Mining for cryptocurrency is popular way for to generate revenue using the computing power and specialist mining hardware. There are many ways to do this, and this article will focus on the PPLNS payment method that is offered by some mining pools.
PPLNS Payment Method
Although there are many solo miners that work on their own, there is growing trend to join pools, where miners combine their resources and computing power to increase the number of transactions that can be completed in a given period, resulting in more income.
As the pools gain more popularity, the amount of resources needed by solo miners to compete increases and this becomes expensive and the ability to compete for transactions more difficult. When miner’s work alone, the calculation of the split of the coins earned for a transaction completed is simple, they get 100%.
However when a pool of miners (more than one) has contributed to the calculation, the income generated needs to be split amongst all those involved. The two most popular forms of revenue division are PPS and PPLNS.
What does PPLNS stand for?
PPLNS is an acronym for “Pay Per Last N Shares” which calculates your average contribution over a period of time. This ensures that miners loyal to specific pool will earn on average more than miners that hop from pool to pool.
There is an element of luck involved with the PPLNS payment method as the amount of contributors in a pool can fluctuate over a period of time, but in general PPLNS payments will be about 5% higher than PPS payments for the same amount of transactions completed.
PPLNS vs. RBPPS
PPS stands for “Pay-per-Share” which simply calculates the percentage due to each miner based on his or her share of contributed resources to the completed transaction. This is a simple calculation that can be easily forecasted and measured and pays for every share submitted. RBPPS stands for “Round Based Pay per Share” which is very similar to the PPS payment method, but will not pay for orphaned blocks (blocks that are valid but do not belong to the main chain).
PPLNS Mining Pools
When joining a mining pool it is important that miners know what payment method the pool is using and that it meets their execrations and matches their mining activity.
Most mining pools use the PPS method to calculate payment but Ethereum mining pools that use the PPLNS method include:
- Ethermine, the largest PPLNS Ethereum mining pool with over seventy-four thousand active miners.
- Ethfans, the largest Chinese speaking Ethereum mining pool, based in Asia
- Antpool, which pays on the PPNLS, PPS and Solo method and allows miners to mines for Etheruem, Bitcon and other cryptocurrencies
- Nanopool also mines for multiple cryptocurrencies with servers based across Europe and Asia and just over 50 000 active miners. See our recent article on Nanopool vs Ethpool.
Payout schemes are one of the main considerations when weighting up different pools like Ethpool vs. EtherMine.
For miners that wish to stay with a specific mining pool and are looking for bigger payouts over a long term period, pools that offer PPLNS are a better choice than those that pay on the PPS or RBPPS method. The risk with PPLNS is that your payments could fluctuate by more that 30% over the short period (up or down), but in the long run you will do better.