People pool their computing resources in mining pools in order to share the block rewards according to the proportion of computing power they contributed. Mining pools can be a better way to mine compared to mining on your own because it means rewards come in more smoothly while also ensuring that the way rewards are paid is a bit more predictable.

Choosing the mining pool you use is really important – it affects how often you are paid for mining, and how much you are paid. Also note that the power in a mining pool really lies with the person who owns it rather than the people participating in the mining pool. You can of course always choose to switch mining pools if you prefer.

The different mining pool reward types

You get all sorts of different mechanisms by which a mining pool shares the rewards for mining with the participants in the pool. Let’s take a closer look.

• CPPSRB. Not used that frequently, CPPSRB stands for “capped” pay per share with “recent backpay”.
• DGM. DGM stands for the “Double Geometric Method”. In essence DGM mixes elements of PPLNS with the Geometric method for assigning rewards. As a result the operator of a mining pool can absorb some the risk associated with variance. On the one hand the pool operator gets a part of the payout on short rounds while it gives this payout back when rounds are longer – by doing this payouts are normalised.
• ESMPPS. This standards for “equalised shared maximum” pay per share.  ESMPPS is very similar to SMPPS with the key difference that payments are equalised to ensure that payments are more fairly distributed amongst the people who are owed money.
• FPPS. Yet another way of looking at PPS, FPPS adds “full” to PPS – in other words, it divides not just the regular block award it also includes an element of the transaction fees. So miner’s earnings are boosted because transaction fees are included in earnings.
• POT. POT is a bit like PPS but in essence somewhat different. It stands for pay on target and it is based on the difficulty of the work that was sent back to the mining pool, rather than the overall difficulty of the work completed by the pool.
• PPLNS. Stands for pay per “last N” share, and is slightly different from proportional in that it doesn’t look at the number of shares across the round but instead consider the last “N” number of shares – ignoring the boundaries of the round.
• PPLNSG. A close cousin of PPLNS, PPLNSG includes a “g” at the end for “groups”. So, shares are pointedly grouped into a set of shifts which are then paid out as a complete whole.
• PPS. Simple and commonly use, pay per share means that every submitted share is worth a specific amount of coin. For operators the risk around PPS is fairly high so in turn operators charge a higher fee for PPS schemes.
• PROP. This is simply “proportional” sharing and means that as soon as the mining pool finds a block, the block is shared amongst the group.
• RSMPPS. Another version of pay per share, in this case “recent shared maximum” pay per share. RSMPPS is fairly close to SMPPS as you can imagine but the “R” means that miners who worked most recently take priority in payouts.
• Score. This system is a proportional reward but the weight is determined by the time that the computing results were sent. So, more recently submitted shares will be worth more than shares submitted earlier. As a result any miner which stops mining in the pool will find that their “score” drops. Consistent miners will get a higher “score” and a higher payout.
• SMPPS. Variation of PPS, except it’s called “shared maximum” PPS which means that the payout is never more than what the pool has earned.
   

Thinking about mining difficulty in the case of Litecoin

In the case of Litecoin mining pools there is no difference in difficulty – you can’t choose between base, standard or normal. So while the difficulty for Litecoin mining pools are measured in the same way it is measured for Bitcoin you will find that the more complex hashing algorithm of Litecoin implies that mining pools need to use a “share difficulty” which is less than 1.

So, Litecoin mining pools have some interesting characteristics when it comes to difficulties. In the first few months of Litecoin mining difficult share was set to either 2-15 or 2-16 or perhaps even lower. GPU hardware’s availability changed matters however so that the mining pools for Litecoin started looking at levels of 2-12.

There was a reason for this: it decreased the use of bandwidth as the higher difficulty meant fewer shares were sent into the mining pool. It’s not a change that had any impact on actual mining rewards it did mean that speed estimates were less precise.

Litecoin miners who were mining slowly would therefore have done better in a mining pool that had a lower difficulty level which meant they got more precise statistics on the work done. Some mining pools tried to overcome this issue by putting together an adaptive system which server units for work that varied alongside the speed that a miner was capable of.

A mining pool comparison list and their statistics

There are a lot of mining pool comparisons out there, but the following is a list of the most common pull pools that are public. You’d obviously need to register an account with the pool and then go ahead to configure your miners on the actual portal page for the pool. Note the difference in payout methods and pick the pool with the method that suits you best.

P2Pool

As an alternative you could choose a P2Pool public node. We list the nodes you can use a member of the public, without prior registration. You simply need to include your Litecoin address in the space provided for the username, you can add anything as the password.

It’s easy to swap P2Pool nodes so most people would recommend that you actually set up an alternative P2Pool as a backup service on your mining kit so that you don’t end up stopping your mining when a P2Pool is not available.

Note that P2Pool have a standard payout method – it’s all PPNLS. Like we explained above the PPLNS payout is very much like the standard proportional method with the exception that it examines the last “N” shares rather than all shares, with “N” set by the pool owners.