Bitcoin is all the rage. Despite its value dropping from around $20,000 to just under $10,000 in less than a month, many believe that this is just a small hiccup and setback.
But there are some amongst us that don’t want just to buy, sell, and trade Bitcoins. They want to try their hand at actually mining it.
While this might sound easy on paper, the reality is that it takes a lot of time, money, resources and effort to mine Bitcoin and unless you have money to spare and are planning to set up a huge Bitcoin mining facility, it may not be worth it.
But for those that are adamant on mining their Bitcoin, there is a way around the excessive costs and effort associated with it.
This article will give you the lowdown on the best Bitcoin mining pools: what they are, how to chose them, the best out there, and now to make it profitable.
So, without further ado, let us read on to find out more.
What Is a Bitcoin Mining Pool?
When we talk about mining pools regarding cryptocurrency, and specifically Bitcoin, we refer to a method of mining the coins through combining resources with other miners.
As mentioned, mining requires a lot of processing power, electric power, and money to achieve and by sharing these with other miners, as well as the mined Bitcoins, the load can be lightened.
Once a block is mined successfully, a “share” is then awarded to the members of the pool who can present a valid proof-of-work for their part in mining the block.
The pool is another word for a sort of club or community of miners that work together. The concept began when the difficulty and expense of mining reached a point where it could take months or years for a slower miner to generate one single block.
The solution to this issue was to bring miners together to pool their resources to enable them to generate blocks more quickly and efficiently, while receiving a portion of the block as a reward on a constant basis, as opposed to every couple of years.
There are several different types of Bitcoin mining pool, and these include, but are not limited to Pay-per-share is where miners receive an instant payout for their contribution to the chance of the pool finding a block.
Proportional mining is where miners can earn shares until the point when a block is found. After this, a user gets a reward.
All shares are equal, but the value and cost are only calculated at the end of a mining round.
Bitcoin Pooled Mining is the system where older shares that were given at the beginning of a block round are considered less important than new shares.
This stops individuals from cheating the pool system by switching pool during a round to maximise return.
Other methods include the geometric method, the double geometric method, and the pay-per-last-N-shares method which are not quite as common.
How to Choose a Good Mining Pool?
First of all, you need to consider which type of mining pool appeals to you. Having given you some necessary information on the different variations that are available, it is up to you to find the one that suits you, your needs, and your capabilities.
Then you need to consider the following points:
This is a key consideration before joining a mining pool. Making sure that you pick a pool based on uptime, excellent service, consistency, and responsibility for payments, and looking out for bad reviews and common complaints are the best strategy to follow.
Make sure that the pool you want to join has a good percentage of hashing power on the Bitcoin network. If it has a good percentage, it means that the chances of the pool mining a high number of blocks is good and it will translate into a variance of profits.
Don’t join a mining pool that is incredibly complicated to use. You need easy access to its features as well as having the ability to monitor data, statistics, and graphics easily as well as perform calculations and reports.
Bitcoin Mining Pool vs Single Bitcoin Mining
There is a considerable difference between mining individually, and mining as a part of a pool and a lot will depend on your financial capabilities, as well as your reasons for mining Bitcoin.
If you are an individual who just has a primary interest in Bitcoin – you want to invest, you want to trade, you want to try your hand at mining, then the best option for you is to join a mining pool.
To set up a rig (the name for a mining computer), procure all the necessary equipment such as hardware, coolers, graphics cards etc., and then to pay for the electricity needed to run it, can end up costing much more than you will be earning in Bitcoin.
The only way you are going to break even, let alone make a return is if you are doing this on a vast scale and have the money to invest. If you are not, then it is much better just to join a pool, or even just buy your Bitcoin on an exchange.
Joining a Bitcoin mining pool is the most practical option for those that want to have a go at the mining process, but that doesn’t want to spend a fortune on doing it.
Mining via a pool doesn’t have to cost the earth because you are sharing the costs, and the requirements for resources, as well as the proceeds.
While the payouts are only as much as what you put into it, at least you are getting something back and not running at a loss- something that is all too common with single Bitcoin mining.
