Mining Pool Payout Methods Explained: FPPS vs PPS vs PPLNS vs TIDES

You bought the right miner. You dialed in your overclocks. Your electricity rate is locked. And yet the miner next door — running the exact same hardware — is earning more Bitcoin than you every single month. The difference? Their choice of mining pool payout method.

Payout methods are one of the most overlooked variables in Bitcoin mining profitability. They determine how your pool calculates your share of each block, whether you receive transaction fee revenue, how much variance you tolerate, and — critically — whether the pool is holding your Bitcoin as a custodian or paying you directly from the coinbase transaction.

This guide breaks down every major payout method used in Bitcoin mining pools today: PPS, FPPS, PPLNS, PPS+, TIDES, and SOLO. We will compare them head-to-head with real numbers, explain who each method is best for, and expose the hidden fees that most pools would rather you did not think about.

Why Payout Methods Matter More Than You Think

Bitcoin mining is a probability game. When your ASIC submits shares to a pool, it is proving it did work — but finding an actual block is still governed by chance. Mining pools exist to smooth out that variance: hundreds or thousands of miners combine their hashrate, find blocks more frequently, and split the rewards.

But how they split the rewards is where things diverge — significantly. The payout method your pool uses determines:

• Payout consistency — Do you get paid the same amount every day, or does it fluctuate with the pool’s luck?
• Transaction fee revenue — Block rewards are only part of the picture. Transaction fees can add 5-15% or more to total block revenue, and some methods cut you out of this entirely.
• Pool fees — Methods that absorb more risk for miners (like FPPS) charge higher fees to compensate. Methods with less pool risk (like PPLNS) are cheaper.
• Custody risk — Most pools hold your Bitcoin until you withdraw. Some, like OCEAN with TIDES, pay you directly in the coinbase transaction, eliminating custody entirely.
• Pool-hopping penalties — Some methods reward loyalty. Others treat every share equally regardless of when you started mining.

Over a full year, the difference between payout methods on the same hashrate can amount to 5-15% of your total earnings. For a home miner running 200 TH/s, that is the difference between mining being profitable and mining at a loss — especially in the current post-halving environment.

PPS (Pay Per Share): The Steady Paycheck

How PPS Works

PPS is the simplest payout method to understand. Every valid share you submit to the pool is worth a fixed amount of Bitcoin, calculated from the current block reward and network difficulty. You get paid for your shares regardless of whether the pool actually finds a block.

Think of it like a salary job: you show up, you do the work, you get paid. The pool absorbs all the variance risk. If the pool goes three hours without finding a block, that is the pool operator’s problem, not yours. Your daily earnings remain essentially the same.

The PPS Formula

The value of each share under PPS is calculated as:

Share Value = (Block Reward / Network Difficulty) x Share Difficulty

At the current network difficulty of ~125.86 T and a block reward of 3.125 BTC (post-April 2024 halving), your per-share value is a tiny fraction of a Bitcoin — but it adds up predictably over time.

PPS: The Critical Limitation

Here is the catch: pure PPS only pays you for the block subsidy (3.125 BTC) — not for transaction fees. Since transaction fees can represent 5-15% of total block revenue (and occasionally much more during periods of high network congestion or Ordinals/Runes activity), PPS miners systematically leave money on the table.

This is why pure PPS has largely been replaced by FPPS and PPS+ at most major pools. Few pools still offer vanilla PPS, precisely because miners realized they were being shortchanged on transaction fee revenue.

PPS Summary

• Variance: Very low (predictable daily earnings)
• Transaction fees: Not included
• Typical pool fee: 2-4%
• Best for: Miners who prioritize absolute predictability over maximum earnings
• Pools using it: Rare in 2026 as a standalone method — mostly replaced by FPPS/PPS+

FPPS (Full Pay Per Share): The Industry Standard

How FPPS Works

FPPS builds on PPS by adding estimated transaction fee revenue to every share payment. Instead of paying you only for the block subsidy, FPPS calculates what the average transaction fees have been across recent blocks and adds a proportional amount to each share’s value.

