The Best Crypto Mining Pools 2024

What is a Mining Pool and why do I need one?

In a Mining Pool, multiple miners combine their Hashing Power and share all the rewards, but why is that? The answer is simple – to guarantee themselves constant income in short periods of time. The process of decoding a new block involves high levels of hash rate. This results from the pooled mining power of each gear participating.

As I mentioned earlier, the mining of a certain coin tends to increase the difficulty of the network. This is because a lot of people mine to earn crypto coins. With this situation present, the overall hash rate in the network increases and each block will be mined earlier than the targeted block time. Therefore, each blockchain has a self-regulating mechanism which adjusts the mining difficulty. It intervenes in setting the time when mining. That, on the other hand, depends mainly on:

The hunger for blockchain-based services is arising at full tilt. This results in developing technology and all this thrives at a rapid pace. It is an attractive gadget for numerous business fields. Its nature of open electronic ledgers that distribute the database system, can rationalize operations for everybody who’s involved.

When you try mining solo, there are a lot of other users making an effort to do the same. The only one will get the reward though – just like in a lottery. For example, the actual block reward for bitcoin now is 12,5 BTC with a high price in USD per BTC. Now, you can hope to be lucky and become the one winner in a million participants or simply join one of the best mining pools and combine all your hashing power to increase the chance of earning something.

In other words, the reward is split between all miners contributing to the pool. This automatically means smaller, but frequent rewards. To relate to the BTC example earlier, instead of earning some amount once in your lifetime, you can get a few cents for nearly every new block mined. This may not sound much, but when summed up in time, it will be probably equal to a single average solo mining single profit (if I ignore the pool fee for the moment). Let us remind you, that when mining on your own, this reward may occur in years.

Оf course the reward is split between all miners contributing to this pool, this will result in smaller rewards but more frequent. So instead of maybe earning 125.000USD once in your lifetime – you can earn a few cents for nearly every block. This sounds not much but will sum up with time and on average the same profitable than solo mining (if I ignore the pool fee for the moment)

How does pool mining work?

The basic way mining pools work is straightforward. They have a connection to the blockchain in order to be constantly up to date. Its server communicates with the blockchain through the downloaded full node software. Without it, the pool can’t really function, because nobody will know which block is already found and which one is up next. None of you wants to mine already existing blocks and waste time and money.

All users in the pool connect to its server. It is collaborating with the blockchain and the network assigns the direction of each miner’s work in the pool. Every report for each job done or any result is to be reported back to the server. This is needed to keep the order of the blocks and all information to be saved and updated constantly.

In case a block is found, the decipher of its code will be reported back to the pool. The then announces it to the network and the whole blockchain. Everything is up to date. The reward goes to the pool and will be split accordingly and transferred to all the participants. The pool’s advantage is the fee it keeps for the provided service and support. Usually, it varies between 1-2% of the whole reward.

If a pool’s fee is 1%, the results for a 10min block are quite the chunk of money. That sound like a lot! If you keep on reading, you will see, that the actions behind the scene are worth every cent. Here is a glimpse of the whole process in the background, which is a bit more complicated.

I would like to point out a few of the main time and effort consuming actions, that pools are required to do, in order to be attractive to users and earn crypto rewards. Here they are:

Having all that in mind, pools deserve their fees, so they can keep serving the common good of profitable mining. When the mining requirements are present, calculations are in order. When a new block is found, each pool needs to calculate the share of the reward, which has to be paid to each miner. This is based on the contributed calculating power. This can’t be forged. Pools are monitoring every move, made in their network.

Next phase is the actual incomes’ relocation. Pools need to transfer the rewards to all miners on regular bases. To keep it all on the legal side, some administrative work needs to be done. In addition to this, they take care of constant updates installation, keeping the servers up and running 24/7, changing the mining gear, if necessary etc. To sum it up – the bigger it is, the more work is needed. A small clarification is in order concerning the size of a mining pool, which is determined by the number of users in it.

How to choose a good mining pool?

Numerous pinpoints require your attention when choosing the best mining pool. One of them is the algorithm a certain pool is working with. Better check that out, because mining a coin in a pool, which doesn’t support the matching coding structure is a pure waste of time and money. All those criteria are somehow important, but not crucial for a successful mining. Here are the top 4:

• Size and Market Share
• Pool Fees
• Reward Systems
• Location

Size and market share

When I talk about mining pools in the crypto world, usually bigger is better. As explained earlier, big ones include more users. When their hash power is combined, the speed of deciphering a new block is even higher. This multiplies the chances someone from the participants to find the next block. That is good news for you. After all, each price is separated among all miners. To sum it up, join a bigger pool to have faster and repeated incomes.

Be careful though, the decentralization of the network is something worth paying attention to. Just as a reminder – mining is based on allocating processing power. This power is later used to solve algorithms. This way, the transactions are proven to be true and completed successfully.

When somebody attacks a certain coin’s network and hacks a pool with more than 51% market share, it basically overpowers the rest of the miners and controls the net-hash (short for network hash rate). This allows them to manipulate the speed of a new block is found and control the situation. They simply mine on their own as fast as they want, without being bothered. To prevent such invasion, also known as “51% attack”, no pool should have an overall market share of a certain cryptocurrency network. Play it safe and try to avoid such pools. I advise you to work on balancing and keeping the network of a coin decentralized.

