What are liquidity pools in cryptocurrency and how to make money on them

Mining pool
A pool is a platform with specialized software where miners combine the computing power of their equipment for more efficient mining of a certain cryptocurrency. Mining pools have different systems for calculating rewards, but the most used are only three (PROP, PPLNS, PPS). The most popular pools in 2019-2020 are Poolin, F2Pool, BTC.com, AntPool, ViaBTC.

At the beginning of 2009, after the launch of the Bitcoin project, Satoshi Nakamoto invited everyone to try out a new technology - Bitcoin mining. The conditions were very simple - the user had to have only three things: a computer, the Internet and a client program installed on the computer.

However, over time, the requirements have changed, and now Bitcoin cannot be simply mined alone, not only on a personal computer, but even on a special ASIC device. Solo mining of Bitcoin has become unprofitable and even unprofitable, because the chance of finding the coveted nonce in this case is zero.

The reason for the collapse of solo mining of the most popular cryptocurrency was the emergence of mining pools. In this article we will focus on centralized pools, since this type is the most common at this time. Bitcoin mining pools will also be mainly discussed.

• What is a mining pool?
• How to join the pool and start mining
• Main types Centralized and decentralized pools
• Merge mining
• Multi-coin pools and multipools

What is a pool and how it works

The server that distributes the task of calculating a new block among system participants is a mining pool. As soon as one of them solves the block, all users receive a reward for decryption, in proportion to their contribution. The pool has an owner, to whom miners pay a commission for the mined coins. As a rule, it ranges from 0.3 to 2% of the remuneration received.

The contribution of each participant is determined in “share”. The share is a small share in the search for a solution to the algorithm for calculating the cryptographic key of the block. A mining pool collects user shares and as soon as one of them meets the requirements for signing a new link, the resource issues a reward in proportion to the number of “shares” that the miner transferred to the server.

ZPOOL

Website:

Commission: 1%

Date of foundation: 01.07.2015

Registration : not needed

Cons: Delay in payments; The only guaranteed currency for withdrawal is BTC; The site freezes periodically; Little information about the pool; Large commissions;

Pros: No registration required; Simple interface; Lots of algorithms and coins to mine; Automatic withdrawal of funds; Easy mining setup;

Pool commission: 1% -1.75% (for some coins the FlexFee system works: the higher your hashrate, the lower the commission)

About the pool

Zpool offers 36 algorithms and 290+ currencies for mining. Its distinctive feature is that you receive payments automatically, and you can receive payments in BTC.

This is both a plus and a minus of the pool, since Bitcoin is the only guaranteed currency. You can receive payments in the currency that you mine on the pool, but it is not a fact that this coin will be credited to you.

The conversion of the coin you mined into Bitcoin also takes place on the exchange. We will list the list of exchanges when we talk about the Zpool interface.

Another feature of this pool is that you can configure automatic switching of mining between the algorithms you select. Zpool will automatically switch between most profitable algorithms.

Payments

BTC is the only guaranteed payout currency, but you can set up payouts in the currency you mine (however, it is not a fact that it will be transferred to your account).

BTC payouts are processed once a day for balances above 0.01, for balances over 0.0025 payouts occur several times a week.

Payments for all other currencies are made automatically every 2 hours for all balances above 0.05, for balances above 0.0125 payments occur once every day.

There is an initial delay before the first payout, as the coins you mined must be converted through the exchange and returned to the pool. Usually the first payment comes no later than 24 hours after the start of mining on Zpool. If this does not happen, contact support.

In general, the pool does not stand out among its competitors in any way

The only thing that the pool presents as different from others is the possibility of three types of mining. This is also not new, but quite convenient. True, in this case you have to configure bat files for each mining option.

Is it more profitable to mine alone or in a community?

Cryptocurrency mining in Mining Pool has the following advantages:

• reducing the time required to search for a cryptographic signature;
• distribution of profits among all participants;
• you can be a user of the resource even with very simple equipment;
• making a profit immediately after connecting to the resource.

It is definitely much easier to mine cryptocurrency by registering on a server than doing it alone. Due to the increasing complexity of mining, it is almost impossible to obtain rewards on your own. Even with heavy-duty, cutting-edge equipment, the process of finding a new unit can take more than a year. At the same time, the cost of electricity and the purchase of necessary parts for mining is not always justified.

