Where can Bitcoin and Ether be mined in 2020? Here are the main tips on mining pools and what you need to know before you join one.
Over the last few months, miners around the world have been extremely active, which can be seen through spikes in hash rates that coincided with a significant increase in cryptomone prices. In early 2020, Ether (ETH) could be bought for USD 130, and now, ETH has reached USD 500. The king of cryptomonies, Bitcoin (BTC), added almost USD 10,000 to its price.
So how can users interact with the industry? What has been obvious for some time is that mining alone is not the way forward. For Bitcoin, Ether and all the major altcoins, the block chain is built in such a way that the complexity of finding blocks is constantly increasing, which means that a couple of graphics cards are not powerful enough to generate a block.
The point is not that the computer is not powerful enough to mine Ether, but that it is mathematically impossible. A computer can stay there looking for a block for several months. If we’re talking about mining Bitcoin with an ASIC, it will take even longer. It’s easier to go bankrupt by buying equipment and paying for electricity than by mining cryptosystems alone. The calculation is simple: divide Ether’s total hash rate by your hash rate and you get the number of seconds it will take on average to find a block.
So, it seems logical that miners flock to mining pools, especially today, as even non-mining companies are starting to launch such products. For example, Binance recently launched its own mining pool for Ether.
What do you need to know before joining a mining pool?
A mining pool is a server that combines the computing power of all participants connected to it. The miners join the group via the Internet and reassign their hardware to the group. They jointly perform mathematical solutions to find blocks of a specific cryptomat. When the group finds a block, the group gets a consensus from other network participants and then receives a reward. This reward is shared among all group members according to the amount of hash rate they provided.
Before selecting a pool, it is important to know its size. When a pool grows, the chances of discovering a block increase. But the more people who join the pool, the less profit each participant receives. This is a double-edged sword: small but frequent payments, or larger but less frequent payments.
Before joining the pool, users must find out the minimum payment, which is the minimum amount of the crypt currency that must be mined before it is sent to the users‘ wallets. If the minimum payment is high, then the user will have to be part of the pool for a long time before receiving income.
Another important fact to mention is that participation in any pool is not free. Users pay a certain percentage of their income to participate. Usually this fee varies from 1% to 3%. In general, participation in any pool does not require serious investment and knowledge, if the user has already set up a team, then it will not be difficult to determine which pool to choose. This is what you need to pay attention to when choosing a pool, regardless of the cryptology currency to be mined:
The number of participants in the pool, which affects the individual income.
Ping time, or delay time, which is the result of the user’s computer needing to transfer information to the pool. Ping time depends on the territorial distance: the lower the ping, the shorter the time delay and the faster the data is transferred. A high ping is not appropriate because there are pauses between block changes in the cryptosystems, and with a high ping, the user’s computer can go over the values of the old block and mine in vain. A comfortable ping is usually up to 10 milliseconds;
The minimum payment size, which should not be too large, otherwise the payment may not be made for a long time.
There are many pools that are fraudulent or take a larger amount of revenue. Users should know their reputation in advance.
After setting up your team, it’s time to choose a mining pool. Of course, most work for Bitcoin or Ether mining. Below are some of the most popular pools used to mine the two main cryptosystems. For Bitcoin, almost all of the main pools are based in China, which is not surprising as the country produces most of Bitcoin’s mining hardware.
Founded in 20013, F2Pool is one of the oldest pools in China, and one of the main interests among Bitcoin miners. The pool represents almost a fifth of the total amount of BTC mined, and uses Pay Per Share+, or PPS+, as a payment model in which the miner receives a reward for every share accepted by the pool, regardless of the blocks found. The pool determines the cost of each share independently, taking into account the complexity of the network, the reward, the time of the block and the pool’s own power.
In addition to Bitcoin, the pool mines more than 40 coins. The commission, depending on the currency, ranges from 1% to 5%. As for Bitcoin, the pool takes 2.5% of the rewards as commission and payments are made once a day. Users must withdraw the money earned within 90 days, otherwise the pool will keep it for the development of the service.
Poolin is owned by the parent company Blockin which was launched in 2017. The pool is popular with Bitcoin miners. Poolin offers plenty of coins to choose from: Ether, Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC), etc. Commissions are not fixed; rather, they are set for each cryptomint separately, with a 2.5% commission for BTC.
The payment model depends on the currency chosen: PPS or Full Pay Per Share, known as FPPS. Under the latter method, the group also distributes transaction fees to miners, which adds between 10% and 20% to their revenues. This method is used to pay for Bitcoin mining.
