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Crypto and blockchain are changing fast, but miners are still the backbone of the whole system. And ever since the difficulty of generating a block began increasing fast, mining pools became even more vital.
What are the mining pools?
Essentially mining pools are syndicates of miners who share their resources to generate blocks of a blockchain faster. Usually, they also agree to share rewards for their work in proportion to their contributions, as well as necessary fees.
Mining pools help the new miners to learn the ropes without serious risks. They also provide a steady income for the participants and the computing power for the whole crypto market.
How do they create profits?
In short, pools are like command centers for miners. They serve as coordinators for the participants, distributing both work and rewards, keeping tabs on individual contributions, etc.
The process of mining is like solving a puzzle in order to verify and add new transactions to the public blockchain ledger. The search for the solution demands a lot of computational power and organization. This is why it is easier to work in a team than by yourself.
The efforts of miners produce accepted shares and rejected shares. The former represent the work that is actually contributing to the common goal. The latter represent useless work that didn’t result in any advancements.
Participants share rewards based on their accepted shares. This way their profits tend to be more or less equal, but not exactly the same. There are also different types of reward distribution:
- Pay-per share (PPS): provides instant payouts that are based only on the number of accepted shares of a participant.
- Proportional (PROP): When a round ends, participants get a reward proportional to the number of their member’s shares.
- Shared Maximum Pay Per Share (SMPPS): mostly the same as PPS but the payouts are limited to the maximum that the pool has earned.
- Equalized Shared Maximum Pay Per Share (ESMPPS): mostly the same as SMPPS, but the payments are distributed equally.
Where do the most powerful mining pools operate?
Over 80% of these enterprises are based in China. Some are local and only have websites and support in Chinese, others go global. Other countries with large shares in mining are:
- Czech Republic - 10%
- Iceland - 2%
- Japan -2%
- Georgia - 2%
- Russia - 1%
Here are the Top 10 most popular pools, according to Revain reviewers:
1. Slush Pool
Launched back in 2010, the first mining pool in the world still stands strong. It is not the largest in the world, but hundreds of thousands have already used it to mine Bitcoin. Revain users praise its user-friendly interface and score-based rewards distribution. However, there are currently only two currencies available - Bitcoin and Zcash. And the fees might be relatively high.
The project is known for the flexibility it grants to the users. The agents evaluate the hardware of the miner, determine which currency they should mine in a given time, and automatically switch to another currency when conditions change. Revain reviewers also complement the profitability of the platform pool and fast payments. At the same time, they noted that the growth of the trading volume is slow at the moment.
This Ethereum pool has relatively low costs and high security. Launched in 2018, it expanded fast and allows users to mine a variety of altcoins. Revain reviewers also praise its 24\7 customer support and regular payouts. Some of them are, however, disappointed by the inability to mine Bitcoin on Nanopool.
The pool with the highest hash rate and the largest amount of the generated blocks output on the BTC network is managed by Bitmain Technologies. It supports various currencies and appeases Revain users with low fees and the ability to customize their experience. The withdrawals have limitations, which might be annoying for some miners.
The first Chinese pool is available in over 100 countries and supports over 40 currencies. Revain authors approve of its reliable security, rewards for the users, and its mobile app. They are less excited about the relatively high transaction fees and the limited selection of languages on the website.
The project uses the Equihash algorithm and rewards miners who find the best solutions. Revain users appreciate its low costs and high transaction speed. The cons include the absence of the merged mining and the limited number of available currencies.
As the name suggests, Noobpool is great for new miners because of its active community and customer support. Revain reviewers are also happy with its regular payouts without fees. Yet some of them criticize the overly simple website and the restrictions on withdrawals.
8. Huobi Pool
Houbi’s division effectively runs two businesses: the POW Mine Pool, which provides profitable and convenient one-stop mining services, and the EOS Super Community, which has detailed insights and tips, as well as voting features. Revain users appreciate both sides of the enterprise and praise its user-friendly structure and interface. But they don’t recommend mining Huobi Pool Token (HPT), which is promoted on the platform yet does not hold a high value.
The global company’s servers are spread out across the US, Europe, and Asia so that the issue of latency can be eliminated once and for all. Additionally, Revain reviewers appreciate the diversity of coins available for mining. However, Coinfoundry is still on the smaller side: there aren’t a lot of miners, and the hash rate is still low.
10. OKEx Pool
The OKEx exchange launched its mining pool in 2018. Since then, it has been developing fast and eventually attracted some of the Revain users with its great interface and easy registration. At the same time, it has high demands for the users’ hardware and is unavailable in some regions.
The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.