Zergpool

Website:

Commission: 0.5%

Date of foundation: 01.12.2017

Cons: Guaranteed payments only in the equivalent of BTC, LTC or DASH; Delays in payments; Bugs of the site itself (pages freeze, statistics arrive late)

Pros: Small commissions; Clear and convenient interface; No registration required; Automatic withdrawal

Advantages

Automatic exchange of coins you have mined for BTC, LTC or DASH: already exchanged coins will be sent to your wallet

• Many algorithms (40) and coins (more than 170)
• Redistribution of profits or targeted coin mining
• Small commissions (0%-0.5%)

You can use the pool in three options:

Option 1: Mining a specific algorithm - the pool automatically switches mining to the currently most profitable coin within the specified algorithm

Option 2: Mining a specific coin and paying in the same coin

Option 3: Mining a specific coin and payments with automatic exchange for BTC, LTC or DASH

Minimum withdrawal

BTC payouts for all participants whose balance is above 0.005 BTC are made automatically every 12 hours. For participants whose balance is above 0.0025BTC, payments are made on Sunday.

LTC payouts are made automatically every 12 hours for everyone whose balance is above 0.25. For network members whose balance is above 0.05, payments occur on Sunday.

Payouts for all other currencies are made automatically every 12 hours for everyone whose balance is above 0.001 BTC equivalent. For those whose balance is more than 0.0002 - on Sunday.

BTC, LTC and DASH guarantee coin payouts.

For some coins there may be an initial delay before the first payout. If the delay is more than 24 hours, we recommend contacting support.

In general, the pool does not stand out among its competitors in any way

The only thing that the pool presents as different from others is the possibility of three types of mining. This is also not new, but quite convenient. True, in this case you have to configure bat files for each mining option.

Which pool to choose

To select a pool for cryptocurrency mining, you need to pay attention to:

• the total capacity of the pool - a service with a small indicator will not be able to provide a decent profit;
• the power of the processor and video card of your PC - before starting mining, it is advisable to upgrade the equipment, since with an outdated model it is unlikely to be able to recoup all costs;
• method of distribution of rewards - if you have low-power resources, then it is advisable to choose a service that distributes profits equally among all participants;
• conditions for making payments - what is the commission for withdrawing funds to electronic wallets or a plastic card;
• work during testing - to ensure the effectiveness of the system, you need to connect the equipment to several pools, observe for several days and, based on the test results, select the best one.

Over the entire history of the existence of the concept of a pool, many resources were formed, some of them could not hold on, while others adapted to the conditions and switched to the production of several currencies. Choosing a suitable service is not so easy, since everyone offers more or less the same conditions. But the main parameters of choice still remain: a clear interface and ease of use, site reliability, hashrate, mining of several coins and the ability to monitor the market situation to automatically switch to cryptocurrency mining with more favorable conditions at the moment.

Important! The main thing in the pool is that it does not exceed 51% of the total capacity of the blockchain network, otherwise its integrity and security will be compromised.

Unimining

Website:

Commission: 1%

Date of foundation: 01.09.2017

Cons: Site bugs (freezes from time to time); Quite a large commission (0.9% can be higher); Not a lot of coins to mine (only 40); Statistics freeze

Pros: User-friendly interface; Easy setup; Public information about network participants

UniMining is a set of mining pools based on YiiMP.

This pool was based on the yaamp source code and is now an open source project.

Registration on the pool is not required.

List of coins for mining and commission:

On this resource you can mine 15 algorithms and more than 40 coins. The full list of coins can be found on the main page of the pool.

The commission is the same for everyone: 0.9%.

Minimum withdrawal

Payments are made in the currency you mine and occur automatically every 2 hours for all balances above 0.01. If your balance is above 0.001, then payments will be made for you on Sundays.

For some coins there may be an initial delay before the first payout. If the payment has not occurred after 6 hours, we advise you to contact support in Discord.

Some coins have a fixed minimum payout - this is visible on the wallet page (for example, 5 XVG on a regular payment schedule and 0.5 on Sundays).

