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Every miner who wants to join Bitcoin mining must first consider whether to mine alone or join a mining pool. Mining alone means that the Bitcoins mined belong to the miner himself and do not have to share the rewards with others. However, the chance of receiving rewards is greatly reduced. Joining a mining pool for mining means that there is a greater chance of winning rewards. , but the reward is shared by all miners in the mining pool. Having said this, some newbies in the currency circle will ask, what exactly does a Bitcoin mining pool mean? Below, the currency circle will give you a detailed introduction to Bitcoin mining pools. I hope that through this article, newbies in the currency circle can understand Bitcoin mining pools.

## What does Bitcoin mining pool mean?

Since more and more people are mining Bitcoin on the global network, the number of Bitcoins produced every day is fixed. If an individual wants to mine a block (currently a block is about 25 Bitcoins)
The probability is comparable to winning the lottery, so everyone gathered together to keep warm, forming a computing set that can report blocks, and this is how the mining pool was born. Speaking professionally, a mining pool is actually a grouping behavior that gathers the computing power of miners on the network to mine Bitcoin. It forms a team of miners and directs everyone to dig together. Once anyone in the team obtains a block (a block is about 25 Bitcoins), the mining pool will distribute it to everyone based on the currency obtained in the block.

The mining pool industry has developed rapidly this year, and the solo computing power not in the mining pool has been compressed to only about 10%. Of course, this is related to the rapid increase in the computing power of the entire network, and the rapid increase in mining difficulty. It is already difficult to mine blocks by yourself without being in a mining pool. The development of mining is an inevitable trend with the improvement of computing power.

With the rapid expansion of mining computing power, the probability of mining blocks with small computing power has become extremely small. What is likely to happen is that small miners have been mining for several years, investing a lot of mining machines, electricity bills and other costs, but in the end they have dug nothing. In order to avoid this risk, mining pools came into being.

In order to avoid the risk of no profits in the long term, miners adopt the method of "hugging together for warmth" and "concentrating computing power to do big things." Scattered computing power is connected to the mining pool according to a certain network protocol. The mining pool allocates computing tasks to the computing power connected to the mining pool. The scattered computing power that was previously "working on its own" is coordinated and arranged by the mining pool, and the mining pool concentrates the computing power to mine together. mine. The scale effect of the mining pool can ensure a relatively stable output every day, and the longer the time, the closer the income is to mathematical expectations.

To put it simply, the mining pool is equivalent to the project manager. The computing power connected to the mining pool according to the agreement is the project team member who obeys the project manager's work arrangements. The project is mining to find a solution that meets the requirements of the Bitcoin system as soon as possible. All project team members advance their work tasks and submit work results as arranged by the project manager. The project manager rewards project members based on the specific performance of their tasks in a "more work, more gain" manner.

The emergence of mining pools has also benefited miners in many ways:

Miners have a relatively stable output every day, avoiding the risk of long-term no returns from independent mining and reducing the uncertainty and volatility of returns.

After connecting to the mining pool, small miners no longer need to run a full node for mining. They only need to perform the computing tasks assigned by the mining pool and submit the calculation results as required to get mining rewards.

Miners can choose different mines to host mining machines, and can connect their computing power to different mining pools.

## How does the mining pool operate?

At present, mainstream mining pool operations are mainly divided into two modes: PPLNS and PPS:

1.PPLNS mode: full name Pay Per Last N
Shares, that is, paying income based on the past N shares. This means that once all miners discover a block, everyone will distribute the currency in the block according to the proportion of the number of shares each person contributed.
In the PPLNS mode, mining pools are also lucky (similar to buying lottery tickets). If the mining pool can discover many blocks in a day, then everyone’s dividends will be larger. If the mining pool cannot discover blocks in a day, then No one will gain anything. The current computing power of the entire network is about 300P. If the mining pool has 50% of the computing power, every time a block is calculated, there is a 50% possibility of obtaining the 25 BTC of this block (the greater the computing power of the mining pool, the higher the mining power). The greater the chance) so this model is also risky.

2.PPS mode: full name Pay-Per-Share
---That is, this method pays for each share. The PPS distribution model is the same as that of workers. The more you work, the more you get. According to the proportion of your computing power in the mining pool, the minerals that the mining pool can obtain every day are estimated. As long as the difficulty of the Bitcoin system remains unchanged, your daily income remains unchanged. The PPS model requires a handling fee, which is generally 2%-5%. When the mining pool cannot mine blocks, the mining pool will break even and reduce the risk of the mining pool.

3. There is also a SOLO mode: If you have enough computing power, you can choose the SOLO mode and you will get all the block rewards. Ant Pool provides SOLO mode mining.

Through the above introduction, I believe everyone has some understanding of Bitcoin mining pools. The editor of Bitcoin Circle reminds all investors who want to obtain Bitcoins through Bitcoin mining pools. If you have a mining machine with 1T-50T computing power, you must choose Mining pools with PPS distribution model; if you have a mining machine with 50T-500T computing power, you must choose a mining pool with PPLNS distribution model; if you have a mining machine with more than 1P computing power, you must choose a mining pool with SOLO distribution model. In short, try your best Choose a mining pool with large computing power. If you want to know more relevant knowledge, you can follow the currency circle. The editor of the currency circle will continue to update relevant reports in the future!