The Best Bitcoin Mining Pools
So, you have decided to give Bitcoin mining a go, and you want to know which are the best mining pools to consider?
We have rounded up a few of the best and provided you with a little review of each, to help you make your mind up!
Remember to consider things like fees as well when you are signing up, as some pools charge fees and some don’t. These can range from 0% to 3% and not all pools are entirely transparent about their fee structure, so make sure to do your research!
Slush Pool launched back in 2010, and it was in fact, the very first Bitcoin mining pool around. It is considered the frontrunner of the mining sector and there is no doubt that most subsequent pools based themselves on this one.
Run by Satoshi Labs, it is located in the Czech Republic, and it implements a score-based payout system to try to stamp out controversial pool-switching practice.
Regarding its size, it is about medium and takes up about 7% of the network hash rate and operates on a fixed fee system of 2% for each transaction, which is shared amongst miners.
When it comes to withdrawing, there is a set threshold which then balances out when this is reached. As well as Bitcoin, you can also mine Zcash which can be done for free.
When it comes to usability, Slush Pool is one of the easiest to navigate by far. While it may not be the most significant Bitcoin mining pool, it is one of the best.
Based in China, Antpool is run by Bitmain Technologies and has around 22% of the network hash rate which makes it one of the biggest Bitcoin mining pools in the world.
One of the other pros from Antpool is that you can decide between PPLNS which has a 0% fee, and PPS which has a 2.5% fee, both of which have their advantages depending on your requirements.
Payments are made out to miners once a day, as long as the amount mined exceeds 0.001 Bitcoin.
Those that are new to the world of mining Bitcoin will appreciate its clear and easy to use interface, and it features a dashboard which displays both the earnings and the hash rate it is mining at.
There are also lots of security features such as two-fact authentication, email alerts, and wallet locks. This is an excellent option for those just starting out, and it enjoys a sterling reputation.
Otherwise known as KanoPool, this pool was founded back in 2014.
A medium sized pool, it works on the pay-per-lasts-n-share model, and it charges 0.9% but also gives the option of availing yourself of transaction fee rewards. It has 3% of the network hash, and it averages mining 2 to 3 blocks each day.
What makes KanoPool different from other pools is the fact that it does not offer merger mining.
This means you can only mine using this pool and there is no threshold on payouts. Instead, you receive small and regular payments for your mining efforts.
This pool is simple and easy to use, but the interface does seem a little dated when you compare it with other pools that are around.
It isn’t particularly feature-heavy, but it does have two-factor authentication to give you just that little bit more security.
One of the most significant Chinese mining pools, F2Pool opened back in 2013 and holds 14% of the network hash rate.
It is at present, the second largest Bitcoin mining pool available, although its future lies in the hands of the Chinese government who are cracking down on various areas of cryptocurrency.
That said, it does operate expensive fees on its PPS reward system – you are looking at a fee of 4% which is pretty high when compared to others.
You can also mine Ethereum, Litecoin and Zcash at F2Pool and it offers a daily, automatic payout with a minimal withdrawal of 0.001 BTC.
It also offers an English interface, which is rather useful for those that don’t speak or read Mandarin. When it comes to layout, it is pretty simple to get to grips with and refreshingly, it presents information clearly and succinctly, meaning it is excellent for beginners.
Located in the US, there is no registration required to get going on Eligius. Launched in 2011, it was one of the first mining pools for Bitcoin.
However, it controls less than 1% of the network hash rate, meaning it is rather small when compared to some others.
One of its main selling points is the fact that there are no fees to pay. Instead, users receive 100% of the block reward including any transaction fees.
It works on a PPS reward system, and the minimum payout is 0.04 BTC which means you need to put in a lot of hashing power to see any return. You can also mine Namecoin on the Eligius platform.
Can Bitcoin Mining Pool be Profitable?
The answer is yes, but you need to remember that Bitcoin mining is something that requires time, effort and money.
You will only get out of it what you put in, figuratively speaking, so be prepared to invest in it, if you are sure it is something that you want to pursue.
If you are looking for an easier way to get your hands on some Bitcoin, then your best bet is to purchase it from a Bitcoin cryptocurrency exchange.