Mining Pools Explained — Why Solo Mining Is Dead

Mining Pools Explained

In the early days, anyone could mine Bitcoin on a laptop. Those days are long gone. Today, finding a block solo is like winning the lottery — possible but not a business plan. Mining pools solve this by aggregating hashrate and sharing rewards.

How Mining Pools Work

A mining pool is a server that coordinates work among thousands of miners. Here's the process:

1. Pool creates work: The pool assembles a candidate block and distributes work units to miners
2. Miners submit shares: Each miner hashes and submits "shares" — partial proofs of work that are valid at a lower difficulty than the real target
3. Pool finds a block: When a miner's share happens to also meet the real difficulty target, the pool broadcasts the block
4. Rewards distributed: The pool receives the block reward and distributes it to miners proportional to their contributed shares

Payout Schemes

• PPS (Pay Per Share): Fixed payment per valid share, regardless of whether the pool finds a block. Pool absorbs the variance risk
• FPPS (Full Pay Per Share): PPS plus a share of estimated transaction fees. Most popular scheme in 2025
• PPLNS (Pay Per Last N Shares): Payment based on your share contribution over the last N shares. More variance but potentially higher rewards
• TIDES (Transparent Index of Distinct Extended Shares): Ocean Mining's transparent payout method

Major Mining Pools in 2025

Pool	Hashrate Share	Payout	Notes
Foundry USA	~30%	FPPS	Largest pool, US-based
AntPool	~18%	FPPS/PPLNS	Bitmain-affiliated
F2Pool	~12%	PPS+	One of the oldest pools
ViaBTC	~11%	PPS/PPLNS	Multi-coin mining
Ocean Mining	~2%	TIDES	Jack Dorsey backed, transparent

The Centralization Concern

When one pool controls 30%+ of hashrate, it's concerning. A pool with 51% could theoretically double-spend or censor transactions. But there's a key distinction: pools don't own the hashrate. Individual miners can switch pools instantly if a pool misbehaves.

Stratum V2 — The Fix

Stratum V2 is a new mining protocol that lets individual miners construct their own block templates instead of accepting whatever the pool dictates. This means pools can't censor transactions even if they wanted to. Ocean Mining already supports Stratum V2, and others are following.

Which Pool Should You Use?

If you're mining (even experimentally):

• For reliability: Foundry or F2Pool
• For transparency and Bitcoin ethos: Ocean Mining
• For experimentation: Solo CK Pool (solo mining pool — you get the full block reward if you find a block)

For more mining guidance, visit our learning center.