How do cryptocurrencies are produced? They are not physical money which can be printed or minted. Cryptocurrencies are digital assets which are mined. Don’t get confused, it is not at all similar to digging metals and non-metals from layers of Earth. In crypto space, mining is the process of validating the transactions and updating the block of information in the Blockchain. In short, mining is responsible for the existence of cryptocurrency. As it requires high computing power, mining hardware and software and also the coding expertise, most of the people who even mine the coins earn the crypto coins as the incentives used to remain far away from the process. But as the crypto sector started diversifying, many mining pools were introduced which gave you an opportunity to mine the coins. In this article, let us learn more about free Bitcoin mining sites or mining pools.
What Is a Mining Pool?
Miners or the participants connected to the Blockchain network solve the complex mathematical algorithm to enter a new crypto coin into circulation. As a result, miners who managed to crack the problem are rewarded with some coins. The crypto industry is expanding, as a result, mining difficulty is also increasing due to the larger involvement of miners. Mining pools came to the rescue when the mining started becoming non-profitable due to the increased hash power and heavy electricity bills. Mining pools are the group of miners who wish to pool their resources(mining) to increase their combined hashing or computational power. Pools manage to validate the transaction faster than the solo miner, then the rewards will split among the members of the pool depending upon the payment method. Mining pools are the opportunity to earn rewards via the process of mining just by sharing your computational power.
How To Choose a Mining Pool?
There are a number of mining pools available in crypto market space. You might get confused while choosing one of them. To select the pool, you should at least consider the mentioned parameters:
- Pool Size: In crypto mining place, bigger the pools means the regular payments. But with the smaller payouts, the profit is shared among a number of members. In the smaller pools, the opposite situation exists.
- Fees: Some mining pools are free of cost while some charge up to 4% of the rewards depending upon the features offered by them.
- Reliability and Security: Cybersecurity is one of the most important factors which must be considered while choosing the pool. Also, the mining pool must be reliable who don’t steal or deceive the funds of the members. You can read the review on the web before selecting the pool.
- Payout Policy: Make sure to read the payout policy, if the pool is paying the rewards on a regular basis or monthly or after every block validation.
Types of Rewards Offered By Mining Pools
There are varied kinds of rewards offered by the mining pools depending upon their payout policy. You must be aware of those type of awards:
- Pay per share (PPS): Fixed amount is paid to each user after the submission of shared computing power.
- Proportional: Award proportional to share contributed will be paid to users.
- Score based: Prominence is given to the newer shares and rewarded on the basis of submission time.
- Pay Per Last N Shares (PPLNS): Vary with the rewards each share paid in multiple rounds.
- Fully pay per share (FPPS): Similar to PPS but transaction fees get distributed (proportional to hash power) among the miners along with rewards.
- Shared Maximum Pay Per Share (SMPPS): Similar to PPS but lesser share than earned is paid to members.
Based on the payout policy, mining pools differ from Bitcoin cloud mining as mining pools involve sharing of rewards in accordance with share while in cloud mining, you need to pay the service provider of mining and get the rewards.
Best Bitcoin Mining Pools
Since 2010, after the first mining pool was launched, various service providers invaded the crypto ecosystem with a number of features. Let us find out a few of the most popular pools:
To sum up, it can be said that joining a mining pool either free Bitcoin mining sites or paid ones will be more efficient in making money than mining by your own or individually accumulating the resources for the purpose. If you are a novice, it is advisable to join the established mining pool even if you need to pay more charges for gaining experience. Once you get aware, you might choose the pools with lower fees to earn more profits.