Theory behind mining pools!


Combining the forces to mine is any day better than solo mining as the work done is distributed equally.

Answered question

Do you like teaming up with people?

You would have often seen that people come together to complete a single task. For example Guardians and The Avengers combined their forces to stop Thanos from acquiring the infinity stones. A mining pool is something like this, but there are no Avengers or Guardians involved in a mining pool rather it’s all about the processing power of computers and software. The pool software is used to combine all the processing power to the pool and here the processing is entirely focused on the current block of the bitcoin that is to be mined. This process is a lot faster for solving a hash.

Now the question that pops into your head is how are people awarded?

Well, this is quite simple when a single block is solved, the mining pool gets 20 bitcoins for the effort then, the 20 bitcoins are divided among all the people who are present in the pool. Usually, the bitcoin is divided among the people based on the hashing power that they supply to the pool. And the mining pool charges a small fee before paying out the bitcoin for managing the pool.

If you think that paying a small fee to the mining pool is like losing your money then you’ve got to realize that to mine your own bitcoin it may consume a lot of your time and the resources you spend while mining the cryptocurrency. It may be days, months or even years. So, when you consider a mining pool, the mining is done at a faster rate and the rewards also come to you very quickly. In a long run, it will be profitable to you, consider the introductory fee as a long-term investment.

Edited answer