Mining Bitcoin can still be a profitable way to earn the valuable digital token. The problem is that mining by single individuals has become very difficult today. It requires more advanced equipment and more resources that simply put it beyond the reach of most individuals. A better choice can be a mining pool in which you share the rewards of mining Bitcoin with others. Here’s how to choose a Bitcoin mining pool and connect.
The Advantages of a Bitcoin Mining Pool
While trying to mine solo today the chance is very small that you will earn a reward of Bitcoin. It simply takes too much hashpower, and there are mining farms that have all the hashpower they can muster and then some. Earning Bitcoin as a solo miner would be like trying to win the lottery.
A Bitcoin mining pool helps to level the playing field. You are sharing your resources with a group of others and reducing the advantage of large mining operations. By reducing variance there is a greater chance that you will be rewarded for your mining work. The reward that you receive from the mining pool will correspond to the amount of work that you have done.
Pools are also helpful in stopping cheating by miners who try to swap between pools for an advantage. All in all a mining pool is a much better option for you if you want to have a chance at earning Bitcoin.
Mining Pool Considerations
Before you jump headfirst into a mining pool you need to understand some of the things that are involved. This will help you ask the right questions before you join the pool. The very first thing that you want to ask about are the pool fees, because everything comes down to money in the end. How much you will have to spend and how much you will earn.
For every mining pool there is someone assuming the risk. It can be a mining pool operator or it can be the actual miners. If you as a miner are willing to join a pool where you assume some of the risk, the fees will be lower. The opposite is true if the mining pool operator assumes the risk.
Fees are not standard with all mining pools. They can range between 0% and 4%. A good average would be 1%, and if you encounter a pool where the fee is higher than this then you need to make sure there is a trade-off to compensate you for the increases fees. If the pool has features that balance out the fees, make your own determination. We would suggest always going with the lowest mining pool fees in exchange for the most features.
It is strange to encounter a pool with no mining fees. If that is the case you might want to beware and ask a lot of questions. The pool may just be getting started and have no real track record.
Payments are another very important thing to think about. How is the revenue shared by the miners in the pool? Is the payment proportional to the amount of hashpower that you contribute? Some mining pools use a share system that fairly rewars miners who may have had technical problems during a mining effort. There are tens of payment methods associated with different pools. You’ll need to decide which one of them works best for you.
Minimum payouts are also a thing with most mining pools. You might be allowed to set a limit for when you would like a withdrawal rather than taking the minimum amount. That will save you on fees for the Bitcoin transaction.
Choosing a Cryptocurrency to Mine
You are also going to need to give some thought to the cryptocurrency that you intend to mine. Is it going to be Bitcoin? Ethereum? This probably won’t be a difficult choice for most people because of value considerations. Bitcoin may offer you the best chance for profit at the moment, but that can change.
What we would warn against is choosing an altcoin that has limited prospects for success. Hopping onboard to mine a coin that no one has any interest in is not going to be profitable. Stick with the proven digital currencies when you decide to mine.
There are multi-pools available that will allow you to mine multiple cryptocurrencies. You can then have the rewards that you earn converted into Bitcoin before you are paid out.
Another Mining Pool Solution
At CryptoSwede we believe that something else that you might want to think about is participating in a mining pool like the one offered by Genesis Mining. In this situation you do not have to use your own resources to mine. You simply purchase shares of hashpower with a group of other people. You buy the contract and Genesis Mining does all the work.
Genesis Mining owns the equipment and maintains it. You do not have to pay any fees beyond the cost of the mining contract. We will admit that this is a gamble of sorts. You could earn a significant reward or you could earn a smaller amount. It is a better solution for those who do not want to invest in mining equipment.