What is a Mining Pool and What Are It’s Benefits?
Mining pools are increasing in popularity not only to save on costs but also to increase one’s chances for mining rewards. People started using them after individual mining became less profitable and required more upfront costs. But what is a mining pool exactly?
What is a mining pool?
A mining pool is a large collection of nodes (computers) that work together in mining a certain cryptocurrency.
How does a mining pool work?
A mining pool works similar to individual mining, only uses a collection of nodes instead of one single node. Together, these nodes achieve a higher hash rate.
Miners, who share their processing power over a network, use this type of mining by uniting their resources as well as the eventual reward equally, depending on the amount of work they contributed to the probability of completing the last transaction on a block.
Due to the high hash rate achieved from the nodes that participate in the mining pool, there is a higher probability of receiving mining rewards from each confirmed transaction block.
As such, mining rewards are easier to obtain, but smaller in size since they have to be spread with the members of the network.
Which are the biggest mining pools?
Currently, for Bitcoin, the biggest mining pools that receive the highest consequent rewards are the following:
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