Can a Mining Pool Be Considered a Form of 'Risk-Sharing' Financial Arrangement? ⎊ Path

Can a Mining Pool Be Considered a Form of ‘Risk-Sharing’ Financial Arrangement?

Yes, a mining pool functions as a risk-sharing mechanism. Individual miners face high 'variance risk' ⎊ the risk of earning zero reward for long periods due to the probabilistic nature of finding a block.

By pooling resources, they convert a low-probability, high-reward event into a high-probability, low-reward event. This shared structure smooths out income, effectively distributing the risk of not finding a block across all participants.

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