How Can a Miner Use the Concept of “Expected Value” to Compare Solo and Pool Mining?

Expected Value (EV) is calculated as the sum of all possible outcomes multiplied by their respective probabilities. For a miner, EV is the same for solo and pool mining over a long time horizon.

However, the difference lies in the variance. Pool mining offers a low-variance outcome close to the EV daily, while solo mining offers a high-variance outcome, with the EV only being realized over a much longer period.