Mining pool

In the context of cryptocurrency mining, a mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block. A "share" is awarded to members of the mining pool who present a valid partial proof-of-work. Mining in pools began when the difficulty for mining increased to the point where it could take centuries for slower miners to generate a block. The solution to this problem was for miners to pool their resources so they could generate blocks more quickly and therefore receive a portion of the block reward on a consistent basis, rather than randomly once every few years.

• November 2010: Slush launched[when?] the first mining pool[citation needed]
• 2011–2013: The era of deepbit, which at its peak, shares up to 45% of the network hashrate[citation needed]
• 2013–2014: Since the introduction of ASIC, and when deepbit failed to support the newer stratum protocol, GHash.IO replaced deepbit and became the largest
• 2014–2015: Rise of China. F2Pool which launched in May 2013, replaced GHash.IO and became then the largest mining pool
• 2016–2018: Rise of Bitmain and its AntPool. Bitmain also controls a few other smaller pools like BTC.com and ViaBTC
• 2019–2020: The launch of Poolin. Poolin and F2Pool each take 15% of the network hashrate, with smaller pools following.[citation needed]
• 2020: Binance launches a mining pool following Huobi and OKex. Luxor launches a US-based mining pool.[citation needed]

Share is the principal concept of the mining pool operation. Share is a potential block solution. So it may be a block solution, but it is not necessarily so. For example, suppose a block solution is a number that ends with 10 zeros and, a share may be a number with 5 zeros at the end. Sooner or later one of the shares will have not only 5, but 10 zeros at the end, and this will be the block solution.

Mining pools need shares to estimate the miner's contribution to the work performed by the pool to find a block. There are numerous miner reward systems: PPS, PROP, PPLNS, PPLNT, and many more.

Mining pool methods

Mining pools may contain hundreds or thousands of miners using specialized protocols.[4] In all these schemes B stands for a block reward minus pool fee and p is a probability of finding a block in a share attempt p=1/D, where D is current block difficulty). A pool can support "variable share difficulty" feature, which means that a miner can select the share target (the lower bound of share difficulty) on their own and change {\displaystyle p}p accordingly.