The purpose of a bitcoin mining pool is for a group of miners to join together and form a pool. By combining resources from all clients in that pool, they increase the odds of discovering the solution to a given block. When a solution is found to the block, it rewards the newly issued coin to the pool owner. The pool owner then divides the coins between the miners based on their contribution.

• Pooled mining produces a constant revenue of smaller values, whereas solo mining tends to be more erratic and could take years to mine one block.

• Pooled mining can generate a 1–2% higher income (before fees, if any) due to long polling provided by the pools. Solo mining wastes time due to only supporting getwork pull.

When looking for the right mining pool to join, your goal is to find a fair pool that you can trust to provide you with optimal payouts in exchange for your time and energy resources. Though, the pool you choose, statistically, will not increase or decrease your odds. Choosing the right pool can greatly increase your overall earnings.

10 things to consider when choosing a pool

Reputation

Join a group and see what others are saying about any pool before joining it. You will get the best information from miners who have already tried the pool themselves.

Pool Fee’s

Most pool’s charge a fee everytime a block is discovered. For the highest payout over time finding a reliable pool with the lowest fees is crucial. When making your decision, start with considering pools with no fee at all.

Uptime Efficiency

Do the research before committing to a pool. Make sure they have an uptime of 99.5% or higher, check to see if the pool supports backup servers in the case an outage.

Support and Feedback

It’s important that a pool has an open line for support and feedback in case you encounter technical issues or notice any discrepancy in your payout.

Location/Latency

Choose a pool running on a server near you. If your computer takes too long to communicate with the pools server you will lose precious shares. Shares received after a block change, intended for the previous block, are considered stale and not counted.

User Interface Panel

When choosing a pool, be sure to check their statistics page and API tools to determine which provides a better user experience.

Difficulty

A pool with a higher difficulty means they either there are more miners in that pool or they are using high-end mining hardware. This shouldn’t be a concern when picking the right pool, as the difficulty will adjust based on the shares your hardware submits.

Payout Threshold

Always check a pools payout threshold, If the pool has a high payment threshold, low-end mining hardware may not be feasible.

Pool Hashrate

Comparing a pools hashrate to the network hashrate is a good way to measure how often the pool will discover a block. Statistically, this will average out over time and should not affect your overall payout over time.

Payout/Reward Method

Proportional — In this method, rewards are determined based on a division of rounds, the round is measured by the time separating one block discovered by the pool to the next.

CPPSRB — Capped Pay Per Share including Recent Backpay.

DGM — Double Geometric Method. A combination of PPLNS and Geometric reward models that allows operators to absorb some of the variance risks. Operators receive a piece of the reward on short rounds and replace it on longer rounds to normalize payments.

ESMPPS — Equalized Shared Maximum Pay Per Share. Like SMPPS, but equalizes payments justly among all those who have contributed.

POT- Pay On Target. A high variance PPS method, that pays based on the difficulty of work delivered to pool instead of the difficulty of work completed by pool

PPLNS - Pay Per Last N Shares. Similar to proportional, but rather than paying by the number of shares in a round, it instead pays via the last N shares, disregarding the round difficulty and length.

PPLNSG - Pay Per Last N Groups (or shifts). Comparable to PPLNS, but shares are grouped into “shifts” which are paid in whole.

PPS - Pay Per Share. Each submitted share is worth set amount BTC. Since finding a block demands shares on average, a PPS method with 0% fee would be 12.5 BTC divided by . It is risky for pool operators, therefore the fee is highest.

RSMPPS - Recent Shared Maximum Pay Per Share. Like SMPPS, but system proposes to prioritize the most recent miners first.

Score - Score based system: a proportional reward, but weighed by time submitted. Each submitted share is worth more over time since the start of the round. Rewards are calculated proportionally to scores and not to shares.

SMPPS - Shared Maximum Pay Per Share, works the same as Pay Per Share, but is capped to never pay more than the pool receives.

