Mining pool reward FAQ - Revision history

Bayer: /* What reward systems are there? */

2025-03-17T22:10:18Z

What reward systems are there?

← Older revision		Revision as of 22:10, 17 March 2025
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	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. The Pool Operator often takes a relatively large fee, due to the fact that they cannot know how much will be paid in total to all the miners.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. The Pool Operator often takes a relatively large fee, due to the fact that they cannot know how much will be paid in total to all the miners.

			:'''Full pay per share''': Fixed reward per share including a share of transaction fees. Virtually 0 variance, and typically lower pool fees than Pay per share (PPS).

	:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted.		:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted.

Gmaxwell: fix links

2019-06-10T01:40:46Z

fix links

← Older revision		Revision as of 01:40, 10 June 2019
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	== Show me some examples and assist in clarifying what it all means... ==		== Show me some examples and assist in clarifying what it all means... ==

	===== [http://~~forum.bitcoin~~.org/index.php?topic=6667.msg233175#msg233175 Quote from: SoreGums on 2011/06/18 at 05:09:43 pm] =====		===== [http://bitcointalk.org/index.php?topic=6667.msg233175#msg233175 Quote from: SoreGums on 2011/06/18 at 05:09:43 pm] =====

	so what am i missing with this:		so what am i missing with this:
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	sorry if this has all been covered elsewhere - most everything else I've read regarding payouts is not as simple as what I have put above		sorry if this has all been covered elsewhere - most everything else I've read regarding payouts is not as simple as what I have put above

	===== [http://~~forum.bitcoin~~.org/index.php?topic=6667.msg233652#msg233652 Quote from: ewal on 2011/06/18 at 06:48:11 pm] =====		===== [http://bitcointalk.org/index.php?topic=6667.msg233652#msg233652 Quote from: ewal on 2011/06/18 at 06:48:11 pm] =====

	What you described is a transitional proportional payout scheme. Your payout is proportional to the amount of work that you did for any given block.		What you described is a transitional proportional payout scheme. Your payout is proportional to the amount of work that you did for any given block.

Luke-jr: /* What reward systems are there? */

2011-06-27T22:22:50Z

What reward systems are there?

← Older revision		Revision as of 22:22, 27 June 2011
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	The main reward systems used are:		The main reward systems used are:
			:'''Maximum pay per share''': Every share submitted receives a fixed value known in advance. The value is rewarded to the miner to the extent that the pool has funds to cover it. When it does not, the remaining value is stored as extra credit which the pool may pay in the future when it has sufficient funds. This has virtually 0 variance and is thus good for beginners.

	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. The Pool Operator often takes a relatively large fee, due to the fact that they cannot know how much will be paid in total to all the miners.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. The Pool Operator often takes a relatively large fee, due to the fact that they cannot know how much will be paid in total to all the miners.

SoreGums: add the examples

2011-06-17T21:04:44Z

add the examples

← Older revision		Revision as of 21:04, 17 June 2011
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	Increasing the size of the pool will always decrease the variance, but at some point you will have diminishing marginal utility.		Increasing the size of the pool will always decrease the variance, but at some point you will have diminishing marginal utility.

			== Show me some examples and assist in clarifying what it all means... ==

			===== [http://forum.bitcoin.org/index.php?topic=6667.msg233175#msg233175 Quote from: SoreGums on 2011/06/18 at 05:09:43 pm] =====

			so what am i missing with this:
			* miner1 does 9 shares, mining the whole time
			* miner2 does 1 share then leaves, spent 3mins doing this at the start of the round
			* miner3 does 3 shares, working in the last 5mins of this block
			* miner4 does 7 shares, mining the whole time, and finds the block after 30mins
			* total shares = 20, each share is worth 50/20=2.5
			* miners get [92.5, 12.5, 32.5, 72.5] after block has 120 confirmations if it turns out to be invalid then shares go into current block solving round

			having typed that out, I'm guessing that this is PPS...
			how does this promote pool hoping?
			if reward is only given after a block is found how is the operator out of pocket?

			sorry if this has all been covered elsewhere - most everything else I've read regarding payouts is not as simple as what I have put above

			===== [http://forum.bitcoin.org/index.php?topic=6667.msg233652#msg233652 Quote from: ewal on 2011/06/18 at 06:48:11 pm] =====

			What you described is a transitional proportional payout scheme. Your payout is proportional to the amount of work that you did for any given block.

			In your example, miner1 got 22.5 BTC (9*2.5). That is 22.5 BTC for 30 minutes of work = 45BTC per hour.

