What does it mean to bitcoin mine in a pool?
You have probably heard of people “pooling” their money together, which means everyone pitches in for a common cause. Bitcoin pooled mining is basically the same idea, except in this case, they pool their computer power together to mine bitcoins.
Why should I join a bitcoin mining pool?
Currently, bitcoins are found in blocks of 25. When one mines individually, the chances of finding one of these blocks are low, especially with so much competition. Of course, if you do find one, you will be awarded with all 25 bitcoins.
When you mine as part of a pool, your group works together to find a block, and there is power in numbers with bitcoin mining, there for the chances get much higher. The block of 25 bitcoins will be distributed to all the members of the pool fairly. In short, pooled mining leads to lower, but more frequent payoffs. Still, it is the way to go, or you may not end up with any bitcoins at all.
How many bitcoins can you get mining with a pool?
The server assigns users blocks that are not of a very high difficulty level. Every time a user finds a solution, they are given one “share”. Every so often, a user will solve a block that meets the requirements, and the result is the much sought after minting of 25 brand-new bitcoins; But now what? How are these bitcoins awarded amongst the group who contributed? Well, this depends on how many shares they earned in the total round.
Here is a simplified basic version of the formula for determining the am mount of bitcoins that you will be rewarded for playing a role in a 25 BTC minting:
(25 BTC + block fees – 2% fee) * (shares found by user’s workers) / (total shares in current round)
The 2% fee is used to continue making this service available for users.
To see a more in-depth version of this formula, click here.
It is not possible to carry your shares over after a round has ended and moved on to the next. Also, in order to get rewarded for a block, you had to actually have contributed to the solution.
Key features
- Well Established & Operators you Can Trust mining.bitcoin.cz has been in operation since December of 2010, since back when Bitcoins were a newborn currency. The Operators are completely trustworthy and we have a long history of consistent and accurate payouts.
- Stratum protocol support – This bitcoin mining protocol, with very low network overhead, is ideal for high-speed ASIC miners.
- Score-based reward system – Many people spend a lot of their valuable mining time hopping from pool to pool. Most of the people that land here have a tendency to stay. Why? A big part of it has to do with the fact that this pool uses such a fair system for distributing rewards amongst its members.
- In order to enjoy these features, you will need to install miner software that supports them all. We recommend you poclbm miner or GUI miner
How Can You Get Started?
Step 1: Choose a Bitcoin miner to install on your computer
Here are a few major CPU/GPU miners that support pooled mining:
- For Beginners- Kiv’s GUI miner (Windows) (instructions)
- For Experts- ckolivas’s CGMINER (GPU/FPGA) (instructions)
Or try m0mchil’s GPU miner (instructions)
2. Sign up with a bitcoin.cz account
- Sign up
- Verify email (may be used for troubleshooting)
- Login to application
- Enter your wallet address – can be also online wallet registered on MtGox or Intersango
- Register your workers. Using one worker account for all your miners is allowed, but many recommend to use a separate account for each miner because it makes for easier troubleshooting.
3. Run miner
Run your own GPU/FPGA/ASIC miner with the worker information you provided earlier, and connect it to following URL:
(Main pool URL)
or
stratum.bitcoin.cz:3333
(If you have Stratum-compatible miner)
Is it secure?
This Bitcoin pool service was created because I am well aware of how mining is growing increasingly difficult as time goes by. I have had plenty of days go by without finding a single block of bitcoins. This was even with the best GPU money could buy. This was not a very encouraging feeling. The mining pool offered a much steadier rate of payout. I found the pool a great way to insure that what I had invested into the bitcoin market was going to payoff.