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.
There are numerous miner reward systems: PPS, PROP, PPLNS, PPLNT, and many more.
Mining pools may contain hundreds or thousands of miners using specialized protocols.
The Pay-per-Share (PPS) approach offers an instant, guaranteed payout to a miner for their contribution to the probability that the pool finds a block.
Miners are paid out from the pool's existing balance and can withdraw their payout immediately.
This model allows for the least possible variance in payment for miners while also transferring much of the risk to the pool's operator.
Miners earn shares until the pool finds a block (the end of the mining round).
A new round starts the moment the pool solves a block and miners are rewarded Proportional to the shares submitted.
The entire reward in a solo pool goes to the miner who finds the block.
Once a share block reaches the network target, it is transmitted and merged onto the blockchain.
Miners are rewarded when this occurs proportional to the shares submitted prior to the target block.
A P2Pool requires the miners to run a full node, bearing the weight of hardware expenses and network bandwidth.
[citation needed] Multipools switch between different altcoins and constantly calculate which coin is at that moment the most profitable to mine.
Two key factors are involved in the algorithm that calculates profitability, the block time, and the price on the exchanges.
[8] Some companies that sell hash power may do so by aggregating the work of many small miners (for example, NiceHash), paying them proportionally by share like a pool would.
Similar to other mining technologies, the PoC, PoC+, PoS Proof of Space method allows the computing to be performed beforehand and all answers are stored on a miners hard drive, the heavy energy consumption for PoC is not required like it is for PoW mining and therefore PoC is almost always a more environmentally friendly blockchain choice.
When mining happens the miner simply "looks" through the pre-stored answers and submits the best one found to the network, with minimal energy used to read the hard drives.