Mining is a complex and labour-intensive process that underpins the existence of all cryptocurrencies operating on the Proof of Work (PoW) consensus mechanism. Thanks to miners, new digital assets are created, and transactions can be conducted with existing ones.
One of the popular ways to mine cryptocurrency is through mining pools. Let’s explain what these groups are, how they work, and why they are needed.
Basics of Mining Pools
Let’s begin with a definition. A mining pool is a group of cryptocurrency miners who combine their computational power to increase the likelihood of successfully solving a block and receiving the reward. Instead of mining solo, pool participants share resources (computational power) to solve the complex algorithms needed to verify the blockchain more quickly. When the pool successfully solves a block, the reward is distributed among the participants according to their contributions.
To earn more from mining, users combine the computational power of their devices. This increases the chances of receiving a reward, which is subsequently distributed among all participants.
Platforms for pooling miners’ computational power are called pools. Unfortunately, not all platforms offer truly beneficial working conditions. Some hide their fees, while others make it difficult to withdraw earned funds.
Types of Mining Pools and Reward Distribution Schemes
Let’s take a look at cryptocurrency mining pools based on how they distribute rewards among participants. After all, reward distribution is what concerns miners the most.
Proportional Scheme
The proportional scheme is one of the simplest and most common reward distribution models. In this case, each miner receives a share of the reward based on how much computational power they contributed to solving the block. The more hashes a miner provides, the larger their share of the reward.
For example, if a miner contributes 10% of the pool’s total computational power and the pool solves a block, they will receive 10% of the reward. This system is straightforward and ensures that miners are paid in proportion to their contribution.
Pay-per-Share (PPS), Full-Pay-Per-Share (FPPS), and Pay-Per-Last-N-Shares (PPLNS)
These reward distribution schemes offer more stable and predictable payouts. Here’s a brief overview:
1. PPS (Pay-per-Share). In the PPS model, miners receive a fixed payment for each share they contribute, regardless of whether the pool solves a block or not. This ensures stable payouts, but miners are charged higher fees for the service.
2. FPPS (Full-Pay-Per-Share). FPPS is similar to PPS but also includes transaction fees that were part of the block. This guarantees that miners receive payouts not only for the block reward but also for transaction fees included in the block.
3. PPLNS (Pay-Per-Last-N-Shares). In the PPLNS model, miners are rewarded based on how many shares they provided over the last “N” blocks. This system is more complex but can be more profitable in the long run, although payouts will be less stable.
Decentralised Mining Pools (Peer-to-Peer Pools)
Decentralised mining pools are those that eliminate intermediaries (pool operators) and allow miners to connect directly with each other. These pools often operate on peer-to-peer networks, where miners can combine their resources without having to trust a central organiser. While such pools offer lower fees and more control, they require more advanced technical knowledge to set up and manage.
Advantages and Disadvantages of Joining a Mining Pool
Joining a mining pool has its pros and cons. Let’s take a look at the main advantages and disadvantages.
Advantages
1. Steady Income. One of the main reasons miners join pools is for predictable and stable payouts. Unlike solo mining, where rewards might be scarce for extended periods, payouts in a pool happen more frequently, as blocks are solved collectively.
2. Reduced Risks. Solo mining can be risky, especially if you don't have the most powerful hardware or you're mining in a highly competitive network. In a pool, risks are shared among all participants, which reduces the likelihood of prolonged inactivity.
3. Access to High Resources. In a pool, miners can combine their resources, increasing the overall computational power. This allows even small miners to compete with large mining farms.
Disadvantages
1. Fees. Mining pools typically charge a fee for their services. While this fee is usually low (1-3%), over time it can add up, especially if you’re receiving regular payouts. It's important to factor these fees into your potential earnings calculations.
2. Centralised Management. Many mining pools are centrally managed by one organisation or a small group of people. This can raise concerns about transparency, fairness, and the potential for manipulation. In contrast, decentralised pools offer more transparency but require more technical knowledge.
3. Dependence on Pool Performance. While pooling efforts increases your chances of solving a block, it also means you’re dependent on the pool’s performance. If the pool experiences frequent downtime or operates inefficiently, your earnings may decrease.
How to Choose the Best Mining Pool?
Choosing the right mining pool is a crucial decision that can significantly impact your mining activities and profitability. Here are several factors to consider when selecting a pool.
Pool Size and Payment Frequency
The first thing to look at is the size of the pool. Larger pools generally have a better chance of solving blocks due to the combined computational power. However, payouts in larger pools may be smaller as they are shared among more participants.
It’s also important to consider the pool's payment frequency. Some pools pay out daily, while others do so weekly or monthly. More frequent payouts can be convenient for miners who want to maintain a steady cash flow.
Fees and Payment Terms
Pools charge various fees, so it's essential to compare the costs of their services. In addition to the base fee, some pools may impose extra charges for using specific payout schemes or for other services. Make sure you understand the payment terms and fees before joining a pool.
Pool Reliability and Security
Reliability and security are key factors when choosing a pool. Opt for a pool with a good reputation and stable performance, as frequent downtime can reduce your chances of receiving rewards. It’s also wise to look at security features: for example, the presence of two-factor authentication (2FA) can help protect your data and funds.
Popular Mining Pools in 2025
Now let’s briefly review the best mining pools 2025, which have stood the test of time and earned the trust of market players.
1. F2Pool
Launched in 2011, the Chinese platform F2Pool has been operating for over a decade. The platform is accessible to users from over 100 countries. F2Pool miners have access to mining more than 40 cryptocurrencies that operate on the PoW algorithm. Registration is required to connect to the pool. The platform charges a commission of 4.80% for each block mined.
F2Pool website
2. BTC.com
BTC.com, launched in 2013, is another Chinese platform. The project is controlled by Bitmain, the world’s largest mining equipment manufacturer.
In addition to Bitcoin, BTC.com allows miners to mine several other cryptocurrencies, including Bitcoin Cash and Litecoin. The commission for each block mined by the pool is set at 4.27%.
BTC.com website
3. AntPool
AntPool, a Chinese project launched in 2014, is also controlled by Bitmain. Like BTC.com, it has an English-language interface only. On AntPool, miners can mine not only BTC but also 18 other cryptocurrencies, including privacy-focused coins like Dash and Monero.
Antpool website
4. Poolin
Launched in 2017, Poolin is a Chinese mining platform. In addition to BTC, miners can also mine eight other cryptocurrencies, such as Bitcoin SV and DASH. Registration is required to get started. Miners pay a 5.01% commission for each block mined through Poolin.
Poolin website
Conclusion
The current mining system helps protect the network from attacks, but the process of mining digital tokens requires expensive and, importantly, energy-intensive computer equipment.
At present, many alternative consensus methods are being developed to address this issue, meaning that in the future, the need to mine certain cryptocurrencies may disappear altogether. Therefore, users interested in how to start cryptocurrency mining, if they delay, risk missing out on opportunities to earn.
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This article is not investment advice or a recommendation to purchase any specific product or service. The financial transactions mentioned in the article are not a guide to action. It’s not intended to constitute a comprehensive statement of all possible risks. You should independently conduct an analysis on the basis of which it will be possible to draw conclusions and make decisions about making any operations with cryptocurrency.
