Why pools exist
On a large network, a small miner might go years without finding a block alone. A pool merges many miners' work, so the group finds blocks regularly and shares the reward in proportion to the "shares" each member submits. The result is predictable income instead of a lottery.
How pools pay
Pools use different reward schemes. In broad terms:
- PPS (pay per share): a fixed amount per valid share, with the pool absorbing luck variance — usually with a higher fee
- PPLNS (pay per last N shares): rewards depend on shares submitted around block discovery — lower fees but payouts vary with luck
- Other variants blend the two
Read the pool's rules; the differences change what you actually receive.
Fees and thresholds
Pools take a fee, commonly a small percentage of rewards, and most set a minimum payout threshold: your balance accumulates until it passes that amount, then is sent to the address you configured. A high threshold on a low-earning miner can mean a long wait.
Choosing a payout address
The pool pays the address you supply. If that address is on an exchange, the exchange holds the coins; if it's in your own wallet, you do. With merged mining you'll typically enter one address per coin.
Verifying payouts
Every payout is an on-chain transaction, so you can look it up in a block explorer with the transaction ID the pool provides.
Questions to ask before joining a pool
How is the pool paid and how does it pay you (PPS, PPLNS or another scheme)? What are its fees and minimum payout? How often does it pay out, and can you see every payout as an on-chain transaction? Does it support merged mining for the coins you want? A pool that is vague about any of these is a reason to look elsewhere.