A notable feature is that Poolin provides mining on ASICs and GPUs from Nvidia and AMD. The development team regularly updates the software every two weeks to ensure the stability of the service.
BTC.com is one of the largest international pools for cryptomint mining. It is controlled by the well-known mining equipment manufacturer Bitmain, which produces a line of ASIC miners under the brand name Antminer. The China-based platform was launched in 2013.
The commission for each block mined by the pool is set at 4%. In addition to Bitcoin, other cryptosystems can be mined through BTC.com, including Bitcoin Cash and Litecoin. The representatives of the mining pools keep records of their users‘ earnings.
AntPool is a Chinese project launched in 2014. Like BTC.com, Bitmain controls the pool. In addition to BTC, AntPool can mine seven other crypt coins, including the privacy oriented coins Dash and Monero (XMR).
Payments are made daily and the service has low fees, some payments are made without fees. At AntPool, payments are primarily made using the standard method, Pay Per Last N Share, or PPLNS, where users are paid for the last share according to the fate of the pool.
With this method, there is no fixed payment for the share and the main problem is the speed of finding a block. When a pool uses the PPLNS method, the payment comes from „time shifts“ between searching for two blocks. This means that if the block is not found for a long time, the payment increases gradually.
A distinctive feature of the pool is the ability to work in „solo“ mode, but not in the literal sense. The pool allows for „solo“ mining through joint efforts. This means that the user whose equipment has discovered the block will receive payment.
SparkPool is registered in China and was launched in January 2018, a year and a half later, the pool entered the lists of leaders in mining Ether. In addition, SparkPool allows the extraction of coins as the Common Knowledge Base (CKB) of Nervos, Grin and Beam.
Mining is done using the Ethash algorithm and payments are made using the PPS+ method. Payments are made every day, according to Singapore Standard Time, and the minimum amount for payments is 0.1 ETH. On the 28th day of each month, funds are automatically withdrawn if the balance is greater than 0.0105 ETH and the withdrawal fee is 1%.
Registration in the pool is optional. Users can mine anonymously, but if so, not all pool functions will be available.
Ethermine is one of the most popular pools in Ether mining. This pool is the largest for Ethereum. The pool servers are located in Europe, Asia and the United States.
The pool uses the PPLNS payment model. The minimum payment amount is the equivalent of 0.5 ETH and the maximum amount is 10 ETH. There is no commission for the withdrawal of funds, and payment is made instantly if the blockchain network is stable. The pool is intended only for mining crypto-currencies with GPU processors.
SpiderPool is a five-year Chinese project which only supports four currencies: ETH, BTC, BSV and BCH. However, the pool is quite popular among Ether miners.
There is not much information available to non-Chinese users, but the pool fee is 2%. The minimum payment amount depends on the currency, but once a week, users can request an amount that is below the minimum threshold. Otherwise, payments are automatically made once a day.
Nanopool specialises in coins that are mined mainly with graphic cards. It currently supports Ether, Ethereum Classic (ETC), Zcash (ZEC), Monero, Ravencoin (RVN) and Pascal (PASC) mining. The pool allows users not only to mine a single cryptomint, but also two different cryptomints simultaneously, with a proportional distribution of power between them. Like any other mining pool, Nanopool has a commission that is charged according to the income of its users. The group uses the PPLNS payment method.
Ether’s withdrawals from a miner’s account to his wallet are made at Nanopool automatically when the minimum payment, which is 0.05 ETH
Nanopool does not have a clear payment schedule, but payments are made in several stages throughout the day. As soon as the miner’s account balance exceeds the established minimum value, it will be paid out during the next round of payments.
To mine or not to mine?
When choosing a pool, each person should pay attention to the list of available coins to ensure that the currency of their choice is on the list. In addition, you should consider the payment and commission model, as a pool that offers the lowest commission and pays for transactions is preferable. Another problem is the proximity of the pool servers: the closer you are to the server, the more stable the mining process will be.
In general, it can be said that no matter what currency the user chooses, he is unlikely to lose when using a mining pool. According to Chun Wang, co-founder of F2Pool, the entire mining industry is currently on the rise:
„Mining of Bitcoin and other crypto currencies continues to grow, just like last year. Thanks to DeFi, there has been a period of high transaction fees on the ETH network in recent months, which led to much higher than usual revenues from ETH mining. People were attracted to buying related mining machines to mine ETH. With the decline in mining revenues, miners‘ passion for involvement in ETH mining has recently faded. But the rapid increase in the price of BTC and other currencies makes mining more profitable, more people are now willing to participate in mining.