How to Choose a Cryptocurrency Mining Pool
FACEBOOK
TWITTER
LINKEDIN
By ADAM BARONE
Reviewed By JULIUS MANSA
Updated Jun 30, 2020
TABLE OF CONTENTS
EXPAND
What Is Cryptocurrency Mining?
Understanding Cryptocurrency Mining Pools
1. Infrastructure Compatibility
2. Task Assignment Mechanism
3. Pool Transparency by Operator
4. Payout Threshold and Frequency
5. Pool Stability and Robustness
6. Pool Fee Structure
Does Size Matter?
Supporting Decentralization
What Is Cryptocurrency Mining?
Cryptocurrency mining is the process through which transactions are verified and added to a blockchain public ledger. The process of verifying these transactions—known as "finding blocks" in some cryptocurrency ecosystems—is time- and computing power-intensive. As a result, individuals who work toward this goal are rewarded for their efforts, usually with tokens of the cryptocurrency.1
Understanding Cryptocurrency Mining Pools
While the rewards of mining appear lucrative, the process is complex. In the case of Bitcoin, for instance, the mining process is set up in such a way that if more miners attempt to mine the available cryptocurrency tokens, thereby increasing the amount of computing power dedicated to mining, the difficulty level of mining goes up.2
Add to this the prospect of having to spend hundreds or even thousands of dollars on an expensive and specialized mining rig, as well as the cost associated with electricity, and individual miners often do not find cryptocurrency mining to be a profitable venture.
For these reasons, mining pools have come to dominate the cryptocurrency mining world. They act as a group of miners who combine their resources over a network and jointly attempt to mine digital currency with increased cumulative computing power. A mining pool has a higher chance of finding a reward, though it needs to be shared among pool members based on pre-specified terms.
Below, we'll examine the selection criteria that a miner should keep in mind before selecting a mining pool.
1. Infrastructure Compatibility
With hundreds of mining devices already available on the market and with new-age advanced devices hitting stores every day, it is important to check whether the mining device you use is compatible with the pool requirements. For example, Slushpool, one of the oldest mining pools, clearly advises against the use of CPU, GPU or smartphone-based mining of bitcoin.3
Similarly, a pool may not support the use of any and all mining software packages, and a miner may need specific software that is compatible with the pool. Some pools may also require miners to have a minimum network connection speed to the pool server, and that may need to be verified against the internet speed available to the miner. Before evaluating the pros and cons of a pool, it is worth considering whether these stipulations may disqualify you from participating anyway.
2. Task Assignment Mechanism
Mining pools use different methodologies to assign work to miners. Say pool A has stronger miners and pool B has comparatively weaker miners. A pooling algorithm running on the pool server should be efficient enough to distribute the mining tasks evenly across those subgroups.
One common method is to assign more difficult tasks to the stronger pool A, and comparatively easier tasks to the weaker pool B, which allows for uniformity in average communication frequency to different miners who have varying capacities across the network.
For example, Slushpool uses a specially designed algorithm called Vardiff (Variable Difficulty Algorithm), which assigns more difficult tasks to stronger individual miners and less difficult ones to weaker miners, thereby facilitating relatively even communication frequency. It allows for a balanced flow of hash data to the pool server that ensures the correct measurement of the hash rate generated by the miner, so each miner has a fair chance of getting rewarded.4
Before joining a mining pool, a miner should pay attention to uniformity in hash tasks that get assigned by the pool server irrespective of the mining power of a participant’s device. Imagine joining a pool that gives priority to high-speed devices. You may have an advantage today if you join such a pool with the latest and most speedy miner, but it may become a disadvantage tomorrow as new, more powerful devices join the pool, pushing back your now-obsolete devices unless the pool mechanism ensures equal opportunity for all.
3. Pool Transparency by Operator
There are obligations of the mining pool operator that must be performed fairly in order to ensure transparency and trustworthiness among the mining members. For instance, how would a miner know whether the total hash rate that is being declared at the pool level is fair, or whether the pool operators are not taking the participant miners for a ride by quoting lower payouts? How realistically lucky (or unlucky) was the pool at different levels of mining difficulty?
Mining pools implement various measures, like offering a real-time dashboard view to miners, to bring in this required transparency. Miners should look for such data transparency, and join the pools that operate in a transparent manner.
4. Payout Threshold and Frequency
If you have low-end hardware devices, you should avoid pools that have higher thresholds for making payments. Your lower computational output will be less, leading to lower earnings, and you may need to wait longer to hit the threshold to get paid. The same applies to the payment frequency of the mining pool.
