Bitcoin 101: How to Earn BTC with Mining Pools

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LINKS FOR ADDITIONAL READING FOR THIS VIDEO & ALL INFO IN TEXT DOWN BELOW

GPU mining no longer an option for BTC: https://bitcoin.stackexchange.com/questions/41125/is-gpu-mining-still-an-option
Mining Pool Hub: https://miningpoolhub.com/
Detailed comparison of popular BTC mining pools: https://www.buybitcoinworldwide.com/mining/pools/
Slush Pool: https://slushpool.com/home/
Ethereum Mining Pools: https://forum.ethereum.org/discussion/3659/list-of-pools
Monero Mining Pools: http://www.moneropools.com/
Bitcoin Mining software options: https://www.bitcoinmining.com/bitcoin-mining-software/

Mining Pools allow miners to come together and pool their computing power in order to increase the chance of mining a Bitcoin block.
Proof of Work mining dictates that the miner with the fastest hash rate has the best chance to mine a new block and receive not only the block rewards, which are brand new Bitcoins, but also the transaction fees paid by those who’s transactions were included in the block that they successfully mined. The use of mining pools means that you combine your computing power with others, you contribute to a faster hash rate and increase your chances of mining a new block. The rewards are then dispersed according to the amount of hash power contributed. If you want to mine Bitcoin using a GPU setup, just know that you most likely will not be contributing very much computing power to the mining pool compared to others who are using ASICs, and your payouts will reflect this.

If you want to mine using a GPU setup, I’m going to suggest that you explore other coins that are GPU mining friendly. Monero for example has recently taken a stand against ASIC mining. In fact, they’ve decided to fork their code in order to keep ASICs from taking over and potentially causing their network to centralize.

If you want to join a mining pool, this means you’ll need to have a computer or mining rig dedicated to run and be connected to the internet 24/7. You’ll also need to configure your mining rig or computer to direct its hash power towards the mining pool of your choice. Lastly, you’ll need an appropriate wallet to which your payments will be sent. There are many guides available that help you to install the Bitcoin mining software, I’ll include links down below so you can check out a few.

There are some fundamental things about mining pools that are counterintuitive when it comes to Bitcoin and other cryptocurrencies as well.
Here’s the deal.
The thing about the Bitcoin network that has always been its strength is its decentralization and open source code. I know I’ve said it many times on this channel, but it’s something that will always bear repeating. Decentralization removes the risk of a single point of failure. It keeps decision making where it should be, in the hands of the many who work to secure and maintain the network. Once we start playing around with centralization it opens the door for power grabs and corruption.
Open source code and information is also vital because it allows anyone to learn about and understand the different systems that come into play with not only Bitcoin but other networks as well.
Granted, it’s rare to find a system that is completely decentralized, but things like mining pools don’t exactly help the cause. So I want to encourage all of you to look into running your own fully validating nodes. These nodes are what monitor and ultimately keep the blockchain in check and maintain its integrity.

All of that being said, if you’re still interested in being a part of a mining pool, here are some things I urge you to be aware of:
* It’s a form of centralization
* Does the owner of the mining pool control how the entire pools hash rate affects the Bitcoin network? (AntPool)
* Is the payment system transparent?
* Do you receive portions of the transaction fees as well or just block rewards?
* Always be as aware as possible of the decisions made by the owner of the pool. If they are not transparent of their stance on issues, I would not recommend being a part of their pool.

Bitcoin 101: How to Earn BTC with Mining Pools

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Kane Dane