Bitcoin pays miners in blocks. A block is worth the 3.125 BTC subsidy plus whatever transaction fees it collects, and the network produces about 144 of them a day. Those 144 rewards are split among every machine on the network, but not evenly: each block goes in full to whoever finds it. A miner with a small fraction of the world's hashrate therefore has a small chance of winning each block and a very long expected wait between wins.
A mining pool exists to fix that. The pool submits blocks on behalf of thousands of machines, collects the rewards, and divides them among its members according to the work each one contributed. Members give up the chance of a whole block in exchange for a steady stream of small payments. This guide explains how the pool measures work, how the main payout schemes divide it, what pools charge, and what to check before choosing one.
Why do miners need a pool at all?
Miners need a pool because the odds of finding a block alone are too long for a normal budget to survive. The arithmetic is simple. At a network hashrate of 900 EH/s, which is an assumption for this example and not a live figure, a single Antminer S21 Pro hashing at 234 TH/s holds about 0.000026% of the network. Its expected time to find one block is the reciprocal of that share multiplied by the ten-minute block interval, which works out to roughly 70 years. The machine would be obsolete long before the average payday.
A pool with 10% of the network expects to find about 14 blocks a day. Its members receive a fraction of each one, and over a month their income is close to what probability says they are owed. The total does not change; a pool cannot make hashrate earn more than its share of the network's rewards. What changes is the shape of the income, from one large payment at an unknown date to small payments every day.
How does a pool measure each miner's work?
A pool measures work in shares. The Bitcoin network only accepts a hash below its current target, which at present difficulty is an extraordinarily rare event. The pool sets each miner an easier private target, and every hash that beats it is a share: proof that the miner has done a known quantity of work, even though the hash was not good enough to be a block. Because the pool knows how hard each share was to find, adding up shares tells it exactly what proportion of the pool's total effort each member supplied.
Occasionally one of those shares also happens to beat the network target. That is a block. The pool broadcasts it, the reward lands in the pool's coinbase address, and the payout scheme decides who gets what. A share that arrives after the pool has already moved on to a new block is stale and earns nothing; a high stale rate, above 1% or so, usually points to network latency between the miner and the pool.
Miners talk to the pool over the Stratum protocol. Stratum V1 has been in use since 2012 and sends work unencrypted, which is why some pools now offer Stratum V2. Version 2 encrypts the connection and adds an optional mode, called job negotiation, in which the miner rather than the pool decides which transactions to include in the block it is working on.
What are PPS, FPPS and PPLNS?
PPS, FPPS and PPLNS are the three payout schemes almost every pool uses, and they differ in who carries the risk that the pool has a slow week. Under pay per share (PPS), the pool pays a fixed amount for every accepted share, calculated from what a share of that difficulty is worth in expectation. Miners are paid whether or not the pool finds a block. The pool takes the variance onto its own balance sheet and charges a higher fee for doing so.
Full pay per share (FPPS) is PPS with transaction fees added. The pool estimates the average fee revenue per block over a recent period and pays each share its proportion of that too. Most of the largest pools by blocks found now use FPPS, because the fixed rate lets them quote a precise daily figure per terahash.
Pay per last N shares (PPLNS) works the other way round. The pool pays nothing until it finds a block. When it does, the reward is divided among the shares submitted in a window before the block, typically defined as the last N shares or the last few hours. Miners carry the pool's luck: a lucky week pays more than expectation, an unlucky one pays less, and a miner who leaves the pool shortly before a block forfeits the part of the reward those shares would have earned. Fees are usually lower because the pool takes no risk.
| Scheme | Paid from | Who carries variance | Includes tx fees | Typical fee |
|---|---|---|---|---|
| PPS | Expected value of each share | The pool | No | Higher, often 2-4% |
| FPPS | Expected value plus average fees | The pool | Yes, averaged | Higher, often 2-4% |
| PPLNS | Blocks the pool actually finds | The miner | Yes, actual | Lower, often 0-2% |
| Solo | Blocks you find yourself | You, entirely | Yes, actual | 0-1% at solo pools |
The right choice depends on cash flow. A miner paying an electricity bill every month has a reason to prefer FPPS, because the income is predictable enough to plan around. A miner who can absorb a bad month and wants the lower fee, or who wants exposure to a fee spike when the mempool fills, has a reason to prefer PPLNS.
What does a pool charge?
Pool fees run from 0% to about 4% where operators publish them, taken from the reward before it reaches the miner. PPS and FPPS pools sit at the top of that range because they are insuring their members against variance. PPLNS pools sit lower. A few pools advertise 0% and recover their costs from the transaction fees in the blocks they find, or from hosting and hardware sales.
Publication is the harder problem. When MiningPool checked operator websites for the pool comparison in July 2026, Luxor published no fee percentage anywhere on its site, ViaBTC put its schedule behind a login, and F2Pool's fee page returned a 404. Third-party comparison sites fill those gaps with figures that contradict one another. MiningPool records only fees confirmed on the operator's own site and shows an empty cell otherwise, because a confident wrong number is worse than a blank.
When and how does a pool pay out?
A pool pays out when a miner's balance crosses the pool's payout threshold, usually once a day at a fixed time. Thresholds exist because every payment is an on-chain transaction with a fee, and paying a few thousand satoshis to a thousand miners every hour would cost more than it delivers. Most pools set the threshold between 0.0001 BTC and 0.01 BTC and let miners raise it; a small miner should expect the first payment to take days rather than hours.
Payment goes to the address the miner sets in the pool account. Until it does, the balance is a claim on the pool, and a pool that stops paying, or shuts down, takes unpaid balances with it. The exposure is small if the threshold is low and the pool has a public payout history, but it is not zero, and it is the main reason a miner should not treat a pool balance as savings.
Does it matter how big a pool is?
Pool size matters for two different reasons. For the miner, a larger pool finds blocks more often, which under PPLNS means smaller, steadier payments; under FPPS it makes no difference to the miner at all, because the pool is paying a fixed rate regardless. For the network, a large pool decides which transactions go into a meaningful share of blocks, and if two or three pools together approach half of all hashrate the arrangement rests on their good behavior and on miners' willingness to move.
Miners can move quickly. Switching pools is a configuration change that takes minutes, which is why pool market share has changed hands repeatedly over Bitcoin's history. The pool comparison shows each pool's share of blocks over the last seven days, read directly from the blockchain. Because the window is short, a small pool that finds two blocks in a lucky week appears to have more hashrate than it does; treat share as a sample, not a measurement of committed hashrate.
How should a beginner choose a pool?
A beginner should choose a pool by checking four published facts and one behavior. The facts are the payout scheme, the fee, the payout threshold, and whether the pool has a server geographically close enough to keep stale shares under about 1%. The behavior is transparency: a pool that publishes its fee, its blocks and its payout address on its own site is easier to hold to account than one that does not.
Then run the numbers. The profitability calculator takes the pool fee as an input alongside the machine and electricity rate, and the fee is often the difference between a machine that covers its power and one that does not. How that calculation works, and why difficulty growth makes every forecast expire, is the subject of the profitability guide.