This means FPPS pays you the full theoretical value of each share: block reward + average transaction fees, minus the pool’s fee. It is the closest thing to a “complete” guaranteed payout method.

The FPPS Fee Calculation

The transaction fee component in FPPS is typically calculated using a moving average of recent blocks (usually 24-48 hours). This smoothing prevents wild day-to-day swings. When the mempool is congested and transaction fees spike, your FPPS earnings will increase — but with a lag, because the pool is averaging over a window rather than paying real-time fees.

FPPS Share Value = (Block Subsidy + Avg TX Fees) / Network Difficulty x Share Difficulty

The key advantage here: you get paid this amount regardless of pool luck. Even if the pool has a bad day and finds fewer blocks than statistically expected, your payout is unaffected.

Which Pools Use FPPS?

FPPS is the dominant payout method in 2026. Major pools using it include:

• Foundry USA — The largest pool by hashrate, offering FPPS at 0% stated fee (institutional pricing may vary)
• AntPool — FPPS at 4% fee
• F2Pool — FPPS at 4% fee
• Braiins Pool — Recently transitioned to FPPS at 2% fee (formerly Slush Pool, the world’s first mining pool)
• Luxor — FPPS at approximately 1-2% fee
• BTC.com — FPPS at 1.5% fee

For a deeper comparison of these pools, see our Best Bitcoin Mining Pools 2026 guide.

FPPS: The Trade-Off

Because the pool absorbs all the variance — both block-finding luck and transaction fee fluctuation — FPPS pools charge the highest fees. The pool operator is essentially acting as an insurance provider: guaranteeing your earnings in exchange for a premium.

There is also a subtlety that most miners miss: FPPS pools pay you the average transaction fees, not the actual fees from blocks they mine. If the pool happens to mine blocks with above-average transaction fees, the pool keeps the excess. If they mine blocks with below-average fees, the pool takes the loss. Over time, this is a wash — but it means the pool always has an incentive to include the highest-fee transactions in their block templates.

FPPS Summary

• Variance: Very low (predictable daily earnings including TX fees)
• Transaction fees: Included (averaged)
• Typical pool fee: 0-4%
• Best for: Most miners, especially those who need predictable cash flow for electricity payments
• Custody: Pool holds your Bitcoin until you reach payout threshold and request withdrawal

PPLNS (Pay Per Last N Shares): The Loyalty Reward

How PPLNS Works

PPLNS flips the PPS model on its head. Instead of paying you a fixed amount per share, PPLNS only pays when the pool actually finds a block. When a block is found, the pool looks back at the last N shares submitted (where N is a large number determined by the pool) and distributes the entire block reward proportionally among the miners who contributed those shares.

If you contributed 1% of the last N shares, you get 1% of the block reward. Simple — in theory.

The “Last N Shares” Window

The “N” in PPLNS is crucial. Most pools set N to be roughly equivalent to the number of shares expected to find one or two blocks at the pool’s current hashrate. This means:

• If you have been mining with the pool consistently, your shares fill up a good portion of that window, and you get a proportional payout.
• If you just connected five minutes ago, you have very few shares in the window, and your payout is minimal — even if the pool finds a block right then.
• If you disconnect from the pool, your shares gradually “age out” of the window over time, reducing your payouts to zero.

This is by design. PPLNS was specifically created to discourage pool-hopping — the practice of jumping between pools to exploit temporary statistical advantages. Pool-hoppers get punished under PPLNS because they never have a full share window, while loyal long-term miners benefit.

PPLNS Variance: The Double-Edged Sword

PPLNS payouts can swing significantly day to day. If the pool gets lucky and finds three blocks in an hour, everyone gets a big payday. If the pool goes eight hours without a block, there is nothing. Over weeks and months, these swings average out — but for home miners relying on mining revenue to cover electricity bills, the short-term unpredictability can be nerve-wracking.

