Mining pools are a way for miners to pool their resources together
and share their hashing power while splitting the reward equally
according to the amount of shares they contributed to solving a block. A
"share" is awarded to members of the mining pool who present a valid
proof of work that their miner solved. Mining in pools began when the
difficulty for mining increased to the point where it could take years
for slower miners to generate a block and by pooling their resources
together, miners were able to generate blocks quicker and receive a
portion of the block reward on a regular basis, rather than once every
few years.
While there are many mining pools out
there, some use different calculations to pay out Bitcoin rewards. Here
are the different types:
PPS: The Pay-per-Share (PPS) approach offers an
instant, guaranteed payout for each share that is solved by a miner.
Miners are paid out from the pools existing balance and can withdraw
their payout immediately. This model allows for the least possible
variance in payment for miners while also transferring much of the risk
to the pool's operator.
PROP: The Proportional approach offers a
proportional distribution of the reward when a block is found amongst
all workers, based off of the number of shares they have each found.
PPLNS: The Pay Per Last N Shares (PPLN)
approach is similar to the proportional method, but instead of counting
the number of shares in the round, it instead looks at the last N
shares, no matter the boundaries of the round.
DGM: The Double Geometric Method (DGM) is a
hybrid approach that enables the operator to absorb some of the risk.
The operator receives a portion of payouts during short rounds and
returns it during longer rounds to normalize payments.
SMPPS: The Shared Maximum Pay Per Share (SMPPS) uses a similar approach to PPS but never pays more than the pool has earned.
ESMPPS: The Equalized Shared Maximum Pay Per
Share (ESMPPS) is similar to SMPPS, but distributes payments equally
among all miners in the pool.
RSMPPS: The Recent Shared Maximum Pay Per
Share (RSMPPS) is also similar to SMPPS, but the system prioritizes the
most recent miners first.
CPPSRB: The Capped Pay Per Share with Recent
Backpay uses a Maximum Pay Per Share (MPPS) reward system that will pay
miners as much as possible using the income from finding blocks, but
will never go bankrupt.
BPM: Bitcoin Pooled mining (BPM), also known
as "slush's pool", uses a system where older shares from the beginning
of a block round are given less weight than more recent shares. This
reduces the ability to cheat the mining pool system by switching pools
during a round.
POT: The Pay on Target (POT) approach is a
high variance PPS that pays out in accordance with the difficulty of
work returned to the pool by a miner, rather than the difficulty of work
done by the pool itself.
SCORE: The SCORE based approach uses a
system whereby a proportional reward is distributed and weighed by the
time the work was submitted. This process makes later shares worth more
than earlier shares and scored by time, thus rewards are calculated in
proportion to the scores and not shares submitted.
ELIGIUS: Eligius was designed by Luke Jr.,
creator of BFGMiner, to incorporate the strengths of PPS and BPM pools,
as miners submit proofs-of-work to earn shares and the pool pays out
immediately. When the block rewards are distributed, they are divided
equally among all shares since the last valid block and the shares
contributed to stale blocks are cycled into the next block's shares.
Rewards are only paid out if a miner earns at least .67108864 and if the
amount owed is less than that it will be rolled over to the next block
until the limit is achieved. However, if a miner does not submit a share
for over a period of a week, then the pool will send any remaining
balance, regardless of its size.
Triplemining: Triplemining brings together
medium-sized pools with no fees and redistributes 1% of every block
found, which allows your share to grow faster than any other pool
approach. The administrators of these pools use some of the Bitcoins
generated when a block is found to add to a jackpot that is triggered
and paid out to the member of the pool who found the block. In this way,
everyone in the pool has a better chance to make additional Bitcoins,
regardless of their processing power.
Source : Bitcoinmining.com
