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?)

RELATED TERMS
  1. Mining

    Mining validates transactions on the cryptocurrency network and ...
  2. Proof of Capacity (Cryptocurrency)

    Proof of Capacity consensus mechanism uses a mining node’s hard ...
  3. Litecoin Mining

    Litecoin mining is the processing of a block of transactions ...
  4. Bitcoin Mining

    Bitcoin mining is the process by which transactions are verified ...
  5. Application-Specific Integrated ...

    An application-specific integrated circuit (ASIC) is a piece ...
  6. Target Hash

    A target hash is a number that a hashed block header must be ...
Related Articles
  1. Tech

    How to Get Established as a Cryptocurrency Miner

    Mining for cryptocurrencies may sound like a good idea. But is it worth the effort?
  2. Tech

    How to Choose a Cryptocurrency Mining Pool

    Here are some selection criteria cryptocurrency miners should consider before joining a crypto mining pool.
  3. Tech

    Are Large Mining Pools Bad For Cryptocurrencies?

    Cryptocurrency mining are being done on expensive mining pools run by large firms. Is this bad for cryptocurrencies?
  4. Tech

    Is Solar-Powered Cryptocurrency Mining the Next Big Thing?

    In the search to make cryptocurrency mining profitable, some operations are looking to solar power.
  5. Tech

    How Much Does It Cost to Mine Bitcoin Around the World?

    Bitcoin mining costs vary widely in 115 countries, according to a new study.
  6. Tech

    Mining Bitcoin From 21 Miles Above the Earth

    Miner One launched a balloon supported a device that mined bitcoin from 21 miles up.
  7. Tech

    How to Mine Ethereum on Your Computer

    You can get ether by buying it on the open market, accepting it as payment--or by mining it yourself. Here is how to do the latter.
  8. Tech

    Hackers Target Computer Rigs to Illegally Mine Cryptocurrencies

    Hackers are now stealing random people's computer power to mine digital tokens in an alarming new trend.
  9. Tech

    Bitcoin Mining a Money Loser Below $8,600: Report

    Analysts at Morgan Stanley expected bitcoin mining hardware demand and price to continue to fall.
  10. Tech

    Montana Will Build $251 Million Cryptocurrency Mining Farm

    Power Block Coin plans to launch a cryptocurrency mining farm outside of Butte, Montana.
RELATED FAQS
  1. What is the metals and mining sector?

    Learn about the mining sector and the many ways that mining companies profit from the location and extraction of minerals ... Read Answer >>
  2. What value metrics are best for analyzing companies in the metals and mining sector?

    Learn what some of the best valuation measures are that analysts commonly use to evaluate companies in the metals and mining ... Read Answer >>
  3. What is the long-term outlook of the metals and mining sector?

    Take a look at the long-term outlook for the metals and mining sector as reported by the industry agency council of the World ... Read Answer >>
  4. How much of a diversified portfolio should be exposed to the metals and mining sector?

    Learn what criteria investors use to determine what percentage of their diversified portfolios should be exposed to the metals ... Read Answer >>
Trading Center