Definition
Mining pools allow individual miners to receive more frequent, smaller payouts instead of waiting for the extremely rare event of solo mining a block. When any member of the pool finds a valid block, the reward is distributed among all participants based on the shares of work they contributed.
Pools charge a fee (typically 1-3%) and use various payout schemes like FPPS, PPS, and PPLNS. While pools make mining income more predictable, they also raise decentralization concerns when a few pools control large portions of the network hashrate.
In Simple Terms
A group of miners who combine computing power and share block rewards proportionally.
A group of miners who combine their hashrate to increase the probability of finding blocks, then split the rewards proportionally based on each miner's contribution.