Those who have an interest in Bitcoin are probably are of mining. Cryptocurrency mining is the process by which Bitcoins are created and distributed through verifying transactions on the blockchain. In the early years of Bitcoin, mining was a reliable way to generate tokens and build Bitcoin value. Today, mining is still conducted but it has become too costly for the cryptocurrency hobbyist.
The alternative for those who still want to obtain Bitcoin through mining is to join a mining pool. A mining pool allows individuals to purchase shares of the mining effort. Each participant is then rewarded with a percentage of the Bitcoin that are generated. Those who join a mining pool do not have to purchase costly equipment, and they do not have to pay for the electricity needed to mine coins.
Bitcoin Mining Pools and How to Join Them
Technically a Bitcoin mining pool is any group of individuals who pool their resources are share processing power over a single network. These miners are trying to find and solve a block, the process by which new Bitcoins are obtained. The members of a Bitcoin mining pool share the rewards of solving a block, and they also share the expenses of the mining process.
A mining pool might consist of several individuals who own their own mining equipment. This would be an example of a private mining pool. The more popular variety of mining pool today is the collective. A collective like Genesis Mining allows individuals to purchase contracts or “hash power” without having to have their own equipment. The collective owns and maintains all of the equipment, and it is also responsible for the expense incurred in the mining process.
Joining a mining pool is simple and straightforward. In most cases, you will be required to pay a fee. This fee could be a monthly amount or it could be a six month or one year contract. In exchange for the fee you are given a certain amount of hash power in a mining pool. There will be other Bitcoin investors in the same pool, and they will also pay a fee to join.
The Pros and Cons of a Mining Pool
Bitcoin mining pools have their positives and negatives. They may not be a good choice for everyone. Before one makes a decision to participate in a mining pool, it pays to compare the advantages and disadvantages.
In this description we have chosen to focus on pools like that offered by Genesis Mining because this is the way most potential investors will want to go. Those who prefer the older method of actually adding their own mining equipment to a network will have their own challenges to contend with.
The first advantage of a Bitcoin mining pool is that you do not need to purchase or maintain mining equipment. The mining company uses its own hardware and also pays for the upkeep. Of course, the cost of operating the mining company is offset by the fees individuals pay to join the collective.
Another advantage is that one does not have to constantly monitor the output of a miner. Once one pays the fee to join Genesis Mining or a similar operation, all that they are required to do is sit back and collect their share of any Bitcoin that is mined.
Fees to purchase hash power can also be quite nominal. They are definitely cheaper than what one would pay to attempt mining on their own. For a small amount of money you can experience the thrill of mining Bitcoin, and you may even make a small profit.
On the negative side, there is no guarantee you will achieve a profit when you join a mining pool. The ability to profit depends upon the success of the mining effort and the overall value of Bitcoin. The cryptocurrency market is very volatile, so individuals should be aware that joining a mining pool has the potential to produce a net loss if the value of Bitcoin were to suddenly drop.
It is also true that the share of Bitcoin received on some contracts is very small. It might take a very long time for an individual to obtain a decent amount of Bitcoin.
We encourage you to check out the opportunities offered by Genesis Mining. You may find that a mining contract with this company will help you to learn more about the world of cryptocurrency, and it may also put some tokens in your Bitcoin wallet.
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