What Is Mining Pool?

The most direct definition of mining pool in regard to trading/transactions involving digital currency mining, we’re referring to the necessary computer power and resource pooling contributed by “miners” who cooperatively share PC processing power in order to effectively generate the complex transaction and block location processes. In addition to this cooperative effort, mining “rewards” are distributed in direct proportion to the amount of work required when accessing a block and an additional reward is available in the mining pool to miners who can demonstrate digital proof of their work. “Pooled” cloud mining originated when mining complexity increased so significantly that the process effectively negating the ability of slower miners to form a block. The solution to the complexity issue presented itself when individual miners began to pool assets and effectively create blocks in a timely manner, allowing for regular cryptocurrency shares at dependable intervals.

“Cloud mining”, therefore, can be defined as cryptocurrency mining utilizing the shared computing power of large, remote data centers. This new type of “shared service” cloud mining allowed individual miners to access and trade altcoins without having to incur the massive expense of purchasing their own mining equipment. Cloud mining rigs are typically housed and run in large remote data centers owned and operated by mining organizations, which require the “client” to enroll in their service to access/purchase mining contracts. Because this type of cloud mining is a service, however, some additional costs are involved, which may translate to a slightly lower investment rate.

Available options for hosted cloud mining hardware are-

  1. Rent a dedicated physical mining server or a virtual private server

  2. Purchase and install mining software for your private PC

There are mining organizations which offer hashing power to service users—available for purchase in Gigahash/seconds (GH/s)—that access the organization’s remote data centers. Miners can select between an available data plan or may be able to exchange hashing power in certain cases.