Bitcoin Mining Pools: Together Everyone Achieves More

Bitcoin mining can be an interesting and a competitive exercise as miners go “Treasure hunting” to solve or “find” a block before any other miner does. During the last several years we have seen an incredible amount of hash rate coming online which made it harder to have enough hash rate personally (individually) to solve a block, thus getting the payout reward.

To compensate for this pool mining was developed.

Officially defined “Pooled mining is a mining approach where groups of individual miners contribute to the generation of a block, and then split the block reward according to the contributed processing power. Pooled mining effectively reduces the granularity of the block generation reward, spreading it out more smoothly over time among the group.”

To explain, what a mining pool does is accept connections from miners anywhere in the world and pool their hash rate together thus mining with a higher total hash rate.

There are several types of mining pool payout systems. One can choose which is the best for themselves based on your own personal requirements. The different payout systems are summarized below. Choosing a Bitcoin mining pool is up to which pool one feels is the fairest and which can get you the highest number of pay-outs for your investment.

Below you will find information about all mining pool reward types and how they differ from each other.

1. RSMPPS – Recent Shared Maximum Pay Per Share. Like SMPPS, but system aims to prioritize the most recent miners first.
2. PPS – Pay Per Share. Each submitted share is worth certain amount of BC. Since finding a block requires shares on average, a PPS method with 0% fee would be 25 BTC divided by. It is risky for pool operators; hence the fee is highest.
3. PPLNS – Pay Per Last N Shares. Similar to proportional, but instead of looking at the number of shares in the round, instead looks at the last N shares, regardless of round boundaries.
4. PPLNSG – Pay Per Last N Groups (or shifts). Similar to PPLNS, but shares are grouped into “shifts” which are paid as a whole.
5. SMPPS – Shared Maximum Pay Per Share. Like Pay Per Share, but never pays more than the pool earns.
6. POT – Pay On Target. A high variance PPS variant that pays on the difficulty of work returned to pool rather than the difficulty of work served by the pool.

You can begin mining today with competitive pricing and cloud mining contracts which is sure to yield profitability.

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