UniMining has an average number of coins and algorithms for mining, but the most popular ones are collected. Very simple setup of a bat file + there is a sample on the website.

Payments occur automatically and in the coin you mined. There are no hassles with converting coins to BTC, like on some other pools.

Difference in resources for distribution of reward for a new block

Among the most popular methods used in pools are:

• PPS – Payment occurs for each “share” of the participant that he submits to the system. They use only the largest servers in their system.
• PROP – Payments are made in proportion to correct decisions. The calculation is carried out according to the following method: the total reward is divided into the balls accepted by the pool.
• PPLNS – Pays users for shares that were most recently invested. It all depends on how quickly you carried out the crypto coin mining session.

Suprnova.cc

Website:

Commission: 1%

Date of foundation: 01.03.2013

Registration: Mandatory

Cons: Mandatory registration; The interface is sometimes glitchy

Pros: Stable connection; A large number of coins

Mining pool Suprnova

Suprnova.cc is one of the most popular pools, since today you can mine 46 coins of different algorithms, from the most famous (ZCash, Bitcoin Gold, Ethereum, etc.) to the recently appeared.

The pool was first launched in 2015 and is still working stably. Initially, only one coin was added - Ether, but the pool is constantly expanding, making it possible to mine more and more new coins.

To make payments, the PPLNS payment system is used. In the PPLNS system, payments are based on the blocks found, and in this type of pools the payout may seem low. However, if you do not withdraw funds for a long time, then your rewards will be higher compared to PPS pools.

Another advantage of Suprnova is its support for a wide range of algorithms. For example, YiiMP software does not support Ethash, Equihash or CryptoNight algorithms. But it's all supported by Suprnova and you can see all the supported coins on the pool's home page.

Suprnova's interface is pretty decent and easy to understand. Each coin also has a getting started guide that you will need when starting Suprnova and other MPOS based pools for the first time.

Even though it is difficult for users who are new to mining to set up and use the pool, the guides explain step by step how to mine cryptocurrency on Suprnova. The guide walks you through how to create an account, set up a mining pool, and get started—the mining process itself.

Supernova has some useful tools and features compared to other YiiMP pools, and at the same time, Supernova is quite a flexible pool. All pool support issues are handled through Twitter and sometimes you are asked to pay 0% commission on some coins.

Overall this is a pretty decent mining pool for altcoins. The Supernova pool uses a large number of miners, so it must be reliable.

How to create a pool

Services for joint cryptocurrency mining are created according to the following principle:

1. Write a program for the script code. But to create good software requires knowledge and huge finances, so for beginners it is best to use ready-made templates. But they do not have good protection against data hacking.
2. Create a server on the Internet. To do this, you can rent equipment or purchase it. It is also very important to create a support and technical support service that will answer questions and troubleshoot problems.
3. Resource promotion. Advertising and marketing a pool is an important part of success.
4. Selection of currencies for mining – beginners are recommended to mine little-known digital coins, since the niche of well-known cryptocurrencies in the world is occupied by well-known services.

AngryPool

Website:

Commission: 0.5%

Date of foundation: 01.02.2018

Cons: Few coins to mine; Intermittent freezing

Pros: Automatic withdrawal of coins; Links to online profitability calculators; Easy setup

AngryPool is a fairly young resource for mining cryptocurrencies, allowing you to mine 9 algorithms (39 coins).

Advantages

• Small commissions
• No need to register
• Payments occur automatically
• Easy bat file setup
• There are links to online profitability calculators

List of mining algorithms and fees

AngryPool allows you to mine the following algorithms:

• x16s (0.5%)
• quark (0.5%)
• x16r (0.5%)
• xevan (0.7%)
• x11 (0.5%)
• scrypt (0.9%)
• c11 (0.5%)
• neoscrypt (0.6%)
• lyra2z (0.5%)

Minimum withdrawal

Payouts are made automatically every hour for all balances above 0.001, or on Sunday for balances above 0.0001.

Some coins have a delay before the first payout, please wait at least 6 hours before contacting support.

Blocks are distributed proportionally among the valid presented balls.

