Bitcoin mining is one of the most important topics in the blockchain world. The persons responsible for producing crypto money through hardware and software and recording and confirming crypto money transfers are called miners, and all their transactions are called mining. One of the most common terms we come across in this world is mining pool.
What is a mining pool?
ASICs, which are seen as the most important part of mining, are actually not enough on their own. A single miner cannot earn a good income from the transactions he makes in return for the energy rate he spends. To make this more efficient, mining pools are created. Collaboration of 10 miners is defined as a mining pool. To give a clearer example; If Bitcoin mining is an ocean, miners working as a team are also a pool.
How do mining pools work?
There is a coordinator at the head of the teams that create the mining pools and gives them different nonce values so that the miners do not work in the same blocks. The nonce value represents random numbers that miners express as counters. Accordingly, the rewards to be received by the miners can be determined and this is managed by the coordinator. There are two methods that coordinators commonly use: PPS (pay per share) and PPLNS (pay per last N shares).
What is PPS?
Payment per share, PPS is the most preferred pool method. In this method; To determine the working power of each miner in the pool, hash values called numerators are taken into account. Payment is made for each share and this accumulates over time.
What is PPLNS?
The most preferred method after PPS is PPLNS. In this, miners are rewarded after completing the process of mining a block within the pool. Depending on the size of the detected block in the pool, the last N shares are checked and the reward is determined.