What is a mining pool?
A mining pool is a group of miners that combine their hashrate to collectively mine bitcoin blocks.
Why should I use a mining pool?
When mining bitcoin, either at home or hosted with compass, it is important to pick a pool to ensure frequent payouts. While it is not required to mine with a pool, it is highly recommended. Mining with a pool ensures consistent payouts each day and reduces payout risk. An individual who solo mines has a low probability of successfully mining a block within a year. By mining with a pool, individuals will receive daily payouts proportional to the amount of hash they are contributing to the pool.
Choosing a mining pool?
There are a few things to consider when choosing a mining pool:
- Pool Fee - How much does the pool charge to use their pool
- Payout Structure - How are payouts handled for the users
Pool fees usually range between 1% and 5%. These fees are primarily used to cover operating expenses and can be found on the mining pool website.
Payout Structure is how a pool pays out the bitcoin rewards you have mined. Understanding which payout structure you prefer will help in picking a pool to meet your needs. The primary differences to look out for are whether a pool will pay you per block found by the pool or if it will pay you out daily regardless of blocks found. In either case, the rewards should even out over time but the variance risk of mining a block is covered by the miner or the pool.