The upside? PPLNS pools charge significantly lower fees, often 0-2%, because the pool is not absorbing variance risk. The miners are. And over a long enough time period, PPLNS miners often earn slightly more than FPPS miners because they are not paying that insurance premium.

PPLNS and Transaction Fees

Under PPLNS, you receive a proportional share of the actual block reward — including whatever transaction fees were in that specific block. This means during periods of high transaction fees, PPLNS miners can earn significantly more than FPPS miners who are receiving a lagging average.

PPLNS Summary

• Variance: High in the short term, normalizes over weeks/months
• Transaction fees: Included (actual per-block fees, not averaged)
• Typical pool fee: 0-2%
• Best for: Long-term miners who can tolerate variance, cost-optimizers, large operations
• Pools using it: AntPool (0% PPLNS option), ViaBTC (2%), Kano CKPool (0.9%)

PPS+ (Pay Per Share Plus): The Hybrid Approach

How PPS+ Works

PPS+ is a hybrid of PPS and PPLNS, designed to give miners the best of both worlds:

• Block subsidy (3.125 BTC): Paid per-share, just like PPS — guaranteed and predictable
• Transaction fees: Distributed using PPLNS — variable, based on actual blocks found

This split means your base earnings are stable (you always get paid for the block reward component of each share), but your transaction fee income fluctuates with pool luck and actual mempool conditions.

PPS+ vs FPPS: What Is the Difference?

The distinction matters more than you might think:

• FPPS guarantees both block reward and transaction fees (using averages). Total predictability. Higher pool fee.
• PPS+ guarantees only the block reward. Transaction fees are variable (actual, not averaged). Slightly lower pool fee.

During normal mempool conditions, PPS+ and FPPS earnings are very similar. But during fee spikes (like during Ordinals crazes or heavy Runes minting), PPS+ miners who are on a pool that finds blocks during the spike earn actual elevated fees, while FPPS miners receive a smoothed average that lags behind the spike.

Conversely, if the pool has a bad luck streak during a fee spike, PPS+ miners miss out while FPPS miners still get the average.

PPS+ Summary

• Variance: Low for base earnings, moderate for transaction fee component
• Transaction fees: Included (actual, distributed via PPLNS)
• Typical pool fee: 2-4%
• Best for: Miners who want base-rate stability but also want to benefit from fee spikes
• Pools using it: ViaBTC (4%), F2Pool (2.5% option), BTC.com

TIDES (Transparent Index of Distinct Extended Shares): The Cypherpunk Method

What Is TIDES?

TIDES is the payout method used exclusively by OCEAN, the mining pool founded by early Bitcoin developer Luke Dashjr. It stands for Transparent Index of Distinct Extended Shares, and it represents a fundamentally different philosophy from every other payout method on this list.

The core innovation: OCEAN does not hold your Bitcoin. Instead of the pool collecting block rewards and then distributing them to miners (as every FPPS/PPS/PPLNS pool does), TIDES builds the block template so that miners are paid directly in the coinbase transaction of each block the pool mines.

How TIDES Works: The Share Log

TIDES maintains a rolling share log — a record of every miner’s valid shares over a window of the last 8 blocks found by the pool. When a new block is found:

1. OCEAN calculates each miner’s proportional contribution to the share log
2. A coinbase transaction is constructed that pays each qualifying miner their share directly from the block reward
3. The block is broadcast to the network
4. When the block is confirmed, miners receive their BTC directly — no withdrawal needed, no custodial risk

The 8-block rolling window serves a similar purpose to the “N” in PPLNS: it smooths out variance by considering your contributions over multiple blocks rather than just one. If you contributed 2% of shares across the last 8 blocks, you receive 2% of each new block’s reward.

Non-Custodial: Why This Matters

With every other payout method, the pool collects the block reward into a pool-controlled wallet and then distributes it to miners based on their chosen payout method. This means:

• The pool has custody of your Bitcoin
• You need to trust the pool to actually pay you
• The pool could be hacked, exit-scam, or have funds frozen
• You must meet minimum payout thresholds before you can withdraw

TIDES eliminates all of this. Your Bitcoin goes directly from the block reward to your wallet. The pool never touches it. For cypherpunks and sovereignty-focused Bitcoiners, this is not just a nice feature — it is a fundamental requirement.

