DEFINITION of Mining Pool
A mining pool is a joint group of cryptocurrency miners who combine their computational resources over a network.
BREAKING DOWN Mining Pool
Upon successful output of cryptocurrency mining, the reward is usually split among the miners based on the agreed terms and on their respective contributions to the mining activity through production of valid proof of work.
Anyone who wants to make a profit through cryptocurrency mining has the choice to either go solo with his own dedicated devices, or join a mining pool where multiple miners and their devices combine to enhance their hashing output.
For example, attaching six mining devices that each offers 335 megahashes per second (MH/s) can generate a cumulative 2 gigahashes of mining power, thereby leading to faster processing of the hash function.
While success in individual mining grants complete ownership of the reward, the odds of achieving success is very low because of high power and resource requirements. A mining pool increases the success rate as the cumulative effort leads to better chances of finding a block, though the joint effort comes at the cost of shared reward. (See also: What is Bitcoin Mining?)