You have your hardware ready to mine. You've found a coin you want to mine. You've set up a wallet, and know which miner you'll be using. The next step necessary to start is choosing a pool to mine on. But how do you choose one? Some miners consider this a non-issue, using whichever pool they find first, while others devote a lot of time onto finding what works best.
In this article, we'll explore why pools matter and which aspects of pools differ between them. You can apply the same process when choosing the pool for any coin, and we'll be using Ethereum Classic.
Let's start by opening the list of pools available for the chosen coin. To achieve that, open the coin's page and select the "Pools" page. You can see filters available for:
You can also sort Pools by alphabet (default), by each of the filter fields mentioned above, and by fees.
We'll go over these filters and some more details below.
The main reason pools matter for miners is the fact that pools handle your payouts. Since you mine on a pool, it's the pool's settings that determine how often you can get paid out, whether it makes sense to automatically switch between pools using Profit Switch often, and so on.
There are a few separate criteria when it comes to the payout configuration of the pool, let's go over them one by one:
This is the amount of coin you need to earn in order for the pool to send the coin to your wallet. The higher the minimum payout threshold is, the more often you'll be able to receive the mined asset into your wallet. There are, however, some limitations in-place on some of the pools: for example, the pool might only payout at specific time of day, or only send one payout per day.
The payout threshold is set as Custom with pools like Binance, which pays out directly to the pool wallet which has no transfer fee to the Binance spot wallet, auto-exchange pools like Prohashing, Mining Pool Hub, Zergpool, Zpool, Unmineable, etc. where your mined currencies are automatically converted to other cryptocurrencies or tokens. Other pools like ViaBTC allow you to convert the mined currency into BTC, but also offer the users to get currency transferred directly.
This is the system pool calculates your earnings with, and these are based on shares. The pool receives shares, which are all potential block solutions, calculates your hashrate based on them and considers what part of work necessary to find a block your system did, to reward you based on it.
Here are a few of the most common pool reward schemes explained, and you can take a look at this article to read about others.
Pools have operating fees and coin networks have transaction fees, and both are applied to miners. The operating fee is the fee pool takes for providing you with it's services and is most often in range of 0.5-4%, depending on the pool.
The network transaction fee is applied each time a transaction is made on the network, including each time when a miner receives the mined asset into the wallet, and each time the asset owner decides to send the asset somewhere else, for example, to an exchange. Some pools cover the transaction fees, while with others the miner needs to cover for those.
Some pools require users to create accounts on them, while others allow "anonymous" mining, which is using the Wallet address to identify the users. There also are some pools which allow both methods of identification. There are benefits and downsides to each approach, and you can read about those in this article.
The design and usability of the pool's dashboard can also matter, and it is up to the user to decide which one they like the most.
Latency is the time it takes for the data you send to reach the pool and back. The shares mining client sends to the pool need to arrive on-time before the pool switches to mining the next block for them to count as accepted. If the share arrives too late due to poor network conditions, pools count the share as "stale" which is often worth less than a "accepted" share, and the miner is rewarded less (or not at all) for these. It is also common that the more network hops the data has to go through in order to reach the pool, the higher the chance of the data to get "dropped", otherwise, lost in time. This can lead to shares being lost, either completely, or to be sent again, and more likely become stale.
Last, but not least, is the difficulty, which is a pool's internal setting on how much hashrate at a minimum a solution should be "worth" in order to be considered a share and sent to the pool. For the smaller miners, difficulty being too high can lead to pool incorrectly detecting the time you're mining on it. For the bigger miner, the difficulty being too low can be stressing the network equipment when too many shares are being sent. Some pools have auto-adjusting difficulty, which changes to have optimal rate both for the pool and for the miner.
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