TIDES Fees and DATUM

OCEAN charges a 2% pool fee under TIDES. However, miners who run their own Bitcoin node and use OCEAN’s DATUM protocol (which lets you construct your own block templates) can reduce the fee to just 1%. This is a direct incentive for decentralization — OCEAN wants miners to run their own nodes, and they put money behind that conviction.

OCEAN also supports Lightning Network payouts via BOLT12 offers for smaller miners whose per-block share does not justify an on-chain output.

TIDES vs FPPS

The comparison between TIDES and FPPS comes down to philosophy vs convenience:

• Earnings predictability: FPPS is more predictable day-to-day. TIDES has some PPLNS-like variance (you only get paid when the pool finds blocks).
• Transaction fees: TIDES includes actual transaction fees from blocks the pool mines. FPPS averages them.
• Custody: TIDES is non-custodial. FPPS requires trusting the pool with your funds.
• Decentralization: TIDES actively incentivizes running your own node. FPPS pools typically control block template construction entirely.
• Pool size matters: OCEAN is smaller than Foundry or AntPool, which means longer gaps between blocks and more variance. As OCEAN’s hashrate grows, TIDES variance decreases.

TIDES Summary

• Variance: Moderate (8-block rolling window smooths it, but depends on pool size)
• Transaction fees: Included (actual fees from mined blocks)
• Pool fee: 2% (1% with DATUM/own node)
• Custody: Non-custodial — paid directly in coinbase transaction
• Best for: Sovereignty-focused miners, cypherpunks, anyone who does not want a third party holding their Bitcoin
• Pool using it: OCEAN (exclusively)

SOLO: Full Block or Nothing

How Pool-Facilitated Solo Mining Works

Solo mining through a pool means you are mining independently — if your miner finds a block, you get the entire block reward (3.125 BTC + all transaction fees). If you do not find a block, you get nothing. The pool simply provides the infrastructure: stratum connection, block templates, and share tracking.

For a deep dive on solo mining mechanics, see our guide on What Is Solo Mining and our Pool Mining vs Solo Mining comparison.

The Math: Solo Mining Probability

At the current network hashrate of approximately 800-900 EH/s, the probability of finding a block with a given hashrate is:

Daily probability = (Your Hashrate / Network Hashrate) x 144 blocks/day

Example: 200 TH/s miner
Daily probability = (0.0002 PH/s / 850,000 PH/s) x 144 = ~0.0000339%
Expected time to find a block = 8,100+ years

For a 200 TH/s miner, solo mining is statistically unreasonable. But for some miners, especially those running Bitaxe or Nerdminer devices, it is not about the expected value — it is about the possibility. Every share has a chance, however small, of being the one that solves a block.

Solo mining is the ultimate lottery ticket. And several solo miners with surprisingly small hashrates have won that lottery — Bitaxe miners have famously found full blocks as solo miners, taking home the entire 3.125+ BTC reward.

SOLO Summary

• Variance: Extreme (all or nothing)
• Transaction fees: You keep 100% of everything if you find a block
• Pool fee: Typically 1-2% (solo pool infrastructure fee)
• Best for: Lottery miners, Bitaxe enthusiasts, cypherpunks who want the full block reward experience
• Pools offering it: CKPool (solo option), Solo CKPool, various solo mining pools

Payout Methods Compared: The Complete Table

Here is every major payout method side by side:

Which Payout Method Is Best for You?

There is no single “best” payout method — it depends on your situation, your risk tolerance, and your values. Here is a decision matrix based on miner type:

Small Home Miner (Under 1 TH/s — Bitaxe, Nerdminer, NerdAxe)

Recommended: SOLO or TIDES (OCEAN)

At this hashrate, pool mining earns you fractions of a cent per day. The primary motivation is participation in the Bitcoin network, not revenue. Solo mining gives you a tiny but real chance at a full block reward, while TIDES on OCEAN lets you mine in a pool with non-custodial payouts and support the most decentralized pool in the ecosystem. Many Bitaxe miners point their devices at solo pools for the lottery ticket experience.

