A mining pool is an organization of miners who combine their individual hashing power.

  • Pooling hash power to increase the probability of solving each new block and claiming its reward.
  • Software coordinates the working miners and prevents duplicate hashing work as they try to solve new blocks.
  • Regular payments from pools allow miners to forecast and calculate future profits.

Mining pools originated as a way for miners to cooperate and remain competitive as Bitcoin mining industrialized alongside an increase in difficulty. Running only a few mining machines represented an increasingly smaller percentage of the Bitcoin network’s total hashrate, which steadily reduced the probability that smaller miners would solve any given block.

Learn more about how to win a block’s reward.

Each member of the pool receives a portion of the payout when their group of miners solves a block. Payouts are dependent on the amount of “work” each miner contributes to the pool’s efforts. When a pool solves a block, members who contributed a larger share of the pool’s total hashrate receive a larger portion of the reward.

Read: What is bitcoin mining?

By being paid based on their contribution to a pool’s overall hashrate, a miner can be paid fractions of multiple block rewards at a more regular interval instead of waiting months or years to solve a block and claim an entire reward on their own. But exactly how shares of the reward are calculated and paid can vary.

Read: How are pool miners paid?

Compass does not manage a mining pool, but all Compass miners can elect to join a mining pool of their choice. Learn more in the Compass FAQs.

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