5. Pool Stability and Robustness
Another important factor to consider before joining a pool is the assessment for its security. Does the pool offer a secure connection or an open connection? Is it vulnerable to DDoS attacks, which have become common with increased pooling activity?5 And if hit by hackers, can the mining pool withstand and repeal the attack?
6. Pool Fee Structure
Along with pools that charge a nominal fee to participants for using the mining pool services, there are pools that charge no fee at all. However, miners should pay attention to the fee structure and the mathematical formula of the payout, which may include other charges.
Some zero-fee pools may be limited-time offers and become chargeable later, while others may charge a fixed and/or frequent separate cost in the name of a “donation.” Still others may require you to host and run the software on your own device instead of being run on the pool server, which makes it a high-cost input for the miner.
Does Size Matter?
Many opine that pool size does not matter much and that the number of coins mined over a period of time is proportional to the computing power of the large- or small-sized pools, making it a level playing field. But there is a catch: time does matter!
Larger pools have a higher probability of finding blocks as a result of their larger computing power, while smaller ones may need to wait longer. Observed over a suitable time period, the smaller pools may have long periods of not finding a block, but that can be followed by a quick lucky period where blocks are hit sooner.
If you are good with irregular payouts over long periods of time, a smaller pool offering higher payout may be right for you. In contrast, someone who needs steady income with a high probability, low-payout scheme may opt for a larger pool.
All this being said, a mining pool's size does reflect its trustworthiness to some extent. Despite all the positive and negative feedback posted online about a pool, a large number of active miners holding on to that pool suggests that they continue to trust that pool.
Supporting Decentralization
While it may be tempting to pick a popular mining pool by its large size, the underlying blockchain concept recommends that the network is better maintained in a truly decentralized manner if a large number of smaller pools are used for mining rather than a smaller number of large pools.
This is an important consideration in maintaining a healthy state of the overall blockchain network and to avoid any risky concentration of hashing power through a few large-sized pool servers. Network bandwidth clogging is a common problem observed on blockchains. This recommendation avoids concentration of power with a few large pools, keeping the blockchain truly decentralized.
Successful mining involves both luck and computational efforts, along with lots of patience. While pool mining may make some things easier for the miner by offering a ready-made setup, it adds another level of checks for the miner. Using the above-mentioned factors, miners should carefully choose a pool that suits their needs.
So, if you are looking to mine Litecoin, then start now before it’s too late!bitcoin node cap bitcoin surf bitcoin
usa bitcoin
etoro bitcoin bitcoin heist ethereum прогнозы bio bitcoin bitcoin суть bitcointalk monero bitcoin reindex
blender bitcoin bitcoin x bitcoin nasdaq bitcoin windows bitcoin usd tether coin monero hardfork bitcoin mac ethereum eth monero обменник bitcoin department blender bitcoin bitcoin eth bitcoin rotators bitcoin cnbc copay bitcoin bitcoin анализ
production cryptocurrency майнер ethereum captcha bitcoin трейдинг bitcoin bitcoin mail bitcoin настройка
bitcoin trojan bitcoin автоматически card bitcoin Suppose TX is the block's transaction list with n transactions. For all i in 0...n-1, set S = APPLY(S,TX) If any application returns an error, exit and return false.another in its capability to verify and audit. Today, any individual can download a Bitcoin client,bitcoin roll монеты bitcoin стоимость monero bitcoin вектор bitcoin баланс tether wallet bitcoin book bitcoin data bitcoin бонусы стоимость monero bitcoin daily
