Mining Pools: Complete Guide
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What is a mining pool?
Mining pools contain a number of miners, who share their resources with each other so as to successfully mine a block. With an increase in the difficulty of the cryptocurrency mining, the processing power that is needed to mine a block also goes up. Due to this reason, individual miners often find it difficult to mine as they do not own an industrial grade setup. Hence, mining pools make it extremely convenient for people who do not have the necessary resources to mine individually.
Since the resources are shared amongst individuals, the reward of successfully mining a block also ends up being shared among the individuals. The share depends on the amount of computational power that each user contributes.
What are mining pools fees?
Usually, all mining pools happen to charge the users for making use of the server. This fee is charged by the person who hosts the mining pool server. The primary reason why there exists a mining pool fee is that the server constantly needs maintenance, which adds up to the server costs.
The fee is usually cut as a small percentage of the share of the reward that miners earn, whenever a successful transaction occurs. The amount of fee that each mining pool charges vary. Hence, one must conduct proper research regarding such factors before choosing a mining pool.
What to check before joining a mining pool
It could be helpful to check some important factors before joining a mining pool. Many beginners do not happen to know these factors. Even though they do learn the importance of considering such factors over time, it is always better to know them before starting out.
Here is a list of all the important factors to consider before joining a mining pool:
- Fees: Each mining pool has a server maintenance fee, which is charged from the users. It is charged in the form of a small percentage which is automatically cut from the user’s share of rewards.
- Security: The security of the server on which a mining pool is hosted should be of prime importance. This is because a secure mining pool server would be impenetrable by external sources and hackers. Furthermore, a glitch-free server will make sure that you will get your well-deserved share of rewards.
- Payouts: Most mining pools tend to pay the users for their share from within the pool’s existing balance. This ensures that a user can receive their share immediately without waiting. Consider the payout policies of different mining pools before settling with one, as it varies.
- Reputation: This is perhaps the most important factor. A mining pool that has a good reputation and without a doubt, ought to be a good one. You can learn about the reputations of various mining pools on various mining pool forums on the internet. Just do not hesitate to give it a good search.
- Private or not: While some mining pools are privately owned, and are open only to a limited number of people, other mining pools take in new members. As a beginner, until you’ve formed connections/relations with other miners on the internet, your best shot is to join a mining pool that is not private.
- Pool size: The mining pool’s size is yet another factor that you must consider. A pool with a larger size means that it hosts a greater number of miners, which reduces the share of rewards significantly. A very large mining pool is suitable for those users who are only able to provide a small fraction of the overall computational power. Though, it decreases the profitability.
Biggest mining pools
As far as bitcoin mining is concerned, there are a huge number of mining pools that exist out there.
We have compiled a list of the most popular mining pools for you below:
Antpool: Antpool is a large mining pool that is operated by Bitmain Tech Ltd. Their server is located in Asia, and they charge an average mining fee of 2.4% on successful transactions. As far as its reputation goes, it is quite average as they are often said to experience server maintenance issues due to which payments sometimes get delayed to as long as 8 days.
BTC.top: BTC.top is a privately owned mining pool. This means that it is open only to a specific people, and hence new users are not welcomed.
BTC.com: BTC.com mining pool gets operated by Bitmain Tech, which is the same company that runs Antpool. They charge an average transaction fee of 1.5% and the users get paid through a PPS system. Their servers are located in Asia and USA, with an overall satisfactory reputation.
BIXIN: Bixin is a large mining pool that is operated in China. Hence, it is recommended only for those users who know how to speak Chinese. They offer quite competitive fee rates though, that varies. Moreover, they offer a same day payout policy in which the miners get their wallets filled with their rewards within 24 hours. As far as reputation goes, Bixin is definitely one of the most highly-reputed mining pools out there.
F2pool: F2Pool, which is also referred to as the Discus Fish is a mining pool that has its servers in China. It allows users to mine Bitcoin, Litecoin, and Ethereum. The average transaction fee that it charges is 4.6% to its users. As far as reputation goes, it has quite a good reputation but not as well as Bixin.
Slush: Slush Pool is one of the first mining pools that were made available to the public. It allows miners to mine Bitcoins and ZEC. It is one of the well-established mining pools that charge a small transaction fee of 2% for BTC, while there is no fee for mining ZEC. As far as its reputation goes, it is considered to be the best mining pool for beginners. However, it is not suitable for intermediate miners and experienced ones.
China and mining pools
You might have noticed how many mining pools have their servers set up in China. Well, a surprising fact would be that China controls more than 70% of the Bitcoin’s overall hash rate.
Firstly, this is because China is the leading manufacturer of the world’s best mining equipment. Secondly, the electricity costs in China are very cheap. This allows miners in China to make a great profit from mining without having to deal with exceptionally high mining costs.
Another reason would be that China owns massive coal reserves in excess. Hence, they can easily burn the coal and direct the energy generated towards mining bitcoin.
How to join a mining pool?
For the sake of this guide, we will choose to proceed with Antpool.
- Open the official website for antpool.
- Register for an account and a password.
- After you have logged in, you will see a dialog box opened. In the dialog box, put in the name of the miner. We also refer to it as a sub-account.
- Then put in the background Antminer ID and the input ID. You will see a dialog box for authentication. Verify it.
- Then enter the miner address and set up your mining pool. At one time, you can set up around 3 mining pools. Out of these, two of them will be in backup and one will be the main one.
- Once done, you can begin mining as part of the mining pool!
Mining pool vs cloud mining
In cloud mining, you can generate Bitcoins and other alternative cryptocurrency tokens without actually having a mining equipment. This is done by paying for the hash rate involved, and then based on the amount of power that you’ve paid for, you get your share of the rewards. The processing power is bought from companies that have the high-performance equipment.
In comparison to cloud mining, a mining pool requires you to own your own equipment using which you will provide a part of the overall processing power to the mining pool.
The only significant benefit of using a mining cloud is that you do not necessarily have to buy any equipment. You just have to pay for the hash-rate and leave the rest upon the company.
At the same time, an obvious disadvantage is that mining clouds are not very profitable in the long run as they prevent you from having your own equipment which can be more rewarding and profitable.
Mining pools are, without a doubt, an excellent option for those miners who do not own an industrial level setup. This is especially helpful when mining of difficult cryptocurrencies are involved, such as Bitcoins and Ethereum.
We hope to have provided you all the information that you were looking for. For more news, information, and trends related to the crypto market feel free to check out the other sections on our website!