FPPS —Full Pay Per Share. Similar to PPS，but not only divide regular block reward but includes some of the transaction fees. It Calculates a standard transaction fee based on a previous round and distributes it by hash power contributions. It increases the miners’ earnings by sharing some of the transaction fees

PoS uses a processplus pseudo-random election to choose the validator of the next block, which depends on the amount of tokens that each node has staked. In order to prevent nodes with high stakes from dominating the network, techniques such as Random Block Selection and Room Age Based Selection are generally adopted by the algorithm.

It is generally believed that the higher a node's stake, the more likely it is that the node wants the network to remain secure. In order to launch a 51% attack, a Node would require control of 51% of the entire circulating supply, an expensive proposition, just like PoW. Additionally, if a node behaves dishonestly, all of its staked parts are confiscated by the network, which further incentivizes nodes to stay by the rules.

Since no special material is required to become a validator, anyone availablesant of a simple laptop can join the network as a node. Greater decentralization undoubtedly leads to greater security.

However, just as every coin has two sides, greater decentralization also results in performance issues. The nodes in a PoS network have different hardware metrics, which makes the network as strong as its weakest node. Block validation time may be longer for nodes using obsolete hardware, resulting in an overall increase in confirmation times under heavy traffic. Anyone who's tried to participate in a Neo ICO would know what I'm talking about here!

The PoS family

Efforts have been made by various blockchain projects to remedy the limitations from which conventional PoS suffers, by providing modifications

in the protocol while retaining its basic essence. Daniel Larimer came

with Delegated proof of stake (DPoS) in 2014, which was first adopted by BitShares. Later, other cryptocurrencies like Lisk and EOS also used DPoS.

In DPoS, nodes vote for a number Fixed delegates (or witnesses), who participate in the consensus process and secure the network. The voting power of each node (or stakeholder) is proportional to the number of coins it has. Voting rewards are usually collected by delegates and shared proportionally with theirs respective voters. If an elected node engages in fraudulent behavior, it is immediately kicked out and replaced by another.

DPoS distributes tasks between nodes and delegates. Since ordinary nodes participate only in the block validator election process, transaction times depend only on the performance of the delegates and not on ordinary nodes. Delegates are either motivated to remain honest or they are rejected, which is supposed to add to the overall security of the network.

Another popular variant of PoS is Leased Proof-of-Stake (LPoS), which was developed in 2017. LPoS allows nodes to rent their coins to mini ng nodes, which validate blocks and earn rewards. Mining nodes must wager a minimum number of coins. The rented rooms are locked.stored in the user's account,

and are not physically transferred to the minor. As in other cases, the higher the amount of coins rented from a miner, the higher their chances of winning bulk rewards. Waves was the first project to use LPoS.

Since miners must be online 24/7, every user might not be interested in running a node mining. By allowing users to lease their parts for mining, more nodes can be involved in the overall governance of the network. This increases the degree of decentralization of the network, although it also entails the risk of the formation of mining pools.

Enter SPoS

Supernode Proof-of-Stake (SPoS) is the latest in algorithmPoS-based consensus ithms. It is the brainchild of Sunny King, the creator of PoS himself, and was announced to the public in January 2019. While it retains the fundamentals of PoS (and some of its derivatives), What sets SPoS apart is that it focuses more on hardware upgrades than protocol enhancements.

The SPoS protocol itself requires the supernode hardware to be upgraded as the performance of the blockchain requires. By rem Due to the dependence on ordinary nodes, SPoS claims that constant network performance can be guaranteed even under heavy traffic. V SYSTEMS is the first project to have implemented SPoS.

Ordinary nodes can still participate in the governance of the network by leasing their coins to these supernodes, who distribute the hit rewards proportionally among the pi ownersgot real. The rooms can be rented without giving up their ownership thanks to the technique of Cold Staking. Each user has 2 keys - the typing key, which remains online and allows the coin mechanism to sign newly minted blocks; and the expense key, which is securely held offline, actually “owns” the participation.

Stake owners can also transfer or spend their staked coins whenever they want, encouraging more nodes to stake coins. In principle, this is similar to LPoS, although LPoS does not impose any restrictions on the choice of hardware for mining nodes.