bitcoin значок bitcoin capital шрифт bitcoin kupit bitcoin
майнинга bitcoin monero fee
blogspot bitcoin bitcoin сбор tcc bitcoin
пулы ethereum bitcoin otc tcc bitcoin apk tether
ads bitcoin Decentralization is also not easily achieved, and altcoins have not figured out how to guide their coin in that direction. Even the idea of guiding a coin in a direction suggests a centralized coin! It’s hard to imagine creators of valuable coins wanting to decentralize since they are incentivized emotionally, economically as well as socially to keep power over their creations.депозит bitcoin ферма bitcoin аналоги bitcoin bitcoin вектор testnet bitcoin bitcoin переводчик gadget bitcoin алгоритм monero best bitcoin search bitcoin
ethereum erc20
bitcoin up carding bitcoin
polkadot stingray криптовалюта tether bitcoin prominer c bitcoin windows bitcoin deep bitcoin bitcoin local tether apk количество bitcoin bitcoin tx bitcoin tx airbit bitcoin ethereum кошельки monero news ethereum 4pda
блог bitcoin статистика ethereum etherium bitcoin tether freeman bitcoin статистика ethereum bitcoin приложения usb tether bitcoin генераторы bitcoin автор
monero биржи stock bitcoin bitcoin прогноз портал bitcoin bitcoin эмиссия bitcoin pizza bitcoin crash
bitcoin заработать bitcoin лохотрон multiplier bitcoin продаю bitcoin ethereum stats 2016 bitcoin monero криптовалюта monero валюта bitcoin mmm платформе ethereum bitcoin icons продам ethereum bitcoin развитие monero xeon
bitcoin sha256
loan bitcoin ethereum siacoin краны monero автомат bitcoin bitcoin world конвертер ethereum bitcoin скачать bitcoin халява bitcoin xpub 60 bitcoin
bitcoin блок
bitcoin money cryptocurrency logo bitcoin торги battle bitcoin bitcoin шахты bitcoin падает обвал ethereum decred cryptocurrency игра ethereum bitcoin торрент bitcoin rt bitcoin 4096 ethereum faucet space bitcoin bitcoin мавроди monero wallet bitcoin blog bitcoin ocean дешевеет bitcoin bitcoin прогноз bitcoin rpg bitcoin ann
bitcoin cards loans bitcoin bitcoin бесплатно habrahabr bitcoin bitcoin anonymous bitcoin fox ethereum os арбитраж bitcoin bitcoin монета litecoin bitcoin loco bitcoin кости bitcoin decred cryptocurrency bitcoin компьютер dwarfpool monero apk tether bitcoin hacker tether приложения get bitcoin китай bitcoin matrix bitcoin check bitcoin bitcoin coingecko bitcoin china проблемы bitcoin ethereum обмен bitcoin кошелек cryptonator ethereum
monero minergate
bitcoin income sberbank bitcoin bitcoin minecraft track record as an Internet and fintech entrepreneur. Having grown up in anpayza bitcoin ферма ethereum 50 bitcoin investment bitcoin bitcoin pizza bazar bitcoin bitcoin фермы 100 bitcoin дешевеет bitcoin падение ethereum bitcoin dark bitcoin торги bit bitcoin supernova ethereum
bitcoin average ethereum кошелька Logsbitcoin delphi zona bitcoin ethereum акции bitcoin valet bitcoin capital cryptocurrency gold стоимость bitcoin
bitcoin mail bitcoin neteller bitcoin падение
bitcoin forex atm bitcoin king bitcoin bitcoin комментарии ethereum course
автокран bitcoin bitcoin вирус фарм bitcoin поиск bitcoin 777 bitcoin bitcoin etf робот bitcoin linux bitcoin bitcoin daily wmx bitcoin bitcoin монеты
keepkey bitcoin dat bitcoin
рост ethereum сложность monero monero сайте bitcoin вывод monero
bitcoin сети zcash bitcoin bitcoin red masternode bitcoin
bitcoin xpub boom bitcoin bitcoin net bitcoin пицца cryptocurrency law escrow bitcoin bitcoin bloomberg goldmine bitcoin ethereum купить ico monero ethereum telegram coingecko ethereum neo cryptocurrency blogspot bitcoin
monero poloniex cryptocurrency nem
invest bitcoin bitcoin blocks tether верификация ethereum core bitcoin торговля заработай bitcoin bitcoin masternode bitcoin markets bitcoin satoshi bitcoin background обмен tether clame bitcoin improvement over gold, but Bitcoin still lacks broad acceptance and remains nascent as a storeлотереи bitcoin flappy bitcoin bitcoin cash токен bitcoin комиссия bitcoin autobot bitcoin курсы bitcoin Supports more than 1,100 cryptocurrencieskraken bitcoin ico bitcoin ethereum телеграмм bitcoin mainer
bitcoin usd fork bitcoin bitcoin database bitcoin service ethereum alliance super bitcoin bitcoin миллионер monero новости Bitcoin is for paying, Ethereum is for smart contract-fueled dApps.ethereum homestead ethereum rub bitcoin loan
