When you wish to start Bitcoin mining, you need to first understand how Bitcoin mining actually works. Bitcoin mining is completely legitimate; the speed with which you will mine BTC is calculated in terms of hashes per second. The network will reward the Bitcoin miner for his effort to solve a mathematical problem; this is released as Bitcoins to everyone who contributes to the computing power. So, the higher the computing power contributed by you to the network, the higher is your reward. Some miners prefer to mine on their own; solo mining can be profitable but may not be the best choice for everyone. When you engage in solo mining, you are performing all the work independently, and you will get the whole block reward. But, the process involves a lot of luck and when you do not have a very high hash power, you may not ever get a reward. However, on the other hand, if you decide to join a Bitcoin mining pool, you have better chances of getting payouts.
When you have made up your mind to join a reputed Bitcoin mining pool or altcoins mining pool, you have to consider many things. You need to check out their fees and the ways in which they will be distributing the rewards. Before signing up for any Bitcoin mining pool, it is recommended that you review its features well.
What things should you consider when joining a Bitcoin mining pool?
- One of the first things that you must take into account when joining any mining pool is the pool fees the company charges. This fee is likely to be different from one pool to another, depending on the payment distribution method followed and the amount of risks involved. When the pool operator is taking up more risks, the pool fees are obviously much higher. When the individual miners assume greater risks, the fees are less. Typically, charges will be between 0% and 4%. In case you have selected a pool which charges high fees, you should review its features and compare these with other mining pools. At times, pools may have 0% fees which are very rare. It may be a ploy to get new customers initially.
- When choosing a Bitcoin mining , you need to review the payment method it follows. When the operator takes up more risks they will guarantee payments for each POW or Proof of Work which miners offer. Such pools will hand over payouts even when the pool may not have been able to mine a block successfully. Since risks are borne by the operators, fees are usually higher for the miners here. If the miners assume more risks, the fees are less because here they are prepared not to get rewards for longer time periods. There are also mining pools which have fees even over and above the Pay-Per-Share or PPS schemes. Different payment systems have therefore evolved over the years.
- You should also consider the minimum payout or the number of coins which you can withdraw automatically. There are pools which let you fix a limit above this minimum and you get to save transaction charges. So, before joining a Bitcoin mining pool, your task is to review the payout period, minimum payout amounts, and also whether the users or pools pay for transaction fees during withdrawals.
- You will also need to decide whether to join a multi-pool or not. These will let you choose from multiple cryptocurrencies for mining. They can convert the profits to Bitcoin automatically. Before joining any mining pool for mining Bitcoin, it is advisable to check its location. So, when you are in the US but mining using Chinese servers, results may not be the best possible. You should ideally check if the Bitcoin mining pool you have signed up with has servers in your continent or country. This guarantees more efficient mining.