Hello everyone, This is the part-2 of the “is Bitcoin too expensive ? mine them instead”. If you want to read part-1 of this article please click here.
What are Mining Pools ?.
Mining pools are group of miners working together to mine bitcoins and share the rewards based on the hashrate everyone contributes.
How Mining works in a mining pool?
In simple terms, your machine is a worker bee which will connect to one of the mining pools and a work gets allocated to solve a portion of SHA-256 puzzle and based on the overall rewards you will receive your share and the reward depends on how much hashrate are you contributing.
Why should I join mining pools ?.
The odds of you mining alone and finding a new block are very slim instead you join a group of miners who work together and share rewards there by your payouts will be in a predictable manner.
Popular Mining Pools :
Here is the top list of mining pools for bitcoins and their combined hashrates. Reference from https://btc.com
How rewards work ?
For every block mined there is a block reward which is now 12.5 BTC (This again can go down as the mining progress and difficulty increases) and in addition to that there is transaction verification rewards to verify all the transactions in a block. The below is a sample rewards for ant pool from btc.com
e.g: Block 501679 has 12.5 block reward and 7.12373106 for Transaction fees
The more the hash rates then the odds are better to find a new block which leads to better rewards and also there are mining pool fees every pool specifies if you are interested to find the pool fees you can look them in their respective mining pool size
Increasing Daily payouts with HashFlare:
I bought 4TH/S in HashFlare to start my cloud mining journey (Part-1 of this article) , Hashflare gives an option to adjust my pool settings ,here are the pools that are supported by HashFlare for SHA-256.
AntPool, SlushPool, BW.com, BTCChina, F2Pool
When someone buys hashrate, by default it divides the hash rates among these 3 pools namely BW.com(34%),SlushPool(33%),BTCChina(33%) and you can adjust the pool settings by clicking on the gear icon at the right corner on the pools tab.
I noticed that my daily btc payouts were gradually degrading with the default settings and I decided to do some more research on mining pools.
I employed a strategy to go with top pools to see if it impacts my payouts and it actually did and in a positive way, after several tryouts of adjusting the pools, here is what I ended up with Antpool (80%) and SlushPool (20%)
This has increased by daily payouts. Its better than my previous payouts with default settings.
Conclusion :
The payouts have definitely increased even though its not significant its better than the default settings, in reality it has changed by (20 cents/Day again this is based on the current BTC rate) approximately. You are allowed to change the pool contribution once a day.
Understanding mining pools and rewards has definitely helped me to increase by daily payouts and I thought I would share this information to my readers
Happy Cloud Mining!!! , If you like this read leave me a clap.