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In recent months, miners around the world have been extremely active, which can be seen through spikes in hash rates that have coincided with a significant increase in cryptocurrency prices. In early 2020, Ether (ETH) could be bought for $ 130 and now ETH has reached $ 500. The king of cryptocurrencies, Bitcoin (BTC), has added nearly $ 10,000 to its price.
So how can users interact with the industry? What has long been obvious is that mining alone is not the way to go. For Bitcoin, Ether and all major altcoins, the blockchain is built in such a way that the complexity of searching for blocks is constantly increasing, which means that a pair of GPU cards is not powerful enough to generate a block.
The point is not that the rig is not powerful enough to mine Ether, rather it is mathematically impossible. A rig can stand there looking for a block for several months. If we talk about Bitcoin mining on ASIC, it will take even longer. It is easier to go bankrupt on equipment and electricity than to mine cryptocurrencies on your own. The calculation is simple: divide the total hash rate of Ether by your hash rate and get the number of seconds it takes on average to find a block.
Hence, it seems logical that miners would pour into mining pools, especially today, as non-mining companies are also starting to launch such products. For example, Binance recently launched its own mining pool for Ether.
What to know before joining a mining pool
A mining pool is a server that combines the computing power of all the participants connected to it. Miners join the pool on the Internet, reallocating their hardware in the pool. Together they perform mathematical solutions to find blocks of a specific cryptocurrency. When the pool finds a block, it gets a consensus from other network participants, then receives a reward. This reward is shared among all pool members based on the amount of hash rate provided.
Before choosing a pool, it is important to know the size of the pool. As a pool grows, the chances of discovering a block increase. But the more people join the pool, the less profit each participant receives. This is a double-edged sword: small but frequent payments or larger, but less frequent payments.
Before joining the pool, users must find out the minimum payout, which is the minimum amount of cryptocurrency that must be mined before being sent to the users’ wallet. If the minimum payout is high, the user will have to be in the pool for a long time before receiving any income.
Another important thing that should be mentioned is that participation in any pool is not free. Users pay a certain percentage of their income for participation. Usually, this fee ranges from 1% to 3%. In general, participation in any pool does not require serious investment and knowledge, and if the user has already put together a rig, it will not be difficult to understand which pool to choose. Here’s what to look out for when choosing a pool, regardless of the cryptocurrency mined:
- The number of participants in the pool, which affects individual income.
- Ping time, or delay, which is a result of the user’s computer needing to transfer information to the pool. The ping time depends on the spatial distance: the shorter the ping, the shorter the delay and the faster the data is transferred. A high ping is not appropriate because there are pauses between block changes in cryptocurrency networks and with a high ping, the user’s computer can exceed the values for the old block and mine in vain. Usually, a comfortable ping lasts up to 10 milliseconds;
- The size of the minimum payment, which should not be too large, otherwise the payment may not take place for a very long time.
- There are many pools that are fraudulent or take a larger amount of income. Users must find out the reputation of the pool in advance.
Once you’ve built a rig, it’s time to choose a mining pool. Of course, most of the pools work for Bitcoin or Ether mining. Below are some of the most popular pools used to mine the top two cryptocurrencies. For Bitcoin, almost all of the major pools are based in China, which is not surprising, as the country produces most of the Bitcoin mining hardware.
F2Pool
Founded in 2013, F2Pool is one of the oldest Chinese pools and is of primary interest to Bitcoin miners. The pool accounts for nearly a fifth of the total amount of BTC mined. The pool uses Pay Per Share +, or PPS +, as a payment model where the miner receives a reward for each share accepted by the pool, regardless of the blocks found by the pool. The pool determines the cost of each share independently, taking into account network complexity, reward, block time, and pool power.
In addition to Bitcoin, the pool mines more than 40 coins. The commission, depending on the currency, varies from 1% to 5%. As for Bitcoin, the pool takes 2.5% of the rewards as a commission and payments are made once a day. Users must withdraw the money earned within 90 days, otherwise the pool will keep it for the development of the service.
Poolin
Poolin is a pool owned by parent company Blockin launched in 2017. The pool is popular with Bitcoin miners. Poolin offers a few coins to choose from: Ether, Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC), and so on. Commission fees are not fixed; rather, they are set up separately for each cryptocurrency, with a 2.5% fee for BTC.
The payment model depends on the chosen currency: PPS or Full Pay Per Share, known as FPPS. With the latter method, the pool also distributes the transaction fees among the miners, which adds 10% to 20% to their income. This method is used to pay for Bitcoin mining.
One noteworthy feature is that Poolin provides ASIC and GPU mining from Nvidia and AMD. The development team regularly updates the software every two weeks to ensure the stability of the service.
