Pool mining discussion

Pool mining started to appear in 2010. When you compete against other miners as a solo miner, your proportion of network hashing power may be small. As a result, you may only solve a block perhaps once a month or even once a year (depending on your hashing power). We can only calculate what the expected time to solve a block will be; however, we cannot predict exactly when it will happen.

To smooth out this variance, miners started to organize themselves into pools. In pool mining, a large number of miners work together to solve a block. Once someone in the pool finds a block, the rewards are shared among all miners belonging to the pool. This makes the payout more frequent, albeit smaller, and more predictable.

Mining pools

There is a variety of mining pools, with a variety of strategies. Perhaps the most popular (and fair) is the proportional pool. Here the reward is distributed to miners based on how much work they have contributed. How is a contribution calculated...