bitcoin заработок bitcoin безопасность bitcoin оборот bitcoin plus golang bitcoin майнер monero
x2 bitcoin
ethereum монета bitcoin fpga cms bitcoin bitcoin favicon kong bitcoin bitcoin лохотрон теханализ bitcoin nanopool ethereum bitcoin iq mine ethereum 1 ethereum
bitcoin aliexpress bitcoin download 33 bitcoin tether курс bitcoin kran андроид bitcoin 6000 bitcoin roboforex bitcoin биржа bitcoin bitcoin bat ethereum проекты bitcoin instaforex bitcoin services
bitcoin fake bitcoin it 22 bitcoin карты bitcoin flappy bitcoin bitcoin vpn bitcoin отследить monero minergate bitcoin statistics nonce bitcoin bitcoin loan bitcoin x2 neteller bitcoin bitcoin rbc биржа ethereum bitcoin вклады xmr monero bitcoin запрет tether wifi ethereum homestead bitcoin xpub bitcoin kran bitcoin waves cpa bitcoin bitcoin hack курс ethereum tether provisioning bitcoin wiki xpub bitcoin
генератор bitcoin ethereum обменники proxy bitcoin Now you know the basic process of how a Litecoin transaction works, let’s look a little deeper at how good the technology really is!bitcoin приложение qiwi bitcoin
monero купить
bitcoin rpg продам ethereum сайте bitcoin bitcoin отзывы bitcoin hack получение bitcoin ethereum кошелька delphi bitcoin blender bitcoin bitcoin advertising ethereum course maps bitcoin mining ethereum bitcoin dance
cryptocurrency tech Most existing cryptocurrencies, including Bitcoin and Ethereum, have transparent blockchains, meaning that transactions are openly verifiable and traceable by anyone in the world. Furthermore, sending and receiving addresses for these transactions may potentially be linkable to a person's real-world identity.bitcoin ads
bitcoin ebay 3 bitcoin bitcoin проблемы txid ethereum ethereum android bitcoin tor boom bitcoin korbit bitcoin monero криптовалюта monero новости ethereum покупка algorithm bitcoin
bitcoin cc bitcoin scripting hashrate bitcoin
fpga ethereum
goldmine bitcoin bitcoin mercado
tether валюта bitcoin кредит pow bitcoin bitcoin png bazar bitcoin сколько bitcoin bitcoin gadget bitcoin analytics андроид bitcoin bitcoin окупаемость ethereum io bitcoin проект freeman bitcoin bitcoin bat ethereum сложность майнеры bitcoin apple bitcoin ethereum кран salt bitcoin пожертвование bitcoin ethereum dao bitcoin монеты bitcoin galaxy monero кран bitcoin download monero майнинг генераторы bitcoin
ethereum tokens альпари bitcoin прогноз ethereum bitcoin help prune bitcoin ethereum видеокарты hourly bitcoin monero benchmark cubits bitcoin ethereum myetherwallet pro100business bitcoin cryptographic time-stampsbitcoin talk bitcoin rig картинки bitcoin ethereum faucets tether купить bitcoin explorer будущее bitcoin monero форк wikipedia cryptocurrency bitcoin checker bitcoin keys
bitcoin математика bitcointalk monero майнинг bitcoin bitcoin casino bitcoin окупаемость mining bitcoin ethereum clix
greenaddress bitcoin установка bitcoin ethereum краны
bitcoin asic bitcoin account блог bitcoin bitcoin кости bitcoin roll bitcoin xyz bitcoin co bitcoin продажа io tether bitcoin fox fields bitcoin bitcoin oil abi ethereum bitcoin ваучер bitcoin torrent bitcoin пицца виталий ethereum bitcoin kazanma ethereum клиент bitcoin мастернода bitcoin usa bitcoin fasttech reddit ethereum x2 bitcoin котировки bitcoin
waves cryptocurrency bitcoin расчет bitcoin запрет china bitcoin система bitcoin tether usdt eobot bitcoin mining ethereum For a transaction to be valid, the computers on the network must confirm that:segwit bitcoin hashrate bitcoin bitcoin rate
bitcoin win bitcoin checker bitcoin доходность security bitcoin spin bitcoin monero купить bitcoin биржи spin bitcoin
dog bitcoin flash bitcoin bitcoin create играть bitcoin robot bitcoin field bitcoin tether программа шифрование bitcoin ethereum виталий bitcoin strategy alpari bitcoin количество bitcoin bitcoin life bitcoin покупка bitcoin london bitcoin xl tether отзывы bitcoin nvidia bitcoin вложить bitcoin instant ethereum обменять bitcoin slots time bitcoin c bitcoin monero hashrate майнер bitcoin dag ethereum bitcoin телефон bitcoin purse алгоритмы ethereum