SPoS also supports a new part staking mechanism called Staking 2.0. In ordinary PoS, by staking coins on the network, nodes earn the native coin of the network as rewards (for example, Neo staking allows users toisators to win NeoGas). In Staking 2.0, not only will supernodes win the native blockchain coin, but all blockchain-supported tokens (for example, VSYS staking will allow users to earn both VSYS and IPX from now on). Supernodes are then expected to distribute them all among the stake owners.

Concerns about decentralization

Despite attempts by SPoS for greater decentralization through Staking2.0, it There are concerns about inherently present trends. Compared to Bitcoin or Ethereum which have thousands With minor nodes around the world participating in the consensus, the governance of SPoS is requisitioned by a handful of supernodes.

The owners of the picketswould naturally tend to rent parts from supernodes with a higher rental rate. This would lead to the tendency to create strike pools, and if a supernode ends up assimilating the majority of the coins involved, it can compromise the security of the network as a whole.

With more rooms rented, the rental rate of a supernode would drop automatically, thus ensuring that a balance is maintained and no supernode ends up becoming a player dominant in the ecosystem.

Unfortunately, that still doesn't stop the rogue supernodes from ganging up and trying to take over the network. I had the opportunity to express this doubt to Jacob Gadikian , a blockchain technologist who was part of the SPoS development team

.

According to Jacob, in order to launch such an attack, the supernode (s) should first acquire a sufficient amount of stake. They can earn it by buying the coins on exchanges or by using social marketing skills.

to convince users to rent coins from them.

In the first case, buying such a large amount of coins would drive up the price of the coin, making the attack financially impractical (similar to the argument for Bitcoin) .And in the second case, they would no longer be red supernodes, but rather ecosystem partners chosen by stakeholders e

Thoughts of separation

PoS was an attempt to provide the same security and decentralization as PoW, but at lower cost SPoS further attempts to improve network performance, shifting the focus from updating the algorithm to upgrading.material day

. In the process, they seem to have been more flexible on decentralization. After all, no project has really been able to solve the blockchain trilemma.

Having said that, even PoW is not a guarantee against network attacks. Earlier this year, one of the best -20 ETC (Ethereum Classic) market cap coins have fallen

prey at 51% to nail. It continued for 3 days, resulting in losses in the order of $ 1.1 million. SPoS takes a different approach compared to other variants of PoS

Hey, geeks! Today we’d like to dedicate an article to the origins and history of the most known and popular cryptocurrency — Bitcoin, also answering the question “What is, in fact, Bitcoin?”

We hope you’ll enjoy our small insight as we’ve made it as simple and informative as possible.

Everything started in 1983 when David Chaum and Stefan Brands proposed the very first protocols of “electronic cash”.

Several cryptocurrency concepts were introduced later, and even some market mechanism models were estimated. But only in 2008, the file with the description of the protocol and the working principle of Bitcoin P2P network were published.

The person or even a group of people behind it is still a mystery. The only thing we know about the creator is a pseudonym, Satoshi Nakamoto. In 2009 Satoshi had finished the dashboard, and the network was launched.

The first Bitcoin had been used for purchase in 2010 when Laszlo Hanyecz bought two slices of pizza for 10 000 Bitcoins. Just to remind you, today 1 Bitcoin’s price is about $5300 and the highest value can be over $5800 per 1 Bitcoin.

There are hundreds of other cryptocurrencies: Litecoin, Ethereum, Ripple, and even Dogecoin or Fedoracoin. But Bitcoin is the most widespread of all the cryptos. At the moment, thousands of restaurants and shops worldwide accept Bitcoin as a payment method.

The gold fever

Mining (or so to say Bitcoin production) is a process of solving a cryptographic task. The solution to the task is a symbol sequence found by enumeration. That’s the reason why it is so demanding for huge computation power.

