Mining Pool

A mining pool is a collective of miners who join forces by pooling their computational resources to increase their chances of solving blocks and earning rewards. Mining on your own, known as solo mining, can be a daunting task because the probability of successfully mining a block can be quite low, especially with popular cryptocurrencies like Bitcoin. By joining a mining pool, miners can work together to solve blocks more consistently, sharing the rewards based on the amount of computational power (or hash rate) each miner contributes to the pool.

The rewards earned by a mining pool are distributed among its participants according to a predetermined formula, usually based on the proportion of computational work each miner has contributed. This system provides more predictable and steady earnings for miners, making it particularly appealing to smaller miners who may not have the resources to compete on their own. Instead of waiting for a long time to potentially mine a single block solo, miners in a pool receive regular payouts, which can help offset the costs of mining, such as electricity and hardware maintenance.