Ethereum Mining Pool – What is it and should you use one?

Once you have established yourself as an ethereum miner and have purchased all the necessary equipment to build a suitable ethereum rig, you need to determine if you wish to remain a solo miner or become a part of an ethereum mining pool.

Each of these options has benefits and consequences and is dependent on your personal requirements and to some degree on the processing power of your ethereum mining hardware.

What is an ethereum mining pool?

A mining pool is when a group of solo ethereum miners join forces and combine their processing power for quicker mining results. The shared processing power helps to solve blocks faster and miners can see results quicker than when they mine solo. Each of the contributing miners is paid a share of the block based on their contribution.

The hashrate of the rig is determined by the processing power, so the increased resource of pooled ethereum rigs will result in more blocks generated in a shorter period of time.

Ethereum mining pools calculate payouts on different methods.  A PPLNS payment basis, (Pay Per Last “N” Shares) involves some luck but offers on average 5% more than PPS (Pay Per Share) where you get a standard payout for each share completed.

Some pools also run on a predictable solo mining method where the person who contributed the most to the block gets the whole block.

It is important not to confuse ethereum mining pools with ethereum cloud mining. With cloud mining an organisation will own the rigs and do the mining on your behalf and pay you dividends, for mining pool each miner needs to own their own equipment and have software that enables them to join a pool and then earn a share of the blocks mined.

Best ethereum mining pool 2017

The top ethereum mining pool for 2017 is reported to be the joint mining pool of Ethpool and Ethermine. The two have separate sites and different payment methods (PPLNS and predictable solo) but the underlying pool is shared and currently makes up just over 25% of the hashrate network.

Ethermine has over 63000 active miners and Ethpool 1200. Combined they mine over 50 blocks per hour.

F2Pool, also known as Discus Fish, (contributing 21.6% of the hashrate) is based in Asia and Dwarfpool, with servers in Canada and France,  (13.3% hashrate) are in second and third place respectively

A single mining pool should never exceed 50% of the hashrate network.

Read more about Ethpool vs Ethermine or see our full post on the top ethereum mining pools

Ethereum Mining Pool vs Solo Mining

As with any option there are positive and negatives for choosing to join a mining pool versus mining solo. When mining solo you do not need to share your rewards with anyone but the chances of earning are significantly reduced and the time from investment to reward can be far longer.

The more mining pools in play, the more hashrate of the network the pools are using and the more difficult it becomes for solo miners to get blocks.

Solo mining is not recommended unless you have processing power over 100mhz.

To calculate the mining profits expected, use the ethereum mining calculator.

Choosing a mining pool

The most important factor in choosing a pool is the reliability of the pool and their reputation for paying correctly. The bigger pools would not have been successful if they did not meet the criteria of their miners so it is always safer to go with the well known.

However there are many ethereum pools available and the payout rates are different, so you may find it more profitable to choose a smaller pool and take the risk.

You should also consider investing in an ethereum hardware wallet as a safe place to store your ether.

Ethereum Rig – Overview and Introduction

If you’re seriously thinking about mining your own cryptocurrency, you’ll need to invest in some serious hardware.

In this post we take a look at an Ethereum Rig, including what it is, where you can buy one, or if you are technically savvy, how you can build one yourself.

Ethereum Mining

For those that are completely new to the topic… Ethereum is an open-source, public, Blockchain-based distributed computing platform featuring smart contract functionality.

Ethereum Mining can be simply understood as solving the problems in this platform by coming out with secure and reliable solutions. In the process of mining, you can get in to the platform with your account and collect ethers – ETH, cryptocurrency units.

(See Ethereum explained in more detail here)

What is an Ethereum Rig?

An Ethereum Rig can be broadly described as the computer infrastructure (hardware, software, and network) set-up to carry-out Ethereum Mining.

Ethereum Mining requires heavy and intensive computational power by way of computer processing power, memory power, storage capacity, electricity etc., simply, the Ethereum Rig provides this power.

If you are interested in doing Ethereum Mining yourself, well, you need an Ethereum Rig set-up in one way or other.

Just to make it clear, ethereum mining hardware is required only for those who are doing mining themselves; it is not necessary for Ethereum investors. An easy way for investing in Ethereum is buying it through online exchange.

A quick guide on building a GPU Mining Rig on Amazon

Once you have your rig, you can decide whether to mine on your own, or to collaborate with other people in an ethereum mining pool.

Further, using an ethereum mining calculator will help you to understand how profitable your chosen approach will be.

Getting an Ethereum Rig

We can get hold of a rig either by:

  • buying it as a rig with hardware and or software components
  • or choose to buy computer hardware parts like processor, CPU, graphic processor power/ GPU, RAM etc., assemble them and install software as required
  • or even go for a Ethereum cloud mining service.

Mind that the choice of hardware and Ethereum Rig plays a crucial role in Ethereum Profitability. The major cost for us to do Ethereum Mining is the cost of rig and running cost of electricity power.

The value of Ether is going up and the current cost can be seen here. In the recent past, the value of Ethereum has multiplied six fold!

Ethereum Mining Rig Components

The major components of a typical Ethereum Rig are:

  • MotherBoard / CPU – process and allow parts to communicate
  • Graphics Card / GPU – process the PoS Proof-of-Stake algorithm
  • Storage (HDD/SSD) – store the Blockchain and verified transactions
  • Memory (RAM) – provide program working memory
  • Power Supply (PSU) – provide power to the rig and its part

Online resource for reference: How to build an Ethereum mining rig

Final thought: Ethereum Rig

Ethereum Mining is a time and energy intensive work undertaken by enterprising geeks, coders/programmers or by anyone interested.

Many miners consider it to be more stimulating and rewarding htat simply investing in Ether.

The right Ethereum Rig plays a major part in realising and maximising the rewards. A careful study is required to decide on suitable Ethereum Rig that can enhance Ethereum Profitability. This article has thrown some light on Ethereum Mining in general and Ethereum Rigs in particular. There are other things you may want to consider, such as whether you will store your coins online, or on an ethereum hardware wallet.