Medium Home Miner (100-500 TH/s — one to a few ASICs)

Recommended: FPPS or TIDES

This is the sweet spot for most home miners. FPPS gives you predictable daily earnings that you can budget against electricity costs. TIDES on OCEAN is an excellent choice if you value sovereignty and are willing to accept slightly more variance. At 200+ TH/s, your TIDES payouts on OCEAN will be reasonably consistent, especially as OCEAN’s pool hashrate continues to grow.

If you choose FPPS, pools like Braiins (2% fee) or Luxor offer a good balance of fees and features. Check our pool comparison guide for current recommendations.

Large Home Operation or Small Farm (500 TH/s – 5 PH/s)

Recommended: PPLNS or PPS+

At this scale, you can absorb short-term variance, and the lower fees of PPLNS start to compound into real savings. A 2% fee difference on a multi-PH/s operation adds up to significant Bitcoin over a year. PPS+ is a good middle ground if you want base-rate stability but still want to capture actual transaction fees during spikes.

Large Mining Operation (1+ PH/s)

Recommended: PPLNS or custom arrangements

Large operations often negotiate custom fee structures directly with pools. PPLNS at scale effectively eliminates variance (the law of large numbers works in your favor), and the lower fees directly improve your bottom line. Some large miners split hashrate across multiple pools and methods to hedge.

Cypherpunk / Sovereignty-Focused Miner

Recommended: TIDES (OCEAN)

If you mine Bitcoin because you believe in decentralization — not just as a business — OCEAN’s TIDES is the only method that aligns with those values. Non-custodial payouts, the ability to construct your own block templates with DATUM, direct incentives for running your own node, and a pool operator (Luke Dashjr) with deep roots in Bitcoin development. Read our full OCEAN Mining Pool review for setup instructions.

Real-World Earnings Comparison: 200 TH/s Miner

Let us put concrete numbers on these methods. We will model a 200 TH/s miner (roughly equivalent to a single Antminer S21) operating for one month under each payout method. These numbers use February 2026 network conditions:

• Network difficulty: ~125.86 T
• Network hashrate: ~850 EH/s
• Block reward: 3.125 BTC
• Average transaction fees per block: ~0.25 BTC (typical, varies significantly)
• Hashprice: ~$33/PH/day
• BTC price: ~$65,000

Gross theoretical monthly revenue at 200 TH/s (before pool fees):

Daily revenue = 200 TH/s x $33/PH/day / 1000 = ~$6.60/day
Monthly gross = $6.60 x 30 = ~$198/month = ~0.00305 BTC/month

Now let us see what each payout method actually delivers after fees:

Note: These figures are estimates based on February 2026 network conditions and assume average pool luck. Actual earnings will vary based on BTC price movements, difficulty adjustments, mempool conditions, and pool luck.

The key takeaway: the difference between a 1% fee PPLNS pool and a 4% fee FPPS pool is roughly $6/month on 200 TH/s. That is about $72/year — not life-changing, but meaningful for a home miner operating on thin margins. Scale that to 2 PH/s and the fee difference becomes $720/year.

Use our Mining Profitability Calculator to model these scenarios with your own hashrate, electricity cost, and hardware.

Hidden Fees and Gotchas to Watch For

The stated pool fee is only part of the story. Here are the hidden costs that can eat into your mining revenue:

1. Withdrawal Fees

Most custodial pools charge a fee when you withdraw your Bitcoin. Some pools cover this cost; others pass it directly to miners. With on-chain transaction fees fluctuating, a withdrawal during a high-fee period can cost $5-50+ per transaction. Pools that batch withdrawals or support Lightning Network payouts help mitigate this.

