I'm thinking of developing a mining pool for myself and close friends. I realize that there are large pools like BTC Guild, Slush, etc. that we could join, but I like the idea of creating my own.

I'm taking delivery of 6 Neptune miners from KnC in Q2 that will give me 18 TH/s. I know that's not a great deal, but it's a start...and my friends will add their own computing power as well.

To be honest, I'm not a "technical" kinda guy; I'm a business man. So here's my question(s):

1) How would I go about developing a pool and handle automatic payouts? 2) How could I create a dashboard that allows my friends (and maybe one day the public) to see their mining activity?

I appreciate and look forward to your responses.

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    You can start a pool with any amount of hash power, all you really need is a server and maybe a website. – John T Jan 12 '14 at 0:16
  • Yes, jtorba, any amount (or even zero) will work. But some may argue that it is hopeless, and maybe in that sense not enough, if there is so little to start with that it is not attractive for miners to join the pool. The hashrate given here is not completely negligible, around 0.15% of all current miners, but then again still little, so I'm tempted to call this a very valid, if maybe vague, especially since the headline question (is this enough hashrate?) and the 2 questions in the body (how do I do it?) are very different. – pyramids Jan 12 '14 at 8:28
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    In the long run, you'd earn much more money building your own pool (even if nobody but you mines in it) than joining an already existing pool: pool managers take a fee off the fees and block earnings, whereas in your own pool you'd get both for yourself. In the short term, of course, it's a probabilistic event - you could have periods of several days (even weeks!) with no earnings at all, as well as lucky bursts of finding several ones in a short time space. Joining a big pool would provide you a much more constant flow of money, though smaller in the long term. – Joe Pineda Feb 10 '14 at 16:43

Setting up a mining pool will require some programming, so based on your self-identification as a business man, I would suggest to start with asking yourself how much this will be worth to you. Many would say that running a bitcoin pool is likely a bit of an altruistic endeavour: If you want to attract people to join your pool, you are competing with others. This competition drives pool payouts close to 100% payout of block reward plus earned transaction fees plus free insurance against the stochastic nature of actually finding a block, and possibly against the pool making a mistake such as losing bitcoin temporarily stored for participants.

However, if you are a business man through and through, there might yet be a profit motive to be found: Successfully running a pool certainly will gain you credentials in the bitcoin world, which could be valuable for doing other bitcoin business. Then hypothetically having a large pool could help in offering future services like enabling bitcoin businesses to more quickly accept bitcoin payments by insuring against double spending. Finally, I have been wondering about pairing a mining pool with a bingo-like gambling element, where customers could bet on when the pool will next find a block (for the combined effect of extra revenue and helping to insure the pool operator against not finding a block for a prolonged time). Note that both the payment insurance and the gambling idea is likely to raise legal issues and may be expensive to start in a law-abiding way due to legal/licensing overhead.

Whether running a pool is worth it to you depends on the value you attach to all of that. To help you make an estimate, consider that with your hashrate of 18 TH/s you'd contribute 0.15% of the total hashrate today (and less tomorrow), see e.g. the stats page bitcoincharts.com/bitcoin. That means you need to wait, on average, about 670 blocks or approximately five days until you find a block, with actual values fluctuating wildly according to the Poisson distribution, provided none of your miners maliciously cheats and withholds blocks found. Hence you will either need tremendous tolerance about actual block rewards and payouts possibly diverging purely by chance, or more hash power. Or a vain or altruistic outlook on this project, or a side business associated with running the mining pool.

  • Thank you for your response; it's greatly appreciated. Nice idea about combining a pool with a bingo-like element. I'm not sure what the laws would be on that, but I know who to ask. I'm sure a "sweepstakes" would legal in most countries. I.E. give an extra bitcoin to a user every 5th block that's found or something similar in nature. – user12068 Jan 11 '14 at 22:01
  • Well, I cannot comment on the law. But the mathematical nature of mining makes it such that the biggest boon would be to compensate your uncertainty of when you mine a block. For you as pool operator, that's a risk and a liability; for someone wanting to play a bingo/lotto-like game, the same variability is a coveted bonus and worth a premium. If you sell all of your uncertainty, you would, however, have a ca. 24.9-bitcoin-pot to be distributed for guessing which block your pool, rather than someone else, will mine. Maybe not quite just sweepstakes. Or maybe it is; let me know if you find out. – pyramids Jan 12 '14 at 8:16

welcome to bitcoin stack exchange.

its generally frowned upon to ask for entire walkthroughs of large projects. It's suggested that you instead make some attempt at the problem first, and state what you have done.

To answer the question in the title of your post, yes, you will find a block every 6-10 days with 18 TH/s depending on the increase in difficulty by then (currently you would find one every 4 days). You can better project the time taken by consulting a chart on difficulty. That is still a fair amount of luck though, so if you are risk averse it would benefit you to join a pool.

  • Thank you for your response; it's greatly appreciated. It seem that the difficulty will increase significantly once KnC's new 3 TH/s miners hit the market. – user12068 Jan 11 '14 at 21:57

If you want to create your own pool I would suggest creating your own p2pool node. Not only do you get all of your own blocks but you get a small percentage of any shares the public might add that contribute to blocks.

  • P2Pool doesn't work like that. You contribute shares to a distributed p2p pool and get paid when the pool find a block. Also, instead of start their own node, the public can mine on someone else's node. The node owner can charge a fee. – Bardi Harborow Jul 2 '14 at 9:14

Well im looking for the answer myself, however the calculations don't seem to promising , here is what i have

bitman power is 465.81 PH/s (460000000000000) my power atm is 4.5 TH (4500000000)

4500000000 / 460000000000000 = 102222.22
102222.22 X more powerful than me

there average mine is 1 hour ... and what they do in an hour would take me 4259.26 Days

If my calculations are correct..

but they have mined some blocks in 4 mins, which should take me 284 days i cant see how we can actually mine a block with these statistics...

  • -1 This answer is not useful. It only addresses a small portion of the asker's question and doesn't provide new insights. – Your hash rate is a quarter of the asker's which three year's ago was deemed to be insufficient to provide reliable payouts. – Murch Dec 23 '16 at 10:05

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