If you have considered the possibility of mining cryptos you must have heard of cryptocurrency mining pools. Crypto mining is essentially the process for verifying transactions and adding these to a blockchain. But the process of mining is both time-consuming and energy-intensive, demanding the use of specialized and sophisticated mining hardware.
No surprises then why individual mining can prove to be less lucrative than one imagined. Instead, it is more cost-effective to join a mining pool where your chances of getting a payout are higher, even though the amount may not be as high. In a crypto mining pool, there are groups of miners contributing their hash power and collectively attempting to mine cryptos. This explains why the possibility of getting rewards is higher and these are shared amongst pool members according to pre-defined terms.
Things to consider when choosing a crypto mining pool:
1. Compatibility: Given the fact that there are an overwhelming number of miners in the market and new ones being launched every day, you need to make sure the one you use is compatible with what the mining pool uses. Slushpool, for instance, does not encourage use of GPU, CPU, and smartphone mining for Bitcoins. Besides specialized hardware, a mining pool may have specific software criteria; moreover, some mining pools demand a basic connectivity speed to pool servers.
2. Pooling algorithm: Different methods and algorithms are used by different mining pools when it comes to cryptocurrency mining. If two pools have different mining strengths, then the algorithm must be designed to distribute mining tasks uniformly across the various sub-groups. Slushpool is known for using Vardiff, a kind of algorithm to assign the more complex tasks to the stronger miners and less-difficult ones to weak miners. So, before you join a mining pool, look at uniformity of hash tasks assigned by pool servers regardless of the device you use. For example, joining a pool that prioritizes high-speed devices may be advantageous for you when you have the most advanced miners but you can be at a disadvantage in the future when more and more sophisticated devices join the pool.
3. Transparency: The operator of mining pools must provide transparency and reliability; else, the miner cannot be sure that the hash rate declared by the pool is indeed fair. Mining pools provide different ways like a real-time dashboard for miners to guarantee such transparency.
4. Security: You need to make sure that the cryptocurrency mining pool you join is secure. This means considering factors like whether the pool has an open connection, if it is vulnerable to cyber attacks, and if it can repeal such attacks.
5. Payout frequency and limits: When you own low-end hardware it is best to stay away from pools that have high payment thresholds. This is because your computing power will be limited and this means lower earnings; you will have to wait longer for hitting the threshold.
6. Fee structure: Some pools charge nominal fees while some do not charge any fees at all. But, as a miner, you need to consider the free structure and payout formula that can include hidden charges. For instance, certain zero-fee pools may turn chargeable later on while others may charge you a fixed fee as “donation”.