Crypto glossary
Mining pool
A mining pool is a group of miners who combine their hashing power to find blocks more often and split the rewards in proportion to the work each contributed.
Finding a Bitcoin block alone with a few machines can take years, so most miners join a pool. The pool operator coordinates the work and assigns each participant easier sub-tasks, called shares, which prove how much effort they contribute. When anyone in the pool finds a block, the reward is divided among members according to their shares, minus a fee.
Pools use different payout schemes. Pay-per-share models pay a fixed amount for each share and the operator absorbs the luck, while PPLNS pays only when blocks are found. Large pools such as Foundry USA and AntPool produce a big share of Bitcoin blocks, which analysts track as a measure of centralization.
Pools smooth income but concentrate influence, because the operator usually chooses which transactions go into blocks. In 2014 GHash.io briefly approached half of Bitcoin's hashrate, prompting miners to leave. Choosing a pool means weighing fees, payout method, reliability and transparency.
Example
A miner contributing 0.001% of a pool's hashrate earns about 0.001% of every block the pool finds, receiving a small but steady payout instead of a rare 3.125 BTC jackpot.
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