Pool Fees

Till now, you probably already have acknowledged the huge role pools are playing and that all the hard work costs them money. They are used mainly for covering hardware, internet, and administration expenses. Here comes the fee in use. Pools keep a small percentage of each reward to pay these costs. These are usually around 1% and rarely up to 5%. Saving money from joining a pool with lower fees is not that much of an income rise, e.g. you will earn 99ct instead of 1 dollar.

There is an interesting perspective in that direction. If there are fixed costs, that each pool needs to cover, why there are some without a fee? This question has several answers. One of them is to be used as a promotion for a new pool and help to attract more users. Another way to look at it is decentralizing the network by joining such a pool. Moreover, mining without the fee will even slightly increase your possible income. Still, you can expect fees here after a while. After all, it can’t run for free forever.

Reward system

This is one of the main characteristics of each mining pool. A reward system can even tilt the scales of your choice. Mainly, there are several different ways to calculate the rewarding structure and decide how to split it between all the miners. Each of them in the pool, where a new block is found, will get a piece of the pie. The size of that piece will be based on the individually contributed hashing power. And no, it is not that simple. There are also numerous small details, differences, and additional commodities accompanying the whole process.

This part of mining might sound complex, but I would recommend you to look at it. Get familiar with all the terminology and approaches on the matter and you will be better prepared to understand the pros & cons of every reward systems.

Location

In the cryptocurrency world, speed is an important factor. The connection depends pretty much on the distance your rigs are from the pool’s provider (or server). In general, it is suggested to pick a pool relatively close to your location. The desired outcome is to have as low internet latency as possible. The distance I talk about is from your mining hardware to the pool. All this will result in a new-found block announcement done as early as possible. Your goal is to be the first one to inform the blockchain network about it.

It is just like in Formila1 or the Olympics, any millisecond matters! If 2 miners find a correct solution for the current block at the same time, the one that broadcasts the solution first will most likely get the reward. There are pools with high or low hash difficulty. This determines the speed with which each block is supposed to be mined. The shorter the block time of a coin is, the more these milliseconds matter. For example, when a bitcoin network has determined 10min for a block, you can more or less ignore optimizing the pool for the difference of 20ms.

How to join a Pool?

Pick a pool, register and you are good to go. The registration is easy and simple. Pools mainly use the information you type for statistic reports and network updates. After logging in by entering your email address, deciding on a username and a password, think of the hardware. That is right, once logged in, it is a good idea to name each of your mining gear (also called workers in the pool’s software). This way it will be much easier to keep track of their performance. Once you have established this in the pool’s website, add this information in your mining hardware/software as well. It will help to synchronize both ends. You are ready to mine.

Knowing that pools are relying on several factors like internet connection, servers, and hardware, joining more than one is a clever step. Especially when doing business online and money is involved, make sure you backup regularly. This is doable by picking a second or third pool. Why not even more? Don’t forget to enter this information in your hardware/software too. As soon as one pool goes down for maintenance or doesn’t respond, the backup option takes over and continues mining. This way you will be mining 24/7.

Can I set up my own mining pool?

Of course, you can. This requires certain hardware, an internet connection with dedicated IP address and a 24/7 up time. This is usually accomplished with a VPS (Virtual Private Server) and you should be able to set up and administrate a remote one (most likely in Linux) as well. You must invest a lot of time and effort into it. Keep in mind that the hardware requirements will raise as soon as your miner base grows. With technology, things evolve at a fast pace.

Remember, users, are the ones connecting to your pool, paying you fees and mining blocks on your territory. The more miners, the more profit for you.

Does Cloud Mining Service use their own Pool?

Not necessarily. Normally, there are cloud mining services, which connect the rented hashing power to their own pool.

Cloud mining can be done at basically any cloud hosting service. They are diverse and alike at the same time. Some offer packages, where you can choose the mining algorithm in combination with freely choosing whether to mine solo or join a pool. No limitations here. The only condition is that you need to set it up by yourself.

Other services just provide the hardware and internet connection. You need to remotely install all software and set up the configuration on your own. Cloud mining services in the cryptocurrency world offer a rich palette of options.

How can I calculate my mining profits?

Do that with a mining calculator. Pick the coin that you would like to mine and use the calculator dedicated to this cryptocurrency. Remember, all values used vary constantly and can be 100% accurate just for the moment of estimation.

How to cash out all the mined coins?

There will be times when you will ask yourself – “What to do with all the mined coins I receive?”. You have several ways to act this one out. If you don’t wish to keep the coins or you need some FIAT money to cover your expenses, exchanges are the solution. You can sell the cryptocurrency to an exchange. They will pay you the equivalent in FIAT (USD, EUR). Once cashed out, you are free to do whatever with your money.

Now, what are exchanges and how to pick the proper one for your needs? Basically, they work like a middleman between yours and other coins, or between your coins and FIAT money. You need to stay informed which ones work with which cryptocurrencies. Bitcoin and Ethereum, for example, can be sold at any exchange and will gain you a certain income.