A mining pool is a group of miners who join forces to generate blocks faster. It is easier for a miner to predict their income being part of a pool rather than mining solo. The pool’s reward is distributed among all members. The stake of each member depends on the computing power they have.
Despite that the majority of pools were created in China, the oldest mining pool, Slushpool, is located in the Czech Republic. It was started on a $45/mo virtual machine back in 2010.
When choosing a pool, it’s important to pay attention to the payment model it uses to reward members. There are seven of them. The most widely used are PPLNS and PPS.
PPLNS (Pay Per Last N Shares) is a way of determining how much of a cryptocurrency one gets for their shares completed. This method of calculating payouts includes a “luck” factor. Using PPLNS, one’s payout per share will have a broad range, but on average, PPLNS earns more than PPS in the long run.
PPS stands for Pay Per Share. It is a more direct method where one gets a standard payout rate for each share completed. This method eliminates the luck but can decrease total income per share. Using PPS, one gets a set amount of cryptocurrency per share for the work they have solved. It has no luck involved, so the payouts do not fluctuate.
See the list of the world’s largest BTC and BCH mining pools here