Bitroo Classroom 30 Mining Pool Profit Distribution Model

CoinDesk Report:
PPS, PPLNS, PPS+, FPPS, and SOLO are common profit distribution models in cryptocurrency mining, each with its unique characteristics and risks. Here is a brief explanation of these models:
1. PPS (Pay Per Share):
– PPS is a fixed payment model where miners receive earnings based on the number of shares submitted, rather than the actual blocks mined by the mining pool.
– The mining pool calculates the value of each share in advance based on the current mining difficulty and the pool’s expected earnings.
– Miners earn income for each valid share submitted according to this fixed payment rate, regardless of the time taken by the pool to mine blocks.
– This model reduces the volatility of miner income, but the pool may charge higher fees to compensate for potential block confirmation risks.
2. PPLNS (Pay Per Last N Shares):
– PPLNS is a model that distributes earnings based on the last N blocks mined by the pool.
– Miners’ earnings are proportional to the number of shares they submitted in the last block.
– If the pool does not mine blocks within the N-block period, miners will not receive earnings during that time.
– This model may increase income volatility, but ideally, miners can earn higher profits compared to PPS.
3. PPS+ (Pay Per Share Plus):
– PPS+ is a variation of the PPS model that adds allocation of transaction fees.
– In the PPS+ model, the mining pool distributes transaction fees based on the miners’ contribution ratio.
– This allows miners to not only receive fixed payments for block rewards but also a certain percentage of transaction fees, thereby increasing overall income.
4. FPPS (Full Pay Per Share):
– FPPS is similar to PPS+, as it is a payment model that considers transaction fees.
– In the FPPS model, the mining pool distributes block rewards and transaction fees based on the miners’ contribution ratio.
– This model aims to provide miners with fair and transparent profit distribution while maintaining income stability.
5. SOLO (Solo Mining):
– Solo mining refers to miners individually mining without joining a mining pool.
– Miners solve block puzzles on their own and independently receive all rewards for mined blocks, including block rewards and transaction fees.
– The disadvantage of solo mining is the high volatility of income, as miners’ computational power is usually very small compared to the entire network, resulting in lower chances of mining blocks.
– However, if miners have sufficient computational power, solo mining can provide the highest potential earnings.
Each mining model has its advantages and disadvantages, and miners should choose the most suitable mining model based on their computational power, risk tolerance, and market conditions.