How Does a Mining Pool Aggregate Hashing Power?
A mining pool is a collaborative group of individual miners who combine their hashing power to increase their collective chance of finding a block. When the pool successfully mines a block, the reward is distributed among all participants proportional to the amount of hash power each contributed.
This process provides smaller miners with a more consistent, albeit smaller, stream of revenue compared to the highly variable income of solo mining. The pool operator coordinates the work.
Glossar
Hashing
Cryptography ⎊ Hashing functions are foundational to the security of cryptocurrency systems, providing a deterministic transformation of input data into a fixed-size output, crucial for block creation and transaction verification.
Hashing Power
Security ⎊ This metric quantifies the total computational effort dedicated to securing a Proof-of-Work blockchain, directly determining the network's resistance to a 51 percent attack.
Mining Pool
Pool ⎊ The concept of a mining pool, within the cryptocurrency ecosystem, represents a collaborative effort among numerous miners to combine computational resources and share the rewards derived from successfully validating blockchain transactions.
Variable Income
Return ⎊ Variable Income, in the context of cryptocurrency, refers to the non-fixed, fluctuating financial returns generated from activities such as mining, staking, or providing liquidity to decentralized finance protocols.
Hash Power
Computation ⎊ Within cryptocurrency networks, hash power represents the total computational capacity dedicated to verifying transactions and securing the blockchain.