What is Pool Mining?

With generation difficulty increasing, using lower-performance devices to mine can take some time before block generation. In the hope of providing a smoother incentive to lower-performance miners, several pool miners have been established.

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Mining Pool Explained
This is a protocol for various miners to work together with the aim of smoothing out their mined coins. Pool mining is a mining method where various generating clients help in the generation of a block. They will then divide the block reward according to the processing power that each of the miners contributed. This method effectively decreases the block generation reward's granularity by spreading it out seamlessly over time.

Functions of a Mining Pool
A mining pool acts as a coordinator for the pool members. The functions of this pool include looking for rewards using pooled efforts of processing power available, controlling the hashes of pool members, keeping a record of work done by each pool member and allocating reward shares to pool members in line with the work they performed. The pool might also require that a fee be paid by each pool member.

There are two ways in which work can be assigned to pool members. The regular method involves giving members a work unit consisting of a particular nonce – the number that the miners are computing for. When the pool member finishes the assigned work, he can then place a request for new assignment in a new work unit.

The second method allows pool members to freely choose the amount of work they want without any assignment emanating from the pool. This method will ensure that members do not take the same range.

Reward Sharing
When the block hash has been successfully identified, the pool gets a reward. This reward is then shared using the pool shares mechanism. Shares will disclose just how much work a pool miner's computer contributes to the mining pool.

There are two types of shares – accepted & rejected. Accepted shares show that the work done by a pool miner is significantly contributing to the discovery of new cryptocoins. This contribution will be rewarded.

Rejected shares indicate work that doesn't contribute to the discovery of new cryptocoins. Therefore, this contribution isn't rewarded. A rejected work can constitute successful work that has been submitted late.

Using the accepted shares, members will be rewarded using different methods that include:

• Pay-per share (PPS): This ensures instant payout based on accepted shares contributed. Pool members with accepted shares can withdraw their earnings instantly from the existing balance of the pool.
• Proportional (PROP): Here, the reward offered is proportional to the number of the member's shares to the pool's total shares.
• Shared Maximum Pay Per Share or SMPPS: This is very similar to PPS, but it limits payout to the pool earning maximum.
• (ESMPPS) Equalized Shared Maximum Pay Per Share: This method will equally distribute payments to all miners in the mining pool.
  Other variation of the methods includes (DGM), Double Geometric Method Capped Pay Per Share with Recent Backpay (CPPSRB), (BPM) Bitcoin Pooled Mining and(RSMPPS). Recent Shared Maximum Pay Per Share

Conclusion
Mining has become increasingly competitive. With high-speed devices compatible with home computers, individual mining has become even more hard to profit from. A lot of people now prefer joining a mining pool that allows them get limited profits for a high probability instead of waiting for low-probability high profits.