The core of Bitcoin’s system safety is also mining. Basically, miners group Bitcoin transactions into blocks which are then hashed an unbelievable number of times to find one infrequent and eligible hash value. When such a value is found, the block gets “mined” and is put in a chain of previously mined blocks (the blockchain). The hashing itself isn’t useful and is only needed to raise the difficulty of finding the following appropriate hash value. This ensures that no one with unlimited resources could take control over the whole system. For each block mined, miners get a reward. Originally it was 50 Bitcoins per block, but to prevent the uncontrolled emission of the currency the reward drops twice after every 210 000 blocks mined. Each new block appears in about 10 minutes — which means a block can be mined in 9 as well as in 11 minutes. For the ease of calculation, we’ll make it 10 minutes. On that basis, the total number of Bitcoins should be no more than 21 million. About 55% of Bitcoins are already mined, and it is estimated that 99% of them will be mined in 2032.

At the moment, there are four generations of mining hardware (or miners) starting from simple CPU-miners and ending with next-gen ASIC-miners. It doesn’t ultimately mean that you can’t mine Bitcoins at home with your CPU — it just won’t be any profitable.

The first generation: CPU-mining

Profit depends on your processor — a top-class Core i7 would give you around 33 MH/s (mega hashes per second). All calculations are processed on 512-bit blocks of data and contain a lot of different operations. The result of each operation depends on the result of the previous one.

The second generation: GPU-mining

The next generation of miners was based on processes taking place in graphics cards. Such miners contained bitcoin-protocol realisation in Java or Python and an enumeration algorithm in the form of an OpenCL file which should have been compiled accordingly to the ISA of a related GPU.

Miners used different tactics to increase their profits. Some of them played with voltage: some increased it to increase the productivity, others lowered it to save on electricity. Some tried to modify GPU cores and code parameters to augment the flow.

Unlike CPU, which is always meant to stay single, several GPUs can be connected to a motherboard forming a rig. This allowed building first Bitcoin mining farms based on graphics processors.

Typical AMD GPUs demonstrate higher productivity than nVidia’s once we compare GH/s to $ values. That’s why AMD GPUs were and still are quite popular among miners.

The third generation: FPGA-mining

FPGA-mining did not bloom for long as It was quickly replaced by a new generation of hardware — ASIC. FPGA Spartan XC6SLX150 based circuit boards allowed to raise productivity to 860 MH/s with the frequency of 215 MHz, energy demand of 39W, and a price of $1060. Proprietary hardware developed by Butterfly Labs (BFL) from Kansas, US showed the similar productivity of 830 MH/s with $599 price tag. Their best solution was based on the FPGA Altera showing 25,2 GH/s at the cost of $15K (650–750 MH/s per chip).

The main issue of FPGA mining, when compared to GPU, was its cost. On average the cost of FPGA mining was 30% higher. Besides that, GPU boards have greater potential for further reselling once they’re not used for mining any longer.

The fourth generation: ASIC-mining

The coming of ASIC was the end of other types of mining. ASIC miners are significantly different in relation to size to productivity and energy consumption. BFL was the first company to appear on the market and was followed by ASICMINER and Avalon.

The fourth-generation miners were expensive. As the popularity of cryptocurrencies grew, the interest in mining also increased. Not everyone can afford a miner even in its minimal procurement. High hardware prices forced people to find other solutions like hardware downgrading or selling lighter versions of miners. But the price was still quite too high, and users had to deal with all the problems, settings, etc. Cloud mining quickly became an optimal solution opening the world of Bitcoin mining to pretty much everyone.

Cloud mining

Bitcoin mining would become popular only once it was available to every interested person. Cloud mining was exactly that kind of thing. Our project allows users to rent part of our mining hardware power and start earning Bitcoins in just a few clicks. Everything you need is a desire and a few bucks for a start.

After registration, you only need to choose the appropriate mining (be in Bitcoins, Litecoins or maybe Ethereum), connect your wallet and start gaining your first Bitcoins.

The calculator will show your estimated profit, and the graphs will allow you to follow the results in different pools.

You can arrange the rented power among the most preferred pools to maximise your profit. If you realize you need more power, it is always possible to buy more.

Right now, Phanes Technology operates on a whole range of different hardware, including all market’s top and flagman models.