2. Minimum Payout Thresholds

Many pools require you to accumulate a minimum balance before they will send a payout — commonly 0.005 to 0.01 BTC. For small miners, this means your Bitcoin sits in the pool’s custody for weeks or months. OCEAN’s TIDES avoids this for on-chain payouts (though very small miners get Lightning payouts until they accumulate enough for an on-chain output of 0.01048576 BTC).

3. Transaction Fee Revenue Manipulation

In FPPS, the pool decides how to calculate the “average” transaction fee component. There is no universal standard. Some pools use a 24-hour trailing average, others use 48 hours, and the calculation methodology is often opaque. A pool could theoretically underestimate the average transaction fees and pocket the difference. Look for pools that publish their FPPS rate calculation methodology transparently.

4. Stale and Rejected Shares

Shares that arrive too late (stale) or are invalid (rejected) are not counted by any payout method. High latency to the pool server increases your stale rate, which directly reduces earnings. Choose a pool with servers geographically close to you, and monitor your stale/reject rate — anything above 1-2% is a problem.

5. Luck-Based FPPS Rate Adjustments

Some FPPS pools quietly adjust their effective rate based on pool luck. If the pool has been unlucky, they may temporarily lower the FPPS rate to avoid paying out more than they earn. This is technically a deviation from “pure” FPPS, but it happens. Foundry and Braiins are generally transparent about this; smaller pools may not be.

6. Block Template Quality

While Bitcoin does not have Ethereum-style MEV (Miner Extractable Value), the pool’s block template construction still matters. Pools that optimize transaction selection to maximize fee revenue will generate higher total block values. Some pools have been caught including out-of-band payments (transactions that pay the pool directly rather than through standard transaction fees), which inflates the pool’s revenue without increasing miner payouts. OCEAN’s DATUM protocol addresses this by letting miners construct their own block templates.

7. Exchange Rate Risk on Payouts

Pools that pay in altcoins or allow conversion to fiat may apply unfavorable exchange rates. Always opt for BTC-denominated payouts to your own wallet.

The Decentralization Factor: Why Your Pool Choice Matters Beyond Earnings

We would be failing our mission as Mining Hackers if we did not address the elephant in the room: pool centralization.

As of early 2026, Foundry USA and AntPool together control over 50% of Bitcoin’s total hashrate. This concentration is an existential risk to Bitcoin’s censorship resistance. A pool that controls more than 50% of hashrate could theoretically censor transactions, execute selfish mining strategies, or be compelled by government entities to filter specific addresses.

Your choice of mining pool — and by extension, its payout method — is a vote for how Bitcoin’s mining infrastructure should work. Mining with OCEAN (TIDES) or smaller pools (PPLNS options) directly supports hash rate decentralization, even if it means slightly less predictable payouts.

This is not just idealism — it is self-interest. A centralized mining ecosystem is a fragile one, and fragile systems eventually break. Diversifying hashrate across pools protects the value of the Bitcoin you are mining.

Frequently Asked Questions

The Bottom Line

Mining pool payout methods are not just a technical footnote — they are a strategic decision that impacts your earnings, your exposure to custodial risk, and the health of the Bitcoin network itself.

For most home miners, FPPS is the practical default: predictable, inclusive of transaction fees, and widely available on reputable pools. If you are optimizing for maximum long-term earnings and can handle variance, PPLNS with a low-fee pool edges out FPPS by saving on pool fees.

But if you are mining Bitcoin because you believe in what Bitcoin represents — decentralization, sovereignty, censorship resistance — then TIDES on OCEAN is the method that puts your money where your convictions are. Non-custodial payouts, node-running incentives, and a transparent share accounting system built by people who actually care about Bitcoin’s future.

Whatever you choose, do not default blindly into the biggest pool with the biggest name. Understand what you are choosing, why you are choosing it, and what it costs you — in fees, in custody risk, and in the centralizing effect on Bitcoin’s hash rate.

Your hashrate is your vote. Cast it wisely.

For more on choosing the right pool, explore our Best Bitcoin Mining Pools 2026 comparison, learn about mining profitability in today’s market, or browse the Bitcoin Mining Glossary to master every term in this guide.