What is Mining Pool?
Let's find out Mining Pool meaning, definition in crypto, what is Mining Pool, and all other detailed facts.
A mining pool is a network of cryptocurrency miners who pool their processing power and resources in order to increase their chances of finding a block. Why is it beneficial?
In huge blockchains, like Bitcoin, there might be some intense competition among miners who are eager to find the next block. This means that a miner's ability to obtain crypto rewards requires an ever-increasing amount of processing power (and electricity). Besides, sometimes the infrastructure required for finding a block can get pretty expensive for an individual miner.
That’s where mining pools come to the rescue. The chances of finding the next block and being rewarded with crypto increase a lot when miners pool their processing power and resources into one collective organization. The pool rewards are subsequently divided between its members. However, keep in mind that the split of rewards might depend on the amount of contribution of each member (it’s not always equal).
In addition, note that there are a few downsides to mining pools. There were some instances of websites that claimed to offer cloud-based mining pools but turned out to be scams. Therefore, you always have to be careful when choosing a mining pool. Besides, keep in mind that you might be required to comply with a set of specific criteria inside a pool in order to be eligible for a block reward.