ViaBTC | Payment Method — A Key Indicator Deciding Miners’ Income
When Bitcoin was first here, the concept of a mining pool did not exist. Meanwhile, few people paid attention, and those that did often regarded the cryptocurrency as a pure scam. For them, mining Bitcoin was simply a joke. Against such a backdrop, the cost of mining Bitcoin was virtually zero, and you could get dozens of coins a day using any computer. However, as the BTC consensus improved, mining Bitcoin has become increasingly difficult, which ended the era of solo mining and gave rise to mining pools.
However, mining pools charge fees to maintain their normal operation while providing technology and services. The pool industry has witnessed 12 years of growth since the first pool was created in 2010. During this period, a wide range of payment methods have been created and outdated according to different demands from miners. The five primary payment methods remain include PPS, PPS+, FPPS, PPLNS, and SOLO. It should be noted that the mining profit differs when mining in different pools and by different payment methods.
Introduction to different payment methods
Pay Per Share (PPS): The pay-per-share approach will liquidate the mining revenue based on the submitted hashrate, mining difficulty, and block reward. After deducting the transaction fee of the mining pool, the payment shall be made with the miners for their contribution to the block generation probability. This model allows for the least possible variance in payment for miners while also transferring much of the risk to the pool’s operator. Even if the pool does not mine any block for the whole day, the miners still make a constant profit.
Pay Per Last N Shares (PPLNS): The pay-per-last-N-shares method will calculate the miners’ reward based on their contribution to block generation in the past period of time. After deducting the transaction fee of the mining pool, the payment shall be made with the miners. Under this approach, the miner’s profit is completely related to the actual profit of the pool, and if no block is generated, there will be no profit nor reward for the miners. In contrast to the PPS model, the actual revenue earned by miners under PPLNS is less stable.
PPS+ (Pay Per Share+): The mode is a combination of PPS and PPLNS. In other words, it adds another part of yield on the basis of PPS. Under PPS+, the miner fee charged by the pool will be distributed according to miners’ hashrate share.
FPPS (Full Pay Per Share): Compared with PPS, this model introduces another addition of mining yield. FPPS differs from PPS+ in that the yield is distributed according to the average miner fee of the entire network on a day.
SOLO: Under this approach, the miners conduct mining independently and receive the full rewards for the blocks generated, whereas the mining pool charges a certain fee for the operation and maintenance procedure. This method is more suitable for miners with a high hashrate share. If users have a relatively small hashrate share, going solo is not recommended.
Modes supported by major pools for mining some cryptos
Fees charged by major pools
Though these pools focus on different payment methods, it should be noted that ViaBTC Pool features the most diversified selection, which fully meets different demands among miners. In terms of fees, AntPool’s PPLNS mode has the lowest rate (0%, according to the official statement), but as we discussed earlier, your profit under PPLNS is fully dependent on the earned daily income of a pool. If no block was mined, then you will not receive any profit at all. Therefore, PPLNS is riskier compared with other modes.
Additionally, if you wish to reduce your mining costs, you can always pay attention to the latest events launched by pools. Generally speaking, a pool would launch several events every year, covering crypto rewards for mining, 0 mining fees, referral commissions, etc. For instance, the “Referral Commissions for Ambassadors” campaign that ViaBTC recently kicked off offers a great way to lower your entry cost. Once you become a ViaBTC Ambassador, you could get lifetime referral commissions of 20% by referring ViaBTC Pool to your friends.
In conclusion, if you plan to lower your mining cost and earn stable profits, in addition to weighing the pros and cons of different pools and picking the right payment method, you should also keep track of the latest events that they’d launch from time to time.
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