This pool is no different from hundreds of similar ones: the commission is kept at an average level, there are not very many coins to mine, but not a few, the interface is standard.

If you like the appearance and interface of AngryPool, you can use it to mine the selected coins.

Nicehash is a great solution for a beginner

For beginner miners and those who do not have time to monitor the cryptocurrency market, the Nicehash service is suitable. It is not a pool in the truest sense of the word; the site is one of the largest markets in the world of crypto mining of digital coins. This resource has an algorithm that can switch production from one type of coin to another. Moreover, the selection of favorable conditions occurs automatically. This takes into account the rate and difficulty of obtaining digital coins. The server supports most mining algorithms and has the most modern equipment. Payments to users are made in VTS.

Nicehash is an intermediary, since it purchases power from other pools, and service participants, connecting their equipment, mine using this purchasing power and receive a reward for the fact that the customer has solved the cryptographic signature of the block.

To get started you need:

• download the system folder to the computer;
• install the program and run it;
• keep your Bitcoin wallet number;
• configure parameters;
• run Benchmark to determine the speeds on each of your equipment.

Despite the fact that Nicehash is a good server, it also has a drawback in its operation, namely: it works on the principle of an auction, where the price for renting your PC and equipment is unknown in advance. Here you can purchase power at a low cost and sell it to other participants on more favorable terms.

BSOD.PW

Website:

Commission: 1%

Date of foundation: 01.08.2017

Cons: Lags and glitches of the site; Delay in payments; Support takes a long time to respond; Little information about the bullet itself

Pros: Large number of coins; Easy setup; Convenient additional services (calculators); Neutral design

bsod.pw is one of the most popular and largest mining pools.

Registration on the pool is not required.

Payouts and minimum withdrawal

Payments occur as follows:

• For all coins every 2 hours, with a balance above 0.1.
• Every Sunday for all coins whose balance is above 0.01

The pool uses a payout system - Prop

It is worth noting that when you initially start mining certain coins, the first payment may be delayed: not after 2 hours, but after 6 hours - then as usual (payments every 2 hours).

The Bsod mining pool is very simple and easy to use. There is no need for registration, no need to manually withdraw coins, and most importantly, setting up Bat files is easy.

We also note that some foreign citizens do not perceive this pool and consider it a scam. They are dissatisfied with the support, some get much fewer coins than according to the calculator, and payments freeze.

It is difficult to talk about the reliability of a particular pool, since at any moment even the most reliable pool can close and disappear with all the coins.

In this regard, Bsod is a little different, since coins are not stored on it, but are sent almost immediately to your wallet.

Independent pool statistics

To find out more detailed information about existing cryptocurrency mining pools, the user can use independent sources. At the moment there are two reliable resources:

• Blockchain.info – provides an assessment of the distribution of hashes between available resources;
• BTC.com. – provides information where you can find out the history for each service.

Note! There are a lot of fraudulent projects on the Internet, and when studying pools you need to pay attention to the server rating and how long it has been running. The longer a pool exists, the more reliable it is, since HYIPs, as a rule, do not exist for more than a year. Reading user reviews will help you save valuable resources such as time and money. You can read opinions using the platforms: bitcointalk.org and forum.bits.media.

Zoin.netabuse

Website:

Commission: 1%

Date of foundation: 01.11.2016

Zoin.netabuse is the official pool created for mining the coin. Mining of this coin occurs only using a CPU processor.

The Zoin mining pool is easy to use and intuitive. You can easily set up coin mining, even if you are new to the crypto world.

A special feature of the pool is that mining coins on it is possible only on processors, and not on the usual and more common video cards. But this will also be an advantage of this coin, since its complexity will not increase in the same progression as the complexity of other coins: everything will be much slower here.

The Zoin mining pool is easy to use and intuitive. You can easily set up coin mining, even if you are new to the crypto world.

A special feature of the pool is that mining coins on it is possible only on processors, and not on the usual and more common video cards. But this will also be an advantage of this coin, since its complexity will not increase in the same progression as the complexity of other coins: everything will be much slower here.

