Earnity and Dan Schatt: What Are Mining Pools

One of the first decisions that prospective cryptocurrency miners must make, according to Earnity’s CEO Dan Schatt, is whether to mine alone or as part of a ‘pool.’ There are numerous arguments for and against mining pools. So, if you want to join a mining pool, think of it like a lottery syndicate – the benefits and drawbacks are the same. You won’t have to share the reward if you go solo, but your chances of receiving one will be lower. On the other hand, a pool has a much better chance of solving a block and winning the prize, though the members must split the reward. Here are some additional facts about mining pools you should be aware of:

Definition

A mining pool is a network of cryptocurrency miners pool their computational resources. It increases the chances of discovering a block or otherwise successfully mining for cryptocurrency.

How Do They Work?

Mining pool participants each contribute their processing power to the effort of finding a block. If the pool completes these tasks successfully, they receive a reward, usually the corresponding cryptocurrency.

Those who contributed will receive the distributed rewards based on the proportion of each individual’s processing power or work relative to the entire group. However, individual miners may be required to show proof of work in some cases before receiving their prizes.

What are The Benefits?

While success in individual mining grants complete ownership of the reward, Dan Schatt, CEO of Earnity, points out that there is only a slim chance of success due to the high power and resource requirements. Furthermore, as their popularity has grown, many cryptocurrencies have become increasingly difficult to mine. As a result, the cost of the expensive hardware and electricity required to be a competitive miner frequently outweighs the potential rewards.