			If you compare to an unlucky block that takes 100 times as long to find:

			* miner1 does 900 shares, mining the whole time
			* miner2 does 100 share then leaves, spent 300mins doing this at the start of the round
			* miner3 does 300 shares, working in the last 500mins of this block
			* miner4 does 700 shares, mining the whole time, and finds the block after 3000mins
			* total shares = 2000, each share is worth 50/2000=0.025

			In this example miner1 still gets 22.5 BTC (900*0.025) except this time it took 100 times longer to get it. Now it was 22.5 BTC for 3000 minutes of work or 0.45 BTC per hour. Way less per hour because the block was very unlucky.

			Traditional Pay-per-share (PPS) is a different system where you get paid by the number of shares you submit regardless of if a block is found. The payout per share is determined by taking 50/difficulty.

			Say difficulty is 20, so the price per share is 2.5 or 50/20. In scenario 1, miner1 makes 22.5BTC in 30 minutes (9*2.5) or 45BTC per hour. In scenario 2, miner1 makes 2,250 BTC in 3000 minutes or the same 45BTC per hour.

			In PPS, your pay per hour is always the same even in the short term, but the drawback is that the pool might go bankrupt if there are too many long blocks.
			In proportional, your pay per hour in any given 24 hours varies based on if blocks are lucky or unlucky and the drawback is that pool hoppers skip town on long blocks.
			In MaxPPS, your pay per hour in any given 24 hours may also vary if the pool is small enough that it isn't reliably finding multiple blocks per day, but the variation will lower than in proportional because the pool has withheld some of the payment you would have received from short blocks so that it can pay you more on long blocks. The benefits are that the pool can't go bankrupt, and there is no longer any incentive for pool hoppers to switch to another pool on long blocks.

Luke-jr: Undo revision 9079 by Firestorm (talk)

2011-05-27T16:17:58Z

Undo revision 9079 by Firestorm (talk)

← Older revision		Revision as of 16:17, 27 May 2011
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	The main reward systems used are:		The main reward systems used are:
	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. ~~However, the operator is subject to enormous variance, and will thus take~~ a large fee to ~~cover his risk. This means~~ the ~~expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable~~ to ~~sabotage where the miner simply withholds~~ all ~~block-finding shares, causing a loss to~~ the ~~pool operator~~.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. The Pool Operator often takes a relatively large fee, due to the fact that they cannot know how much will be paid in total to all the miners.

	:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method is vulnerable to a type of exploit known as "pool-hopping". In the theoretical limit, this can reduce the payout for non-hopping participants by up to 30% (in practice the decrease would be much less, but can still be significant).		:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted.

	:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score~~. Certain mining pools, like Slush's pool and BTC mine, are designed to be resistant while the one used by Continuum pool ("geometric method") is designed to be completely immune~~. The ~~amount of bitcoins a miner may recieve from their effors will vary over time, due to the~~ variance of this ~~system~~.		:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional.

	== What will be my expected payout per share? ==		== What will be my expected payout per share? ==

Firestorm: Removed Share-based disadvantage until clarified in talk page.

2011-05-27T13:35:23Z

Removed Share-based disadvantage until clarified in talk page.

← Older revision		Revision as of 13:35, 27 May 2011
Line 6:		Line 6:

	The main reward systems used are:		The main reward systems used are:
	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. ~~The Pool Operator often takes~~ a ~~relatively~~ large fee, ~~due~~ to the ~~fact that they cannot know how much will be paid in total~~ to ~~all~~ the ~~miners~~.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. However, the operator is subject to enormous variance, and will thus take a large fee to cover his risk. This means the expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable to sabotage where the miner simply withholds all block-finding shares, causing a loss to the pool operator.

	:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted.		:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method is vulnerable to a type of exploit known as "pool-hopping". In the theoretical limit, this can reduce the payout for non-hopping participants by up to 30% (in practice the decrease would be much less, but can still be significant).

	:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this ~~method is slightly higher than proportional~~.		:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. Certain mining pools, like Slush's pool and BTC mine, are designed to be resistant while the one used by Continuum pool ("geometric method") is designed to be completely immune. The amount of bitcoins a miner may recieve from their effors will vary over time, due to the variance of this system.

	== What will be my expected payout per share? ==		== What will be my expected payout per share? ==

Holy-Fire: Until we reach some sort of agreement, this should remain in the castrated, uncontentious form

2011-05-27T12:12:51Z

Until we reach some sort of agreement, this should remain in the castrated, uncontentious form

← Older revision		Revision as of 12:12, 27 May 2011
Line 6:		Line 6:

	The main reward systems used are:		The main reward systems used are:
	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. ~~However, the operator is subject to enormous variance, and will thus take~~ a large fee to ~~cover his risk. This means~~ the ~~expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable~~ to ~~cheating where the miner simply withholds~~ all ~~block-finding shares, causing a certain loss to~~ the ~~pool operator~~.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. The Pool Operator often takes a relatively large fee, due to the fact that they cannot know how much will be paid in total to all the miners.

	:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method can be most effectively mined using a strategy known as "pool-hopping" which can potentially (if executed perfectly) increase the overall earnings per time period for hopping miners by as much as 30% (at the expense of those who don't hop, as with any efficiency improvement) without helping increase the pools' (or Bitcoin network's) overall hashrate. However, if all miners practice "pool-hopping", the pools being "hopped" out of will come to a standstill, and not find blocks at all, leading to the long/short block distinctions being spread more or less equally across all pools. However, this spreading will result in a very uneven load on pools, with all the mining being done on the pool with the lowest shares in it, while the others sit idle. This strategy is considered by some to be cheating, and, whether cheating or not, is potentially liable to result in the miner being blacklisted from pools.		:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted.

	:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional. If you only mine several hours a day or disconnect in the middle of the round, this method is disadvantageous as the shares already submitted will depreciate as newer shares are submitted. The method used by slush's pool and BTCmine claim to be resistant to pool-hopping, while the one used by Continuum pool ("geometric method") claims complete immunity. However, in reality this method might merely invert the algorithm used for pool-hopping.		:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional.

	== What will be my expected payout per share? ==		== What will be my expected payout per share? ==

Luke-jr: /* What reward systems are there? */

2011-05-26T23:00:28Z

What reward systems are there?

← Older revision		Revision as of 23:00, 26 May 2011
Line 8:		Line 8:
	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. However, the operator is subject to enormous variance, and will thus take a large fee to cover his risk. This means the expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable to cheating where the miner simply withholds all block-finding shares, causing a certain loss to the pool operator.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. However, the operator is subject to enormous variance, and will thus take a large fee to cover his risk. This means the expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable to cheating where the miner simply withholds all block-finding shares, causing a certain loss to the pool operator.

	:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method can be most effectively mined using a strategy known as "pool-hopping" which can potentially (if executed perfectly) increase the overall earnings per time period for ~~the miner~~ by as much as 30% (~~when only one miner is hopping~~) without helping increase the pools' (or Bitcoin network's) overall hashrate. However, if all miners practice "pool-hopping", the pools being "hopped" out of will come to a standstill, and not find blocks at all, leading to the long/short block distinctions being spread more or less equally across all pools. However, this spreading will result in a very uneven load on pools, with all the mining being done on the pool with the lowest shares in it, while the others sit idle. This strategy is considered by some to be cheating, and, whether cheating or not, is potentially liable to result in the miner being blacklisted from pools.		:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method can be most effectively mined using a strategy known as "pool-hopping" which can potentially (if executed perfectly) increase the overall earnings per time period for hopping miners by as much as 30% (at the expense of those who don't hop, as with any efficiency improvement) without helping increase the pools' (or Bitcoin network's) overall hashrate. However, if all miners practice "pool-hopping", the pools being "hopped" out of will come to a standstill, and not find blocks at all, leading to the long/short block distinctions being spread more or less equally across all pools. However, this spreading will result in a very uneven load on pools, with all the mining being done on the pool with the lowest shares in it, while the others sit idle. This strategy is considered by some to be cheating, and, whether cheating or not, is potentially liable to result in the miner being blacklisted from pools.

	:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional. If you only mine several hours a day or disconnect in the middle of the round, this method is disadvantageous as the shares already submitted will depreciate as newer shares are submitted. The method used by slush's pool and BTCmine claim to be resistant to pool-hopping, while the one used by Continuum pool ("geometric method") claims complete immunity. However, in reality this method might merely invert the algorithm used for pool-hopping.		:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional. If you only mine several hours a day or disconnect in the middle of the round, this method is disadvantageous as the shares already submitted will depreciate as newer shares are submitted. The method used by slush's pool and BTCmine claim to be resistant to pool-hopping, while the one used by Continuum pool ("geometric method") claims complete immunity. However, in reality this method might merely invert the algorithm used for pool-hopping.

Luke-jr: /* What reward systems are there? */

2011-05-26T21:56:01Z

What reward systems are there?

← Older revision		Revision as of 21:56, 26 May 2011
Line 8:		Line 8:
	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. However, the operator is subject to enormous variance, and will thus take a large fee to cover his risk. This means the expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable to cheating where the miner simply withholds all block-finding shares, causing a certain loss to the pool operator.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. However, the operator is subject to enormous variance, and will thus take a large fee to cover his risk. This means the expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable to cheating where the miner simply withholds all block-finding shares, causing a certain loss to the pool operator.

	:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method can be most effectively mined using a strategy known as "pool-hopping" which can potentially (if executed perfectly) increase the overall earnings per time period for the miner by as much as 30%. However, if all miners practice "pool-hopping", the pools being "hopped" out of will come to a standstill, and not find blocks at all, leading to the long/short block distinctions being spread more or less equally across all pools. However, this spreading will result in a very uneven load on pools, with all the mining being done on the pool with the lowest shares in it, while the others sit idle. This strategy is considered by some to be cheating, and, whether cheating or not, is potentially liable to result in the miner being blacklisted from pools.		:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method can be most effectively mined using a strategy known as "pool-hopping" which can potentially (if executed perfectly) increase the overall earnings per time period for the miner by as much as 30% (when only one miner is hopping) without helping increase the pools' (or Bitcoin network's) overall hashrate. However, if all miners practice "pool-hopping", the pools being "hopped" out of will come to a standstill, and not find blocks at all, leading to the long/short block distinctions being spread more or less equally across all pools. However, this spreading will result in a very uneven load on pools, with all the mining being done on the pool with the lowest shares in it, while the others sit idle. This strategy is considered by some to be cheating, and, whether cheating or not, is potentially liable to result in the miner being blacklisted from pools.

	:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional. If you only mine several hours a day or disconnect in the middle of the round, this method is disadvantageous as the shares already submitted will depreciate as newer shares are submitted. The method used by slush's pool and BTCmine claim to be resistant to pool-hopping, while the one used by Continuum pool ("geometric method") claims complete immunity. However, in reality this method might merely invert the algorithm used for pool-hopping.		:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional. If you only mine several hours a day or disconnect in the middle of the round, this method is disadvantageous as the shares already submitted will depreciate as newer shares are submitted. The method used by slush's pool and BTCmine claim to be resistant to pool-hopping, while the one used by Continuum pool ("geometric method") claims complete immunity. However, in reality this method might merely invert the algorithm used for pool-hopping.

Luke-jr: /* What reward systems are there? */ Ok, a real long-term problem:p

2011-05-26T21:53:44Z

What reward systems are there?: Ok, a real long-term problem:p

← Older revision		Revision as of 21:53, 26 May 2011
Line 8:		Line 8:
	:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. However, the operator is subject to enormous variance, and will thus take a large fee to cover his risk. This means the expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable to cheating where the miner simply withholds all block-finding shares, causing a certain loss to the pool operator.		:'''Pay per share''': Every share submitted receives a fixed BTC reward known in advance. This has virtually 0 variance and is thus good for beginners. However, the operator is subject to enormous variance, and will thus take a large fee to cover his risk. This means the expectation for participants is low, so it's not an attractive long-term solution. It is also vulnerable to cheating where the miner simply withholds all block-finding shares, causing a certain loss to the pool operator.

	:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method can be most effectively mined using a strategy known as "pool-hopping" which can potentially (if executed perfectly) increase the overall earnings per time period for the miner by as much as 30%. However, if all miners practice "pool-hopping", the pools being "hopped" out of will come to a standstill, and not find blocks at all, leading to the long/short block distinctions being spread more or less equally across all pools. This strategy is considered by some to be cheating, and, whether cheating or not, is potentially liable to result in the miner being blacklisted from pools.		:'''Proportional''' ("Share-based"): Every time a block is found, its reward is split between participants according to the number of shares they submitted. This method can be most effectively mined using a strategy known as "pool-hopping" which can potentially (if executed perfectly) increase the overall earnings per time period for the miner by as much as 30%. However, if all miners practice "pool-hopping", the pools being "hopped" out of will come to a standstill, and not find blocks at all, leading to the long/short block distinctions being spread more or less equally across all pools. However, this spreading will result in a very uneven load on pools, with all the mining being done on the pool with the lowest shares in it, while the others sit idle. This strategy is considered by some to be cheating, and, whether cheating or not, is potentially liable to result in the miner being blacklisted from pools.

	:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional. If you only mine several hours a day or disconnect in the middle of the round, this method is disadvantageous as the shares already submitted will depreciate as newer shares are submitted. The method used by slush's pool and BTCmine claim to be resistant to pool-hopping, while the one used by Continuum pool ("geometric method") claims complete immunity. However, in reality this method might merely invert the algorithm used for pool-hopping.		:'''Score-based''': Each share submitted receives a score based on its age, and the block reward is split between participants according to their score. The variance of this method is slightly higher than proportional. If you only mine several hours a day or disconnect in the middle of the round, this method is disadvantageous as the shares already submitted will depreciate as newer shares are submitted. The method used by slush's pool and BTCmine claim to be resistant to pool-hopping, while the one used by Continuum pool ("geometric method") claims complete immunity. However, in reality this method might merely invert the algorithm used for pool-hopping.