Mining Pool

A group of miners who have chosen to join their computing resources to increase their collective hashing power and probability of finding and successfully processing a valid cryptographic block that will reward the miner with bitcoins and transaction fees. The process of mining can require major resources of time, electricity and computer resources. Miners who desire efficiency will join together to apportion the processing burden. Since the probability of finding a valid block hash is proportional to the miner’s hashrate, small miners may have to work for a very long time before finding a block reward. When more than one miner is involved in the processing of data blocks, this is called a mining pool. Once the mining is completed and verified, the pool’s members divide the coin and transaction fee rewards proportionately. A miner’s “share” are hashes that are numerically below a much lesser difficulty level than the block difficulty and would otherwise be useless but for the support of the pool. The pool can easily verify a miner’s share hash is valid for a block which in turn proves the miner’s work on the pool’s block and through share quantity gives a reasonably accurate depiction of how much work the miner contributed to the pool’s results. Mining pools allow for a steady stream of income for miners which is distributed to the pool members.

Reference:

Malone, J.A (2015). Glossary of Bitcoin Terms and Definitions. United States: Lulu Press, Inc

The pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to solving a block.

Reference:

http://ethdocs.org/en/latest/glossary.html

Leave a Reply

Your email address will not be published. Required fields are marked *