Frustrated with trying to mine bitcoins on your own? If so, you need to think about joining a Bitcoin Mining Guild or group. Also known as a Bitcoin Mining Pool, this is a great way to ensure you have enough computational muscle to be able to actually mine bitcoins. We’re going to go over some of the frequently asked questions about Bitcoin pools so that you can decide whether or not this option is right for you.
What is Pooled Bitcoin Mining?
Basically, a Bitcoin Mining Pool is a group of people that decide to work together to try to solve a block and win bitcoins. Because of all the competition and large companies using massive amounts of hardware to mine bitcoins, individuals have decided that working with others is the best way to be able to stay competitive and be able to actually get rewarded with bitcoins.
Do I Need to Join a Bitcoin Pool?
Unless you have a lot of computing power available – like multiple computers dedicated to Bitcoin mining – there’s a good chance you’re not going to be successful when trying to mine bitcoins on your own. While you don’t have to join a Bitcoin Mining Pool, it’s one of the easiest ways to make sure you have enough computing power to be able to actually get rewarded with bitcoins.
How Do Bitcoin Pools Work?
Basically, you’ll join a website with other Bitcoin miners and become part of a group. As you mine for bitcoins, your processing power will be added to that of other members of your group after you install special software. As you might imagine, this can make it a lot easier to be able to successfully mine a block for bitcoins. The exact split of the 25 BTC reward will vary depending on the group you join, so make sure you read the fine print before signing up.
Bitcoin Pool Payout Methods
Here’s a list of some of the more common payout methods if you’re part of a Bitcoin pool.
- CPPSRB – Capped Pay Per Share with Recent Backpay.
- DGM – Double Geometric Method.
- ESMPPS – Equalized Shared Maximum Pay Per Share.
- POT – Pay On Target.
- PPLNS – Pay Per Last N Shares.
- PPLNSG – Pay Per Last N Groups (or shifts).
- PPS – Pay Per Share.
- Prop. – Proportional.
- RSMPPS – Recent Shared Maximum Pay Per Share.
- Score – Score based system.
- SMPPS – Shared Maximum Pay Per Share.
For even more information about Bitcoin, be sure to check out our ebook on Bitcoin. It has a wealth of information about the basics of Bitcoin, including a chapter on the economy and how Bitcoin fits into the big financial picture around the world. This is the best way to get even more information about Bitcoin all in one place.