Newbie miners have many misconceptions about how the hashrate of the pool they mine in will affect their mining income.

If a big miner joins the pool there are some unhappy miners who think that now they will get paid less because big miners take a big share of the mined coins, while others are cheering because they think a big miner will help them pull in more coins.

Some miners believe you should pick a big/medium/small pool depending on whether your own hashrate is high or low.

How does pool hashrate actually affect miner income? Assuming the pool is not PPS (fixed pay).

  • Are you asking because yourself you don't know, or because you want there to be an answer in SE? – Meni Rosenfeld Jun 8 '13 at 18:18
  • I know the answer. But I've been running a pool for 2 years and get these questions and "theories" all the time. I got tired of explaining and wanted an SE page to refer to. Some don't even believe me - maybe they believe it if it is on SE. :) – Dr.Haribo Jun 10 '13 at 19:58
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    I figured as much, though your wording doesn't really make that clear... Maybe it's better to cut down on the first person. – Meni Rosenfeld Jun 11 '13 at 6:02
  • Yeah, good point. I have now added a short intro text. ;) – Dr.Haribo Jun 11 '13 at 17:17
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    I rewrote the question text – Dr.Haribo Jun 16 '13 at 13:34
up vote 12 down vote accepted

The size of a pool, its total hashrate and the distribution of hashrate between bigger and smaller miners, have no effect on the rewards you, mining with a specific hashrate, will obtain on average.

The total block rewards collected by the pool are proportional to the number of blocks it finds per time unit, which is proportional on average to its total hashrate. In every fair pool reward method, the rewards you get on average are exactly proportional to your part in the total work done by the pool. If you mine in a pool twice as large, the pool will collect twice as much rewards but your share in them will be cut by half, meaning you get the same on average.

More specifically, all fair reward methods give miners on average (1-f)pB per share they submit, with f being the fee, p the probability that a share will be a block, and B the block reward. This amount does not depend on anything else, in particular not on the pool size.

What does differ according to the size of the pool is the variance in the rewards (how much they vary from the average due to randomness) and the maturity time (how long it takes to obtain the rewards). It is always the case that a bigger pool will have less variance and maturity time, and thus for a miner of any size it is better to mine for a pool as large as possible (however, it is better yet to mine for multiple pools simultaneously).

One point where a miner needs to optimize based on his own size is the share difficulty; smaller miners will want easier shares, so they should make sure their pool offers it. While bigger miners should work on more difficult shares to make sure the pool server isn't overloaded.

I don't believe it really matters whether you mine with a small pool or a big pool. In a small pool, you would receive bigger rewards per share, but would receive them less frequently. In a larger pool, you would receive smaller rewards more frequently.

Both pools get the same reward for a block, it's just distributed differently, and the bigger pool finds them more frequently.

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    The whole point of mining in a pool is to smooth your payouts. – David Schwartz Jun 14 '13 at 8:40

From what I know of it and the research I've done personally, bigger pools mean smaller payouts more often, while smaller pools mean bigger payouts less often. Overall you make the same amount over the same amount of time, based on your own mining equipment's productivity. What it comes down to is how often you want to be paid - big lump sum once in a blue moon, or regular micro-payments.

As far is I have experiences and testings on many pools it is best to mine on avreage size of pools. You get most of it. Because if pool is to large than you get many blocks but you get real small payment. If pool is too small you wait for blosk and payment too long. But if pool is somehow average there you still get blocks enough often and payment is a bit higher.

  • A small pool and large pool would have equal payments over a long period of time assuming hash rate never grew. – John T Apr 19 '14 at 7:04

I like your pool because it has an easy Java miner that takes the effort out of configuration! But, if it didn't matter, then why does my math NOT add up?:

The world gets one block (25 BTC) every ten minutes. Nothing on earth can change that for this currency as it is set in this specific protocol.

Being hypothetical:

  • Small pool = 20% and large pool = 80% of all hashing power
  • Your 1 GHash/s miner pulls in say 10% of the shares on the small server
  • Your 1 GHash/s miner pulls in 1/5th of that on a large server as it is only 2% of shares
    • 1 block is mined for this shift
  • A 0.2 small pool is rewarded their 20% of the block == 10% is your work == .02 blocks
  • A 0.8 large pool is rewarded their 80% of the block == 2% is your work == .016 blocks

I understand that over the course of a shift, the hashing power should cause the bigger pool to mine more shares which is supposed to even out the distribution curve, but I think that this is not exactly true either, because it is a "random" drawing for the correct "hash=greater than difficulty" solution to solve the block and continue the work in sequence.

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    The error in your calculation here is that the large pool is 4 times as big as the small pool, so if your miner is 10% of the small pool then it is 2.5% of the large pool, not 2%. 10%*20%=2% and also 2.5%*80%=2%. You can do the same calculations in more generality (e.g., when you are large enough to actually change the proportion of the pool) and the result is the same - your average reward is the same no matter the size of the pool. – Meni Rosenfeld Jun 14 '13 at 6:00

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