The largest resources for cryptocurrency mining

Top mining pools in 2022:

• F2Pool is a Chinese platform that has been operating since 2013. It has a fifth of the total hashrate. The money must be withdrawn within 90 days, otherwise the funds will be spent on the development of the pool.
• AntPool is also a Chinese resource, but has a Russian-language interface. Withdrawal of funds is carried out without commission.
• BTC China – has a 10-12% share of the hashrate, but is not particularly popular, since the interface is in Chinese and there is no way to translate it into Russian and English.
• BW pool – uses the PPLNS system when paying profits.
• Bitfury is a European platform owned by a company that sells computers and components. There is no possibility for outsiders to use resources.

These services, the largest mining pools, collectively own 50% of the total network power. The remaining pools account for a portion not exceeding 5%.

In addition to the TOP 5, the user can pay attention to other reliable resources:

• Mininggrirentals is an English-language service with an intuitive interface. There is a small commission when withdrawing funds.
• Minergate – you can mine 11 types of cryptocurrencies.
• Zpool – you can work without registration. Has a unique script.
• BitClub Network – you can mine BTC, ETH, ETC, ZEC, XMR.
• Slush is an ancient resource that has been operating since 2010. I mainly mined Bitcoin, but at the moment you can also get other digital coins.
• Eligius – to register, just enter your Bitcoin wallet number.
• io – works on a script algorithm. Has its own currency exchangers.
• Mining Pool Hub is a promising service, suitable for both beginners and professional miners;
• ViaBTC and BTCC Pool have their own exchange.
• BTC.com – the resource has a Russified version.

Dwarfpool

Website:

Commission - 1%

Date of foundation: 01.07.2014

Registration: Not needed

Cons: Payments freeze and statistics are delayed

Pros: Many servers (there are also ones for Russia) Stable connection, no disconnects

Minimum payout:

• Monero XMR – 0.1
• Ethereum ETH – 0.01
• Expanse EXP – 1.01
• Zcash ZEC – 0.01

Dwarfpool is one of the largest platforms. Date of creation: July 2014. The site is monolingual (English only), but the site has technical support in Russian, German and English.

Pool commission. When mining all coins - 1%, the exception is Monero - its commission is 1.5%.

Withdrawals can be set up automatically (up to 6 times a day).

The advantage of Dwarfpool is that withdrawals can occur up to 6 times a day. It also provides slightly more coins for mining than FlyPool, but this is still less than what Nanopool offers.

Otherwise, Dwarfpool is almost no different from similar Nanopool or FlyPool: almost the same commission, easy and simple interface. The minimum conclusions are also almost the same:

Dwarfpool — 0.01 zec Flypool — 0.01 zec Nanopool — 0.02 zec

In essence, when choosing between these pools, you choose the interface that is convenient for you.

Pools for mining Ethereum, Monero, Zcash, Litecoin.

Important! Ethereum is the second most important cryptocurrency and at the moment it is more profitable to mine it than to mine Bitcoin.

We bring to your attention the pools where you can get Ether:

• Ethpool.org;
• ETH Nanopool;
• Ethereumpool;
• DwarfPool;
• Open Ethereum Pool;
• CoinoTron.

Each of these sites is very actively developing and constantly introducing various updates.

Services where Monero is mined:

• monero mining pool;
• minemonero.pro.

Resources for Zcash mining:

• Nanopool;
• suprnova;
• Baikalmine.

Litecoin pools:

• ProHashing;
• LTC.top;
• LitecoinPool.

This is not a complete review of sites. And it is not possible to fully describe all the resources, since there are already more than 1,500 of them in the world.

Earning money through mining can hardly be called a reliable form of income. But many took advantage of it as passive income to supplement their main income.

You may also be interested.

Blockchain 0

Flypool

Website:

Commission: 1%

Date of foundation: 01.03.2014

Registration: Not needed

Cons: Not a large number of coins Periodic freezing of statistics

Pros: Easy setup Minimum withdrawal amounts

Flypool is a quickly customizable and very easy to use pool.

Flypool was created on March 11, 2014. This pool makes it possible to mine a limited number of coins: Zcash, Ethereum, Ethereum Classic. Pool commission 1%.

