**Bitcoin Mining Pools**
Now that you have Bitcoin mining hardware, your next step is to join a Bitcoin mining pool or buy bitcoin.
Mining pools are groups of cooperating miners who agree to share block rewards in proportion to their contributed mining hash power.
While mining pools are desirable to the average miner as they smooth out rewards and make them more predictable, they, unfortunately, concentrate power on the mining pool’s owner.
Miners can, however, choose to redirect their hashing power to a different mining pool at any time.
Finding a good mining pool is important because it’s going to save you money.
Before we get into the best mining pools to join, it’s important to note that most mining pools are in China. Many only have Chinese websites and support. Mining centralization in China is one of Bitcoin’s biggest issues now.
There are about 20 major mining pools. Broken down by the percent of hash power controlled by a pool and the location of that pool’s company, we estimate that Chinese pools control ~65% of the network hash rate:
**_This is because all Bitcoin mining pools will ask you for a Bitcoin address that will be used to send your mining rewards and payouts. Our guide on the best bitcoin wallets will help you get a wallet. Read the full guide. The list below details the biggest Bitcoin mining pools:_**
F2Pool is based in China. It mines about 16% of all blocks.
Antpool is a mining pool based in China and owned by BitMain. Antpool mines about 14% of all blocks.
ViaBTC is a somewhat new mining pool that has been around for about one year. It’s targeted towards Chinese miners and mines about 11% of all blocks.
Pooling is a public pool that mines about 13% of all blocks. They are based in China but have a website fully available in English.
Binance Pool is a fast-growing pool owned and operated by Malta-based exchange Binance.
Binance is already one of the largest crypto exchanges on Earth, and they are moving aggressively to expand their reach in mining.
Huobi pool is a Chinese-based mining pool accounting for 4% of all mining.
Foundry USA is (you guessed it) a US-based pool owned by German blockchain company Foundry Digital. They account for 4% of all hashing power.
Slush Pool was the first mining pool and currently mines about 3% of all blocks.
1THash and 58coin: They mine about 4% of the blocks. Buying bitcoin with a debit card is the fastest way. The location of a pool does not matter all that much. Most pools have servers in every country, so even if the mining pool is based in China, you could connect to a server in the US, for example.
Mining hardware is specialized computers created solely for mining bitcoins. The more powerful your hardware is–and the more energy-efficient–the more profitable it will be to mine bitcoins.
Before you join a mining pool, you will also need Bitcoin mining software and a Bitcoin wallet. You will also very likely need an ASIC miner since GPU mining will likely never be profitable again in the future.
Many people read about mining pools and think it is just a group that pays out free bitcoins. That is not true! Mining pools are for people who have mining hardware to split profits.
Many people get mining pools confused with cloud mining. Cloud mining is where you pay a service provider to mine for you, and you get the rewards.
If you want bitcoins, mining is one of the best ways to obtain coins. Bitcoin mining tends to gravitate towards countries with cheap electricity. As Bitcoin mining is somewhat centralized, 10-15 mining companies have claimed most network hash power. With many of these companies in the same country, only many countries mine and export a significant number of bitcoins.
China mines the most bitcoins and therefore ends up “exporting” the most bitcoins. Electricity in China is very cheap and has allowed Chinese Bitcoin miners to gain a very large percentage of Bitcoin’s hash power. It’s rumored that some Chinese power companies point their excess energy towards Bitcoin mining facilities so that no energy goes to waste. China is home to many of the top Bitcoin mining companies. It’s estimated that these mining pools own somewhere around 60% of Bitcoin's hash power, meaning they mine about 60% of all new bitcoins.
The hash power is spread across the world. While we can see which mining pools are the largest, it’s important to understand that the hash power pointed towards a mining pool isn’t necessarily owned by the mining pool itself.
Like OXBTC, OXBTC's company runs a mining operation and runs a mining pool. Bitcoin miners can switch mining pools easily by routing their hash power to a different pool, so the market share of pools is constantly changing.
If you cloud mine, you don’t need to select a pool; the cloud mining company does this automatically, like the OXBTC cloud mining service. Bitcoin miners are crucial to Bitcoin and its security. Without miners, Bitcoin would be vulnerable and easy to attack.
