be limited-time offers and become chargeable later, while others may charge a fixed and/or frequent separate cost in the name of a “donation.” Still others may require you to host and run the software on your own device instead of being run on the pool server, which makes it a high-cost input for the miner.
Mining is one of the most emblematic activities of the Bitcoin ecosystem. Beyond its technical difficulties, it has now evolved enough to allow users to mine bitcoins with a certain ease. Before choosing a bitcoin operating pool, be sure to evaluate each pool option you are considering in relation to these key points. Afterwards, your decision will be much better informed and you will have more chances to practice mining with the best performance, the greatest comfort and less inconvenience.