But before explaining in more depth the principle and the usefulness of a mining pool, let's review the basics.
Reminder: What is crypto-currency mining ?
Crypto-currency mining is an activity that may seem obscure at first glance. However, it has a primordial role in the existence and durability of a blockchain as well as its crypto-currency.
Indeed, when a blockchain has to verify a transaction, it needs solid proof to ensure the validity of the transaction. This verification is then done using decentralized machines, which are owned by miners. When these machines verify and validate a transaction, also called a block (hence the word blockchain), the miners receive a reward, in crypto-currency, for their work.
In order to ensure the tangibility of the transaction, the machines do a very complex job of obtaining proof, known as Proof-of-Work (PoW). So you will have understood that it is thanks to the proof of work done by the miners that blockchains such as Ethereum or Bitcoin can work.
The usefulness of a mining pool ?
When miners connect to a mining pool, they come together as a cooperative. This allows the miners to get a lot more crypto-currencies. This association is much more prolific and profitable than if you mine alone. Indeed, it is difficult, if not impossible, to earn mining revenues alone, as it is so complex to validate a transaction, a block, when you have little hash power. It goes without saying that to have a much better profitability, you have to connect to a mining pool.
Bringing the miners together in a mining pool allows you to have more hash power than you can have alone with your machines. This combined power allows you to validate many more transactions and therefore, more blocks. And, since each validation is paid for, the miner pool generates much more crypto-currencies. The latter will share the gains with the miners while taking a small commission (from 1% to 3%), which allows to have a more important and stable remuneration.
The emergence of mining pools
Over the years, Bitcoin has grown in popularity and quickly the number of people interested in its operation naturally became interested in mining. At this time, we are in the early 2010's, it is still possible to mine several Bitcoins using one's personal PC. But the mining boom will make it evolve, new machines will appear, bigger mining farms will be built, more powerful GPUs will be used,...
These developments have made it very difficult, if not impossible, for individual miners to find a block by mining in its corner. That's when SlushPool was born, the first mining pool that will bring crypto-currency mining into a new era.
The different methods of payment for a mining pool ?
PPS - Pay Per Share
It is a fairly simple method of payment. Miners are paid for each validated share. The mining pool then pays a small amount to thank the miners for validating a share. Note that you will always be paid with the PPS payment method, no matter if the mining pool finds a block or not.
FPPS / PPS+ - Full Pay Per Share / Pay Per Share +
Full Pay Per Share (or Pay Per Share +) is a payment method similar to regular Pay Per Share. The one and only difference is that the mining pool also pays the transactions fee that are included if a block is found. Transactions fee are a small but necessary fee when issuing a transaction.
PPLNS - Pay Per Last N Share
The Pay Per Last N Share system rewards miners once a block has been found by the mining pool. You will therefore only be paid once that block is found. It is important to know that you will lose your compensation if you disconnect from the mining pool before the block is found.
The issue of centralization of mining pools
For those of you who are more advanced on the subject, you have certainly already heard this issue around the centralization of mining pools. By nature and by vision, the blockchain is intended to be decentralized, without a central control body. In this system, as you will have understood, the mining pool acts as a sort of central body for a group of miners.
The activity of crypto-currency mining has developed considerably over the last few years, giving rise to real mastodons of the sector, sometimes pointed at because their field of action is considered too vast. For example, Bitmain, Asics' leading production company, is also behind the two main bitcoin mining pools (BTC.com and Antpool).
Essential players in the ecosystem
Nevertheless, in the current functioning of mining, mining pools are indispensable players that still allow anyone to mine, from anywhere and with any available power.
Our partner : Cruxpool
At Meria, we chose to work with the Cruxpool mining pool for the Ethereum mining. Cruxpool is a French company that shares our values and vision. It was therefore natural that this collaboration was created.
Cruxpool offers to mine Ethereum and Ethereum Classic. Thanks to its PPS+ payment system, your revenues will be stable and prolific. In addition, Cruxpool provides 24/7 monitoring and support to ensure you have the best mining experience possible, where other pools do not have the same responsiveness. The team responds to you in French and with a very high availability.