How Does a Mining Pool Structure the Distribution of Block Rewards among Its Members?

Mining pools aggregate the hash power of many individual miners to increase the probability of finding a block. When a block is found, the pool distributes the block reward (new coins plus transaction fees) based on the proportional contribution of each miner's hash rate, minus a pool fee.

Common distribution methods include Proportional (Prop), Pay-Per-Share (PPS), and Full Pay-Per-Share (FPPS), which vary in how they handle variance and transaction fees.