⛏️ Mining Pools: Combining Hashpower for Rewards
Learn why solo miners join pools to get consistent payouts
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0 / 5 completedUnderstanding Mining Pools
Mining pools allow miners to combine their computational power and share rewards. This collaborative approach reduces variance but introduces new dynamics and trade-offs.
What is a Mining Pool?
A mining pool is a group of miners who combine their computational resources to increase their chances of finding blocks. When the pool finds a block, the reward is distributed among participants based on their contributed hashrate. This transforms mining from a high-variance lottery into a more predictable income stream.
Mining Strategy Comparison
Compare different mining approaches to understand the trade-offs between variance, income stability, and decentralization.
Solo Mining
Mining alone with your own hardware. Only viable for networks with very low difficulty.
- •Keep full block reward
- •Complete independence
- •No pool fees
- •Astronomical variance
- •May never find a block
- •Not economically viable
Why Pools Exist
Reduce Variance
Solo mining is like playing the lottery. Pools provide steady, predictable income by distributing rewards frequently based on contributed work.
Economic Viability
Small miners can't compete solo anymore. Pools make mining economically feasible for hobbyists and small operations by guaranteeing returns.
The Centralization Trade-off
While pools help small miners participate, large pools controlling significant hashrate pose centralization risks to the network.