However, miners are responsible for creating all new bitcoins and are a fascinating part of the Bitcoin ecosystem.
Once done on the average home computer, mining is now mostly done in large, specialized warehouses with massive amounts of mining hardware.
These warehouses usually direct their hashing power towards mining pools.
You may be wondering how pools payout their members? Do all pools use a similar payment structure, or are all of them unique?
When you become a member of a mining pool, there are many ways your rewards for contributing hashing power can be calculated. All the payout methods use the term “share.”
Don't forget to think about your tax obligation on the coins you buy or mine. There are some great tax software suites to make it easy!
A "share" is awarded to members of the mining pool who present valid partial proof of work.
Essentially, the more hashing power you contribute to the pool, the more shares you are entitled to.
The simplest payout scheme, pay per Share, guarantees the miner a payout regardless of if the pool finds the next block or not. The value of a share is determined by the amount of hashing power that is likely needed to find a block divided by the reward for finding it.
If 100 shares are likely needed to find a block and the reward is 6.25 BTC, each share is worth .0625 BTC (6.25 / 100).
Payment is paid from the pool’s existing balance, and the payment amount is determined based on your number of shares.
Because payment is guaranteed, more of the risk is on the mining pool operator. The payouts to the pool members are, therefore, smaller than in Pay per Last N Share, explained below.
One final feature of Pay per Share is that the pool operator keeps transaction fees from each block. Pool members are only paid based on block rewards.
Full Pay Per Share (also known as “Pay Per Share +”) is the same as Pay Per Share, except transaction fees are also paid to the pool members on top of the block reward.
Pay per Last N Shares is a more complicated payout that shifts more risk to pool members and more rewards.
In Pay per Last N Shares, pool members are only paid once a block has been found. Once a block is found, the pool looks at your share contributions for all previous blocks where the pool did not find the block, and this is called a “time window.” All the blocks in a time window are known as a “round.” Using these numbers, the pool determines your total share contributions over the round to determine your payout.
For example, if the pool mines through 6 blocks before finding a block, their reward for all the hashing power the pool contributed to the network over their 6-block round is 6.25 Bitcoins (not including transaction fees). If you contributed 100 shares for each of those blocks and the total number of shares was 1000, then your payment would be .625 BTC or .104 BTC per block.
The idea behind this payout scheme is that it removes all luck and only pays members based on their contribution to actual revenue earned by the pool. This scheme also incentivizes members to continue mining in the pool even as the profitability of mining different coins rises comparatively. That is because disconnecting from the pool before a block is found will pay you nothing.
Pools that use Pay per Last N Share may or may not include transaction fees in their reward payouts, so it is up to your to find this out from each pool.
Buying Bitcoin with a debit card is the fastest way.
**Let’s go over all the most important info about each of the pools.** By the end, you should be able to pick the best one for you.
Antpool remains the largest Bitcoin mining pool in terms of its Bitcoin network hash rate despite recent controversy. Antpool holds roughly 15% of the total hash rate of all Bitcoin mining pools.
Antpool mined its first block in March 2014, meaning that it emerged roughly four years after the first mining pool, Slushpool.
Antpool is run by Bitmain Technologies Ltd., the world’s largest Bitcoin mining hardware manufacturer, and a large portion of their pool is run on Bitmain’s own mining rigs.
Antpool supports p2pool and stratum mining modes with nodes spread all over the world to ensure stability (US, Germany, China, etc.).
Also, Antpool’s user interface is surprisingly slick, considering that the underlying company thrives mostly on hardware sales.
**The pool is free to join, and the process is simple.**
First, you need to acquire Bitcoin mining hardware. Then you need to download mining software. If you need help deciding. Hardware is important because it determines the size of your contribution to the pool’s hash rate. Software is important because it enables you to direct your hardware’s hash power towards the preferred pool. So make sure to make the right choice to optimize your rewards.
Antpool’s payout structure and percentages vary wildly depending on the coin you are mining in the pool.
