What is Mining?
We all know about that Bitcoin is created by Mining. A quick recap for the people with the memory of a goldfish, Bitcoin mining is similar to gold mining. But here in Bitcoin mining, the miners use computers and special programs to compete with other miners in solving complicated mathematical problems. This will help verify and add transactions to the public ledger.
Now not many people may be able to afford to mine by themselves, several corporations are the ones that do the mining since it’s become more expensive. However since Bitcoin has characteristics to encourage any individual get in the action, mining pools were created.
A mining pool allows users who are not capable to mine individually to share the block rewards depending on the mining hash power they contribute.
The most important question is should you mine solo or join a mining pool?
Solo Mining or Pooled Mining?
Both have its advantages and disadvantages. If you mine solo, you reap all the benefits but you end up mining much less. If you mine using a mining pool, the benefits are shared amongst the miner’s part of the pool but the chances of solving a block and winning a major reward are higher.
If you are more of a steady less risk-taking investor then joining a mining pool is the right option. No one party owns more than 50% of the cryptocurrency’s mining pool and hence gives equal chance to members of the pool.
Bitcoin’s supply is now slowly reducing and is at a bit more than 80%. This means that it is more difficult to make a profit mining; unless investment costs for the best in technology and running costs for 24/7 electricity including air-conditioning is able to be born by you.
The next question is which mining pool should you join?
Joining a Mining Pool
Evaluate all the options of mining pools. (Below we share the best Bitcoin Mining Pools). You need to analyze the amount that is distributed after the mine is successful and the fees that is deducted. Of course, you join the one with the most encouraging profits and return on investments.
What calculates the total profit from the shares is the number of shares a miner has in a particular pool. It all depends on the difficulty level of the blockchain mine being solved, and so the proof of work shows how much is contributed from the user’s processing power.
What to look out for when picking a mining pool?
Size: The bigger the pool the more regular the payment with lower payouts. While the smaller the pool the less frequent the payout but with higher payouts.
Reward Method: The reward types vary accordingly:
Pay-per-Share (PPS): Everytime a share submits, a user is paid X amount.
Proportional: More the shares, more the pay!
Score based: Depends on the time of share.
Pay Per Last N Shares (PPLNS): Similar to proportional, but each share can be rewarded on multiple rounds.
Fees: Some mining pools are completely free while some charge from 3% to 10%. It all depends on which mining pool you feel suits your needs, and how much you are ready to shell out for their services.
Keep an eye out on security, how easy it is to deposit and withdraw and the functionality and user interface.
How easy is it to start mining in a pool?
All you need to do is pick a mining pool best suited for amongst the list below, and sign up.
After signing up and going through the entire process of registration you need to create a ‘worker’ which will be for each mining hardware you want to utilize. These workers will be assigned a number as their name and x’s as their password.
But before you get started, here is a chart depicting the share percentage of all the Bitcoin mining pools.
Best Bitcoin Mining Pools
1. Slush Pool
The mining pool that started it all. It was in full flow in 2010 and started the emergence of the Bitcoin mining pools. It is run by Satoshi Labs, and based in the Czech Republic.
Slush Pool is a medium sized pool, of 7% of the network hash rate. There is a fee of 2% for every transaction shared with the miners. A user-friendly service that is worth the fees, with not only Bitcoin but also Zcash being able to be mined.
Score based and so there s no chance of frauds or cheating occurring. Given the positives, people should think of the fee as a payment for such a good service provided.
A Chinese based Bitcoin mining pool operated by Bitmain Technologies. T is the biggest Bitcoin mining pool with around 22% of the network hash rate.
Something unique about this Bitcoin Mining Pool is the choice between PPLNS which has 0% fees and PPS which has 2.5% fees.
A nicely arranged dashboard with details such as earnings and hash rates, with a variety of security options such as two-factor authentication and email alerts.
It is a large mining pool and hence payouts are large, but it has plenty of advantages which is quite apparent with it being the biggest Bitcoin mining pool.
The most notable pool with an interesting rewards system. Already known for its perfect Bitcoin wallet and blockchain explorer it runs one of the most popular mining pools.
An overall of 20% on overall global hash power, located both in the EU (Germany) and China. Bitcoin and Bitcoin Cash are both supported.
The interesting part which brings users flocking into BTC.com is its reward system. The reward system is known as FPPS (Full Pay Per Share). How FPPS is calculated is something very unique and should be noted for users to understand.
The standard transaction fee within a given period is added to the block reward which is 12.5 BTC and this is then distributed as a whole to the miners similar to Payment Per Share (PPS). Sharing transaction fees, if its high is what is catchy for miners.
The only issue is, it’s not very user-friendly when it comes to beginners trying to mine in Bitcoin Pools at BTC.com. It’s more for the mediocre and experienced miners who have used Bitcoin Pools before.
The Chinese are famous for Bitcoin mining pools, the most famous being F2Pool. Opened in 2013, it currently holds the second largest Bitcoin mining pool with 14% of network hash rate.
F2Pool has a high fee of 4%. Whether it is due to the Chinese conversion into English or the mining of several cryptocurrencies such as Litecoin(LTC), Ethereum (ETH) and Zcash(ZEC) is not known.
It is perfect for a person who believes in a Chinese platform, where there are several miners along with you and is ready to pay the 4% fees.
If you’re impatient and hate filling registrations, Eligius is just perfect! An American based Bitcoin mining pool and one of the first ones started in 2011. It has control of under 1% of the network hash rate making is very small.
Due to its low network hash rate, there are no fees and users receive 100% of the block reward including the transaction fees. IT is based on PPS reward with a minimum of 0.04 BTC. Therefore a proper amount of hashing power will need to be provided for the return to start flowing.
It is for the users, who have strong hashing power capabilities and are in the mindset of not allowing a single transaction profit to go into someone else’s pocket including even the transaction fees.
Founded in 2014, KanoPool is a medium sized Bitcoin mining pool. It has a 3% network hash rate, with mine of two to three blocks per day.
A structure of payments in Pay Per Last N Share Model with a 0.9 fee with shared transaction fees rewarded.
There is no merged mining but mining only on a particular pool. Therefore payout keeps being received in small, frequent payments from the mining carried out.
A very simple pool but not very user-friendly with no added security feature. It offers regular payouts which is a good deal for people who require regular income for their expenses.
So which is the Best Bitcoin Mining Pool?
With Bitcoins becoming ever so popular, with investors and traders the mining is also growing. Not many can afford mining at home, and so Bitcoin Mining pools are slowly becoming the new way of entering the mining world.
It also better chance of getting a worthwhile amount for your hashrate. Similar to the lottery, if a group of people buys a lottery ticket, everyone will be rewarded for the amount invested.
In a nutshell, a mining pool takes the pool members hashes, looks for block rewards, records the work all the participants are doing and assigning block rewards proportionally to participants.
Moreover, I would recommend joining AntPool or BTC.com as these are the two most reliable and highest share mining pools in the market.
I hope you liked this article and if you are willing to mine Ethereum, you must go through our other article which is about the top Ethereum mining pools.