BTC.com
BTC.com is one of the largest international cryptocurrency mining pools. It is controlled by well-known mining equipment manufacturer Bitmain, which produces a line of ASIC miners under the Antminer brand. The China-based platform was launched in 2013.
The commission for each block extracted from the pool is set at 4%. In addition to Bitcoin, a number of other cryptocurrencies can be mined through BTC.com, including Bitcoin Cash and Litecoin. Mining pool representatives keep track of their users’ income.
AntPool
AntPool is a Chinese project that was launched in 2014. Just like BTC.com, the pool is controlled by Bitmain. In addition to BTC, AntPool can mine seven other cryptocurrencies, including the privacy-oriented coins Dash and Monero (XMR).
Payments are made daily and the service has low fees, with some payments being made without fees. In AntPool, payments are mainly made using the standard method, Pay Per Last N Share – or PPLNS – where users receive payments for the last share based on the pool’s luck.
With this method, there is no fixed payment for the fee and the main problem is the speed of finding a block. When a pool uses the PPLNS method, the payment comes from “time shifts” between looking for two blocks. It means that if the block is not found for a long time, the payment gradually increases.
A distinctive feature of the pool is the ability to work in “solo” mode, but not in the literal sense. The pool allows for “solo” mining through joint efforts. This means that the user whose rig discovered the block will receive payment.
SparkPool
SparkPool is registered in China and launched in January 2018 and six months later, the pool entered the list of Ether mining leaders. Additionally, SparkPool allows for coin mining such as Nervos, Grin and Beam Common Knowledge Base (CKB).
The extraction takes place using the Ethash algorithm and payments are made using the PPS + method. Payments are made daily, based on Singapore Standard Time and the minimum payment amount is 0.1 ETH. On the 28th of each month, funds are automatically withdrawn if the balance is greater than 0.0105 ETH and the withdrawal fee is 1%.
Registration to the swimming pool is optional. Users can check out anonymously, but in that case not all features of the pool will be available.
Ethermine
Ethermine is one of the most popular pools dedicated to the mining of Ether. This pool is the largest for Ethereum. The pool servers are located in Europe, Asia and the United States.
The pool uses the PPLNS payment model. The minimum payment amount is the equivalent of 0.5 ETH and the maximum amount is 10 ETH. There are no fees for withdrawing funds and payment occurs immediately if the blockchain network is stable. The pool is only intended for cryptocurrency mining on GPU processors.
SpiderPool
SpiderPool is a five-year Chinese project that only supports four coins: ETH, BTC, BSV, and BCH. However, the pool is quite popular with Ether miners.
There isn’t much information available for non-Chinese users, but the pool fee is 2%. The minimum payment amount depends on the currency, but once a week, users can request an amount below the minimum threshold. If not, payments are made automatically once a day.
Nanopool
Nanopool specializes in coins which are mainly mined using GPU cards. Mining of Ether, Ethereum Classic (ETC), Zcash (ZEC), Monero, Ravencoin (RVN) and Pascal (PASC) are currently supported. The pool allows users to mine not only a single cryptocurrency but also two different cryptocurrencies at the same time, with a proportional distribution of power between them. Like any other mining pool, Nanopool has a commission that is charged based on the income of its users. The pool uses the PPLNS payment method.
Withdrawal of Ether from a miner’s account balance to his wallet is done automatically in Nanopool when the minimum payment is reached, which is 0.05 ETH.
Nanopool does not have a clear payment schedule, but payments are made in stages throughout the day. As soon as the miner’s account balance exceeds the set minimum, it will be paid during the next payment round.
Mine or not mine?
When choosing a pool, each person should pay attention to the list of available coins to make sure their preferred coin is on the list. Also, consider the payment and commission model, as a pool that offers the lowest commission and pays for transactions is preferable. Another problem is the proximity of the pool servers: the closer the server is, the more stable the mining process will be.
Related: The best crypto-mining graphics cards to achieve great success
In general, it can be said that no matter which coin the user chooses, they are unlikely to lose when using a mining pool. According to Chun Wang, co-founder of F2Pool, the entire mining industry is currently on the rise:
“Bitcoin and other cryptocurrency mining continues to grow, just like last year. Thanks to DeFi, there has been a period of high transaction fees in the ETH network over the past few months, leading to much higher ETH mining revenue than usual. People were drawn to buying related mining machines to mine ETH. With mining revenue declining, miners’ passion for participating in ETH mining fades recently. But the rapid rise in the price of BTC and other coins makes mining more profitable, more people are willing to participate in mining now. “
