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Why did the miner go to the pool party?
Because it was overheating mining solo.
You ever thought about mining some Bitcoin?
Well if you have, there are many factors to consider.
The 2 main factors to decide on initially:
- Hosted operation
- Solo operation
Which basically means, “Will you pay for a machine that a 3rd-party will physically hold and join the benefits of a mining pool,
Or be independent and try to start your own pool?”
You may be asking, “What are mining pools?”
It is an important question, because it can dictate the rewards and success of your Bitcoin mining operation.
A pool is fundamentally a team of attempted guesses at current the target hash.
Teamwork makes the dreamwork, and this most definitely applies to Bitcoin mining.
In a mining pool, users contribute their hash rate(think guesses per second) to a pool of other miners. The pool gives each miner different assignments to work on in an attempt to collectively find the winning guess and be rewarded the block subsidy.
When a single pool miner wins a block, the reward gets distributed according the hash rate contributed. I.e. if miner A expends more hashes than miner B, miner A gets paid more.
This is great for remaining competitive as a freelance miner, as each member of the pool gets more consistent and frequent rewards than if they were mining alone(unless that had an abundance of hash power).
Now picture the lone miner. The lone miner is competing against all pool miners in the network. It’s like trying to solve a complex math problem all by yourself instead of teaming up with the smart kids in class.
The lone miner may get lucky and solve a few blocks a year, but that is a very sparse payment schedule considering it’s eating your power bill 24/7.
Now that’s not to say you can’t build your own pool by drafting your lone miner some teammates, but bigger operations of course include higher expenses and maintenance.
Some important information to consider when embarking on the investment journey of Bitcoin mining. It makes a lot of sense if you want to get a BTC cheaper than $50k.
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