What is a mining pool? Why most crypto miners work together
By SendPay Business · · 2 min read
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In proof-of-work cryptocurrencies such as Bitcoin, miners compete to add the next block and win a reward. A single small miner might wait years to win. A mining pool lets many miners combine their computing power and share the rewards, so each one earns smaller amounts far more often.
How it works
- Miners point their machines at the pool's server.
- The pool hands out pieces of work and tracks how much each miner contributes.
- When anyone in the pool finds a block, the reward goes to the pool.
- The pool takes a fee and shares the rest according to each miner's contribution.
Solo vs pool mining
Solo mining keeps the whole reward but pays out rarely and unpredictably. Pool mining gives a steadier income in exchange for a fee, usually a small percentage.
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The centralisation worry
A few large pools control a big share of Bitcoin's total hash rate. Individual miners can switch pools at any time, but if one pool grew past half the network's power it could in theory interfere with recent transactions.
Where SendPay fits
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This guide is general information, not legal or financial advice. SendPay Business is a technology company, not a bank, and does not take deposits; regulated services on the platforms are provided by licensed partners. Other companies named in this guide are reference points only and are not affiliated with SendPay Business.