In the case of Bitcoin, you will be charged a PPS+ at 4% plus a 2% transaction fee, or you can choose PPLNs at 0% or SOLO at 1%.
While Antpool does not directly charge fees, it also does not disclose the collected Bitcoin transaction fees. Basically, clients are left in the dark. Every Bitcoin block currently has a 12.5 BTC reward that Antpool does share with you when it finds a block.
Lately, however, Bitcoin transaction fees have been rising, and an additional 1-2 bitcoins are collected per block by pools. At this time, Antpool keeps 1-2 bitcoins from transaction fees for itself, which are not shared with miners who have hash power pointed toward the pool. It can be argued that rates prevent the service from being usable for small-time and big-volume users. The pool does not appear to have a payout threshold and pays out every day around 10 AM UTC. The minimum withdrawal amount is 0.0005 BTC (other sources say 0.001 BTC).
**Antpool** had refused to enable arguably beneficial upgrades to Bitcoin for reasons that have been largely disproven. More specifically, the controversy revolved around Segwit – a feature that required miner activation to be enabled. Even though most Bitcoin users wanted this feature activated, Antpool, among other pools, attempted to block it. That eventually resulted in the Bitcoin Cash hard fork and the ultimate activation of Segwit on Bitcoin.
**Bitfury** is the third largest Bitcoin mining pool and mines about 11% of all blocks. The main difference between the Bitfury pool and other mining pools is that Bitfury is a private pool. Bitfury, the company, makes its own mining hardware and runs its own pool. So, unlike Slush or Antpool, Bitfury cannot be joined if you run mining hardware at home. Unrelated to its pool, Bitfury sells a 16nm ASIC mining chip. Although Bitfury controls a large portion of the Bitcoin network hash rate, it’s committed to making Bitcoin decentralized.
**Slush Pool** is a name you probably heard if you ever researched mining pools. Today, we’re going to help you familiarize yourself with it and see whether it’s worth using. Slush Pool has been around since 2010 and is one of the oldest Bitcoin mining pools in existence. It was originally called “Bitcoin Pooled Mining Server,” or BPMS for short. Since the launch, the pool has had its ups and downs, but things have been mostly positive recently.
**Satoshi Labs** run Slush Pool. You may also know Satoshi Labs from their work on Trezor, the first Bitcoin hardware wallet, and Coinmap, a world map outlining which merchants accept Bitcoin. They also invented the scoring system, which awards users based on the “hash power” (the processing power) they bring to the mining pool. Slush Pool was the first mining pool, and, over the last decade, its users have mined more than 1 million Bitcoins using its services and software: BraiinsOS and BraiinsOS+.
And if that doesn’t sound impressive enough, you should also consider this: in the last 6 months, Slush Pool collected more than 9% of all Bitcoins on the market.
That percentage makes it one of the five biggest Bitcoin mining pools on the Internet.
We’ve covered what the Slush Pool is and explained how it works. Now let’s have a look at the specific services offered by Slush Pool should you decide to join it for your own mining efforts. In terms of fees, Slush Pool is very similar to other mining pools on the market. They offer a standard 2% fee, which you share with other miners. There’s a 0.0002 Bitcoin threshold, which means once you reach this sum, the platform automatically sends the earnings to your account.
The best thing about the payments is Slush Pool’s famous score-based method of payments, which allows the awards to be distributed fairly among Bitcoin miners.
However, you can also talk to customer support agents instantly if you have an emergency problem. The company has a dedicated website to start a conversation with customer support if you have questions about your mining setup, user account, or rewards.
Security levels are more than satisfactory. You have 2-factor authentication and wallet address locking for emergency cases. You get a read-only token that allows you to log into your account if someone tries to hack your account or steal your identity.
You can also lock your address if someone else is monitoring your account while you’re mining. In addition to that, the company only uses highly secured servers, which guarantee the safety of your Bitcoin wallets.
Of course, you can also choose another more convenient way, like a cloud mining provider, to buy hash power and start cloud mining to obtain digital currency like bitcoin and others. You don't need to choose a mining pool and join a mining pool. Cloud Computing has its own mining farm and miners with a professional technical background who manage mining machines to help you accomplish this.
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