Payout amounts on Flypool:

• Zcash 0.001 – 10 Zec
• Ethereum 0.01 – 10 ETH
• Ethereum Classic – 0.1 – 10 ETC

pros

• Easy setup
• Minimum withdrawal amounts
• Auto output
• User-friendly design

Minuses

• Not a large number of coins
• Periodic freezing of statistics

Compared to other well-known pools (Nanopool, Dwarfpool), Flypool loses in the number of coins offered for mining, and the main page can confuse an inexperienced miner. However, its big advantage is its well-developed statistics section.

Links[edit]

1. "Individual mining vs. mining pool". 2014-08-30. Archived from the original on March 21, 2015.
2. Ittay Eyal and Emin Gün Sirer: “Majority is not enough: Bitcoin mining is vulnerable. Archived December 3, 2016, at the Wayback Machine" at the 18th International Conference on Financial Cryptography and Data Security (FC). 2014
3. Eyal, Ittai. "The Miner's Dilemma" (PDF). Cornell University. Archived (PDF) from the original on 2017-08-09. Retrieved May 23, 2017. ,In 2015 IEEE Symposium on Security and Privacy (Oakland).
4. Antonopoulos, Andreas M. (2014). Mastering Bitcoin. Unlocking digital cryptocurrencies. Sebastopol, CA: O'Reilly Media. p. 210. ISBN 978-1449374037. Archived from the original on December 1, 2016. Retrieved January 7, 2022.
5. ^ a b Pedro., Franco (2015). Understanding Bitcoin: Cryptography, Engineering and Economics
   . Chichester, West Sussex: John Wiley & Sons. ISBN 9781119019145. OCLC 894170560.
6. Antonopoulos, Andreas (2017). Mastering Bitcoin: Open Blockchain Programming
   . O'Reilly Media. ISBN 978-1491954386.
7. ^ ab Rosenfeld, Meni (November 17, 2011). Analysis of reward systems for pooled bitcoin mining
   . arXiv: 1112.4980. Bibcode: 2011arXiv1112.4980R.
8. "History of Bitcoin Mining Pools".

Possible difficulties

The main obstacle is advertising the pool. New platforms for collective cryptocurrency mining regularly appear on the Internet, but literally after 2-3 months the associations stop working. That’s why it’s so important not only to have a successful start, but also to promote the project.

To read: What is an ASIC miner

A productive advertising campaign is not limited to banners, videos, mailings and announcements on thematic forums. Offer users a minimum commission, a small withdrawal amount and a high hashrate. This is enough to attract miners.

The second problem is scalability. Create a cross-platform platform. Code designed for crypto mining exclusively on Windows or Linux is doomed to failure. Practice confirms that universal software helps attract the target audience.

Independently launching a service for group mining of crypto assets involves technical difficulties: finding a VPS server, setting up the engine, creating a web shell. Cooperation with an experienced programmer automatically eliminates such difficulties.

CONTENT

• 1. History
• 2 Mining pool share
• 3 Mining methods 3.1 Fee per share
• 3.2 Proportional
• 3.3 Bitcoin pool mining
• 3.4 Payment for the last N shares
• 3.5 Single mining pool
• 3.6 Peer-to-peer mining pool
• 3.7 Geometric method
• 3.8 Double geometry method

Personal account miningpoolhub

Let's briefly go through your personal account.

On the account edit page, you can change your login password and reset your PIN code.

Also in the USER ID field you will see a six-digit number, which is necessary, for example, to set up the “Mining Observer” mobile application, available from the Google Play Market at the link https://play.google.com/store/apps/details?id =com.belous.v.miningobserver

With the help of a mining observer configured on Miningpoolhub.com you have the opportunity to monitor the current state of your wallets and the current hashrate.

Page of the current balance of cryptocurrency wallets.

This screenshot clearly shows the process of auto-exchanging mined crypto coins to Zcash.

On the autoexchange page, you configure the final cryptocurrency for which all mined wealth is exchanged and the ability to disable certain cryptocurrencies from autoexchange.

Page for setting up workers for mining with switching based on profitability within the algorithm and multi-algorithm.

Statistics on miningpoolhub.com for the specific cryptocurrency you are currently mining.

In my opinion, these are the most important sections with miningpoolhub statistics and settings. You can view all this in more detail by creating your account.