What Is a Mining Pool?
A mining pool aggregates the computational power of multiple miners to improve block discovery consistency.
Why Mining Pools Exist
As network difficulty increases, solo mining becomes statistically impractical for most participants. Pools reduce variance and stabilize reward distribution.
How Mining Pool Rewards Work
Common payout models include:
- PPS (Pay Per Share)
- PPLNS (Pay Per Last N Shares)
- FPPS (Full Pay Per Share)
Each model balances risk and reward differently.
Pool Fees and Infrastructure
Pools charge fees to maintain:
- server infrastructure
- monitoring systems
- payout processing
Geographical server distribution affects latency and stability.
Are Mining Pools Centralized?
While pools aggregate hash power, they do not own miners' equipment or private keys. Control remains decentralized at the protocol level.
Conclusion
Mining pools are a structural response to rising network difficulty and play a crucial role in modern mining ecosystems.