Mining Pool
A mining pool is a server that adds up the hashrate of many miners, hunts for blocks with the combined power, and splits the reward among the members.
What a pool is and why it exists
A block is found by one party, and that party takes the whole reward. An asic at 200 TH/s in a network around 950 EH/s would find its block once every ninety years on average. Nobody is ready to wait decades for a lottery ticket, so asics team up: thousands of members search together and split the reward by contribution.
Here is how it works. The pool hands the miner a job and tells it what difficulty of solutions to send back. The asic grinds away, finds solutions of that lowered difficulty, and sends them in; those are the shares. By the share count the pool knows how much you have worked. When one of the members hits a block, the pool spreads the reward across everyone.
Then the differences between pools begin: how to count the contribution and when to pay. Hence the three schemes you will see in the interface: PPS pays a fixed rate for every share, FPPS adds a cut of the block fees on top, PPLNS counts your part of the last N shares and therefore punishes anyone who hops between pools. On Bitcoin the most common scheme is FPPS.
The pool fee usually runs from 1 to 4 percent, and FPPS charges more than PPLNS: the pool takes on the risk of unlucky days. Also look at the minimum payout and where the server sits. From Spain it makes sense to connect to a European endpoint rather than an American one: less latency, fewer stale shares.
The short version in a table
| What it does | combines hashrate and splits the reward |
| Protocol | Stratum, some pools already run V2 |
| Fee | usually 1 to 4 percent |
| Payout schemes | PPS, FPPS, PPLNS |
| What it needs from you | wallet address, worker name, server address |
How the miner works with a pool
The miner's settings have three fields: pool address, worker, and a password that most pools never check. The usual setup is three addresses in a row: the main one and two backups. If the first stops answering, the asic switches over on its own and you do not lose a night of downtime.
The worker name is how you will tell your asics apart in the stats later. Use something readable, like a shelf number: with twenty asics, hunting for the one that dropped off by serial number is misery.
The pool does not show the same hashrate as the miner. It averages and only sees the shares that made it through, so its number usually sits a percent or two lower. And keep the averaging window in mind: the five-minute value jumps around, judge the asic by the daily one.
Before the first launch, check two boring things. First the minimum payout: if it is set high, the money from a single asic arrives not at the end of the day but a week later, and that is not a pool error. Second the wallet address: payouts go wherever you typed it, and a transfer cannot be undone. We suggest running one small payout first, and only then pointing the rest of the asics at the same address.
An example on a real asic
Take the same Antminer S21: 200 TH/s, 3500 W. Solo that is a block once every ninety years; in a pool it is a steady daily payout proportional to the 200 terahashes. The amount depends on hashprice and on the scheme, not on luck.
One honest downside: with FPPS the pool keeps its percentage every day, no matter how its block luck went. In a bad week you still get the calculated payout, in a good week the pool takes more than yours. That is the price of predictability, and it suits almost everyone running one or two asics.
Related terms
Where to go next on the site
Deep Dives
- Mining Pools: The Full Breakdown knowledge base
Hardware
- Antminer S21 tool
- Antminer L7 tool
Algorithms
Coins
Questions and answers
Can you mine without a pool
Technically yes, even stock firmware supports solo mode. But one asic at 200 TH/s finds a block once every ninety years on average, so that is a bet on luck, not a source of income.
Which payout scheme pays better
Over a long stretch the gap between FPPS and PPLNS is small. FPPS gives a steady income and charges a bigger percentage for it, PPLNS pays slightly more if you stay on one pool for months.
How much does a pool charge
Usually 1 to 4 percent of the payout. Check the minimum withdrawal separately: on some pools it is set so that a single asic gets paid once every few days.
Why does the worker show offline while the asic is running
Most of the time it is the network: internet down, a switch died, someone changed the router settings. Less often it is a wrong pool address after a firmware change. Start with a ping to the pool server from the same network.
Do I need my own wallet or is an exchange address enough
Technically any address that accepts payouts will do. But an exchange address can change or stop accepting small amounts, so your own wallet is safer, with withdrawals from there.
How the terms connect
Every link in the chain is clickable. Orange marks where you are now.
Looking for an ASIC miner
The catalog holds 212 models. You can compare them by hashrate and by joules per terahash, then plug your own rate into the calculator and see what stays in your pocket.
Page written and checked by Denys Klimchuk. Updated .