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From a miner's point of view which one is better: mining individually or mining in a pool for bitcoin mining? Which is more advantageous?

This is one of the first questions we ask ourselves before embarking on mining. Do I work in a team or alone? There is a multitude of arguments both for and against the pool mining, however most miners today opt for pool mining.

Advantages and disadvantages

In order to give you a clear picture of what the pool mining is, you have to imagine pool mining as a lottery jackpot, the pros and cons are similar. By throwing yourself solo you will not have to share your rewards, but your chances of having one will be significantly reduced. By working in pool, you will have more chances to validate a block to validate a block of transactions and thus to obtain rewards, however these are then distributed among the members of the pool.

Therefore, by joining a pool, you will generate regular revenue streams, even if the gains will be modest compared to the total sum allocated per validated block. Below is an image to illustrate a mining pool, I took LiteCoin as an example, but all pools work the same way.

The difficulty of mining crypto-currencies

In the case of Bitcoin, the level of difficulty is so high today that it is virtually impossible to generate profits by working solo. Except, if you have a miner-filled warehouse held in arctic conditions. If you are a beginner, the pool of minings is a great way to make small profits in a short time. Indeed, these pools encourage small users to stay involved.

Pool Rewards

When choosing a pool, it is important to know how each pool allocates the winnings and which fees (if any) are deducted.

There are a number of formulas in which pools share gains. Most are based on the number of "shares" that a minor submits to the pool as "proof of work".

This concept of sharing is delicate. Keep two things in mind: on the one hand, mining is a process of solving cryptographic puzzles; on the other hand, the mining has a level of difficulty. When a minor "solves a block", there is a level of difficulty corresponding to the solution. This level of difficulty can be considered as a factor of quality. If the difficulty level of a solution is higher than the difficulty level of the whole currency, it adds to the BlockChain and that currency and a currency reward is then awarded.

In addition, the miners pool sets the difficulty level to validate blocks. If a minor can not validate a block, that block is saved as a "share". These shares are not used for nothing but are recorded as "proof of work" to prove that the miners are trying to validate blocks. This also indicates how much processing power has been made available to the pool, the more efficient your hardware is, the more shares are generated.

The simplest version used to distribute gains is the Pay per share (PPS) model; you are paid for each share sent. However, there are limits on the rate paid for "sharing".

The last thing is to know how much the pool will deduct you from fees, because taxes can vary from 1 to 10%, and even some pool do not charge any fees.