The role of Bitcoin mining pools and a list of common mining pools

With the rise of digital currency, more and more people are beginning to invest in and participate in digital currency mining. However, as the number of miners increases, it is difficult for a single device or a miner with a small amount of computing power to obtain high block rewards. To solve this problem, mining pools came into being. Mining pools are not restricted by geographical location and unite dispersed miners and mining farm computing power to compete for accounting rights. This joint operation allows mining farms to obtain profits more efficiently while increasing the computing power of the entire network. Through mining pools, miners can share rewards and make it easier to obtain stable income. The emergence of mining pools provides a more sustainable and stable foundation for the development of digital currencies.

In this mechanism, the block rewards generated by mining pool mining will be distributed according to the proportion of computing power contributed by each miner. Simply put, a mining pool is a fully automatic mining platform, that is, a mining machine is connected to the mining pool, and the mining machine provides computing power to the mining pool. A rough introduction is not enough to let you know what the role of a mining pool is? Next, the editor will give you a comprehensive introduction.

What is the function of a mining pool?

The function of the mining pool is to gather scattered and independent computing resources, split and distribute the mining calculation volume through unified software scheduling, and form a powerful virtual miner to increase the stable income of a single miner. , reduce the risk of failure. Mining pools pool the computing power of multiple miners to jointly search for blocks, thereby increasing each miner's chance of obtaining mining rewards. When a single miner mines independently, the probability of digging a new block is low due to fierce competition. , but in a mining pool, rewards are obtained more frequently.

Mining rewards will be distributed based on the computing power contributed by each miner, which means that even if a miner has lower computing power, they still have a chance to receive a certain proportion of the reward without relying entirely on luck and computing power. Mining pools automatically handle the distribution of rewards, reducing the complexity of miners needing to calculate rewards themselves, making it easier for miners to receive the rewards they deserve.

Individual miners may experience fluctuations in rewards during the mining process, sometimes receiving large rewards and sometimes receiving little or no rewards. However, joining a mining pool stabilizes a miner's income, as rewards are regularly distributed to each miner. For individual miners with low computing power, it may take a long time to mine blocks independently, and mining pools can allow these small-scale miners to participate in mining and obtain certain rewards, thereby increasing their mining enthusiasm.

What are the common Bitcoin mining pools?

As mining pools grow, it is not easy to choose a suitable mining pool. Common Bitcoin mining pools can be divided into four types according to their distribution methods: PPS, PPLNS, DGM and PROP. The following is their specific introduction:

1. PPS

Pay-Per-Share (PPS) method pays for each share immediately, which means that miners can get paid immediately without You need to wait for the block to be generated or confirmed, thus reducing the risk. In addition, PPS can also avoid potential manipulation by mining pool operators. In order to solve the problem that the PPLNS model has high returns at certain times and no returns at other times, PPS adopts a new algorithm. It estimates the minerals that the mining pool can obtain every day based on the proportion of miners' computing power in the mining pool, thereby providing users with basically stable daily income.

2. PPLNS

(The purest team mining) The luck component of this model is very important. "Income will be paid based on the past N shares", which means that all Once the miners discover a block, everyone will contribute according to their own contribution, but this kind of mining pool has a certain lag inertia. If the mining pool cannot discover a block at the end of the day, then everyone will not have any income that day. The income will not be distributed until the participating blocks are completely mined, and there will be a certain delay in mining income. If you no longer use the PPLNS mining pool for mining, assuming that the contributed shares are still there, you will still receive dividends for a period of time until the contributed shares are settled.

3, DGM

Double Geometric Method The double geometric method combines PPLNS and geometric reward types, allowing mining pool operators to avoid part of the risk. Mining pool operators receive part of the shipment in the short term The block reward is then returned to the miners in a normalized value.

4, PROP

The generation of Bitcoin blocks is when the mining pool discovers the block and broadcasts it to the entire network. After 120 confirmations, the block will be generated.

The difference from pps mining is that in pps mode, the mining pool’s coins must come from the real block generation. Before the real block is generated, every time the miner contributes a bit of speed, the mining pool will pay in advance. The miners. The PROP mode is that after the mining pool generates the real block after 120 confirmations, the Bitcoins will be distributed to the miners according to each miner's contribution.

I hope that through all the above content, everyone can understand what the role of a mining pool is. Relatively speaking, pool mining has the advantages of higher stability, lower risks, higher returns, and better community and support. Therefore, for novice miners and small miners, choosing mining pool mining can better improve mining efficiency and profits, reduce risks and costs, and obtain better mining experience and technical support. It should be noted that when choosing a mining pool, you should choose a mining pool with a good reputation, a long operating time, and stable computing power. Try to avoid choosing a small or unknown mining pool to avoid mining risks and unstable returns. At the same time, it is necessary to rationally allocate mining machine resources, control mining costs, and choose appropriate mining strategies to achieve maximum benefits and value.

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