Mining Pools

bitcoin mining pool

Bitcoin mining pools are a way of sharing your computing power with others in an effort to improve your chances of receiving a payout from the bitcoin network. 

As a solo miner, with your own hardware, your chances of generating a block and receiving a reward are very small and getting smaller as the mining difficulty increases. The solution is to join with like-minded soles in a bitcoin mining pool and share your resources to generate more block more quickly.

Of course, those blocks are shared between everyone in the pool, but generally speaking, a small share of something is better than 100% of nothing.

Considerations before joining a Pool

When it comes to mining pools, there are a plethora of choices that are available to you. But before settling on a particular option, it is essential to have a full grasp of the main characteristics of these pools and what they can offer.

The list below highlights some of the key elements that you have to familiarize yourself with:

1. Trust in the Mining Pool

Since you will be entrusting your money to a third party, you can’t afford to go with an obscure option. Even if you happen to find some pools that offer lower fees and promise higher profitability than the established players, it is advisable to always to stick with pools that boast a stellar reputation in the network.   

2. Pool Hashing power

There is no better indicator of profitability than hashing power. Pools with a high hashing rate tend to mine a large number of blocks and are more likely to pay miners on a frequent basis.

Pools with a low hash rate have trouble staying profitable due to the low number of blocks that they’re handling. This often leads to a high payout variance for the miners and might even culminate with complete insolvency.

3. Pool Stability

The stability of the system that the pool uses is a highly critical aspect that could either boost or undermine your mining efforts. You have to make sure that the pool you join has a proven track record of smooth operating and that the necessary contingency plans are in place in case of system malfunction.

4. Payout methods

Payments are made in a wide array of ways. Some pools pay miners after they submit their share of the puzzle even before the mathematical problem is solved. Others only pay out after the entire block is solved.

5. Cloud mining option

Some pools offer you the option of combining pooled mining with cloud mining. This is especially practical if you lack an adequate capital base to acquire the required hardware. The cost of your cloud-based rig is taken from your mining profits.

Top Mining pools

Here's a list of the top mining pools:

1. Antpool

It is one of the largest pools in the world. It processes more than 20% of all blocks in the network  

2. F2Pool

This large Chinese-based pool mines around 25 % of all blocks. Its user interface is exclusively in Mandarin, so joining might prove a little bit difficult

3. Slush pool

It was the first mining pool in the Blockchain technology. While not the largest, it is run very efficiently and handles about 7% of the network blocks

4. BTCC

This is another Chinese pool with a very high hash rate. It handles 15% of the blocks and offers Bitcoin wallet and exchange services

5. BW Pool

This pool was established in 2014 and controls around 7% of the hash rate in the network.