Taking advantage of mining pools
For many miners just entering the world of cryptocurrency, it can be difficult to find measurable success – especially if they are solo mining. Putting forth enough power to efficiently solve worthwhile blockchains takes resources most novice miners just don’t have. At least not on their own. This is where the collaborative setup of a mining pool can pay huge dividends for everyone involved. Here’s an in-depth look at what exactly a mining pool is and how its advantages can help put money in your pocket – particularly if you mine via colocation.
What is a mining pool?
A mining pool is the joining of resources by a group of miners who all share their processing power over the same network. The pool splits its earnings among each member based on a number of possible different payout structures, with miners needing to present a proof-of-work – or share – to indicate their contributions. Miners with greater processing power are able to contribute more to the pool, and are thus able to reap more of the rewards once all is said and done. This group structure has a number of benefits over solo mining and provides a profitable way to mine for those who are just starting out.
The benefits of pool mining
The primary reason pools came about was due to mining becoming more and more difficult and time-consuming as the industry increased in popularity. Mining bitcoin particularly requires a tremendous amount of processing power and time, which made it difficult for solo miners to find success when mining it. Through the structure of mining pools, people are able to mine more quickly and reap rewards more consistently than through solo mining. Sure, going it alone might mean you don’t have to share any of your reward with anyone, but it also drastically reduces your likelihood of seeing a reward at all. Pooling provides a more steady income and a less sporadic outcome for all members involved.
The added advantage of colocation
Miners involved in pools who also operate via colocation have an additional leg up on the rest, thanks to the way payouts work. As previously mentioned, every block solved in the pool produces shares – proofs-of-work that show the miner contributed power and resources to that solution. And the more they contribute, the higher the value of their reward. Those who are able to put a great deal of power and resources into the pool without spending much money operating their rigs are able to really capitalize on the payout and receive a substantial reward. This is where colocation can massively benefit pool miners. The ability to operate via a professional colocation service – at minimal cost and maximum power – sends profit margins to new heights. You need a colocation partner if you hope to take full advantage of your mining pool.
Joining a mining pool
Mining pools are relatively easy to join online. It’s essentially the same as registering for a membership on any other website. When picking a pool, you should consider how much the pool will deduct from your payments. The typical range is between 1 and 10 percent, though some pools don’t deduct anything at all. You should also utilize reviews to make sure you’re joining a dependable pool that pays rewards on time.
Compute North provides miners with industry-best colocation services to boost operations at a reduced cost. Contact us today to start taking full advantage of your mining pool and send your profits to new heights.