What Are Bitcoin Mining Pools?

Bitcoin mining pools are seem to be the only solution for the average solo miners to make a profit mining

0 474

To fully understand mining, it’s important first to understand how the Bitcoin blockchain works.

All Bitcoin transaction history is recorded in the blockchain. The blockchain is a ‘collection’ of blocks. Blocks are linear, time-stamped series of bundled transactions.

In other words, the blockchain is a public ledger. This ledger is decentralized, continually updated and freely shared.

 

Why Join A Bitcoin Mining Pool?

 

Bitcoin’s system is working thanks to miners. The miners are responsible to secure the network and processing every single Bitcoin transaction. In order to achieve this, they solve a complex mathematical problem that allows them to chain together blocks of transactions, the well known as blockchain. In addition for their service, miners are awarded Bitcoins.

Furthermore, in Bitcoin’s current level, the difficulty is so high that it’s practically impossible for solo miners to make a profit through mining. So it’s better for miners to join a mining pool.

Mining pools are groups of cooperating miners. They accept to share rewards of solved blocks according to their contribution of their mining hash power.

Also mining pools are suitable to the average miner as they earn rewards and are more predictable. Unfortunately, they concentrate power to the mining pool’s owner.

Although, miners can redirect their hashing power to a different mining pool at any time they want.

This pie chart displays the biggest Bitcoin mining pools:

Bitcoin mining pools

It is estimated that Chinese mining pools control about 81 percent of the network hash rate:

For more news about the blockchain industry, check previous posts on cryptona.

You might also like
Comments
Loading...