What is a bitcoin mining pool – Best Beginner’s Guide

What is a bitcoin mining pool? In this article, I will explain the outline and mechanism of the mining pool of bitcoin (bitcoin). In addition to the developed information such as basic information on the mining pool, the history of the birth of the mining pool and the like, in the end, we will also introduce concrete mining pool, so please have a look.

What is a bitcoin mining pool?

Recently, Japanese companies such as GMO and DMM are talking about bitcoin mining by participating in the bitcoin mining business.

Participating in a mining pool as a way to earn mining fees has become mainstream in recent times, but those who view this article are more likely to have the question of “mining pool in the first place” it might be.

In this article, in addition to “basic information on bitcoin mining pool”, we explain detailed contents such as the structure and features of the mining pool.

First of all, let’s review the outline of the mining pool.

Outline of a bitcoin mining pool

A mining pool is a community where multiple nodes cooperate to mining.

A node is a terminal connected to a bitcoin network, such as a PC or a mobile phone.

  • Among nodes, mining nodes are called minor nodes.

Briefly, a mining pool is a group that cooperates and performs mining, not individuals.

This relationship is similar to the relationship between a company and an employee.

For example, it can be said that “company = mining pool”, “employee = minor”.

By using the employee (minor) effort (computing power), companies efficiently minerize bitcoins and give compensation to employees.

At the beginning of the 2009 bitcoin issue, the concept of mining pool existed, but many people were mining individually.

However, due to the high probability of mining success, mining was cooperatively started.

By the way, performing mining by participating in a mining pool is called pool mining.


Reference information

The concept of “pool of computing power” has appeared in Satoshi Nakamoto’s paper Bitcoin: A Peer-to-Peer Electronic Cash System.

Although it existed as a concept before bitcoin was put into practical use, the first mining pool mining succeeded in 2010.

Reference source: Arvind Narayanan, tthe extbook of virtual currency  Nikkei BP company, pp 229

So far, I think that the mining pool understood that “a community that performs mining with multiple nodes, not a single body “.

In the next paragraph, we will explain the mining pool mechanism, such as ” mining pool mining method ” and ” mining pool fee fixing method “.

Mechanism of a mining pool

The structure of the mining pool is briefly summarized as follows.

  • The pool administrator is the recipient of the reward and the minor who participates miners the same block. Then, when mining is successful, the fee paid to the pool administrator is distributed by participants according to the workload of mining.

I am using the word “workload “, but maybe some people have doubts such as ” what is workload in the first place “, ” how to grasp workload “?

However, in order to understand these, we must understand that ” what is mining originally ” in the first place.

If you are a reader who wants to know the contents of the workload before, please see the chapter on the work of mining.

Next, I will briefly explain about “mining”.

What is mining in the first place

In the first place, mining is a series of tasks to add bitcoin transaction data to the blockchain.

The specific work content is to do the calculation work ” to set the hash value to a fixed number or less, to find the target (nonce) “.

The hash value is a value obtained by converting certain data into a hash value. If the original data changes, the hashed data also changes.

Utilizing this property, in the bitcoin mining, work is performed to find data which is called a nonce, which has a certain hash + nonce ≤ a fixed numerical value.

Since there is no reasonable way to seek a nonce, we have to combine data on a round-robin basis.

Currently, its computational complexity is generally said to be several trillion times or more.

If you would like to know more about bitcoin mining, please see the article “Mining mining to support bitcoins (mining)”.

Now that you understand the outline of mining, let’s review the contents of the main work “mining workload” in the next chapter.

What is the workload of mining

The workload of mining refers to “the amount of calculations you have done to find a nonce .”

In order to find a nonce, we needed more than a few trillions of calculation work.

Specifically, the workload of mining is the number of calculations performed by each minor among the trillions of calculations.

However, in the mining pool, we do not know the exact calculation amount of each node.

In the next chapter, ” How does the pool administrator manage the workload of individual nodes? ” And ” How does the node prove my workload? “

Proof method of workload

In the mining pool, the node proves its workload in a probabilistic manner.

I will explain it in concrete examples.

In the example above, you asked for a nonce on the condition that the hash is “under 0000001”.

When doing this calculation work, there are times when “00001 …” or “000001 …” and others with 0s continuing are sometimes required .

Actually, finding these “less than 0000001 or less” is a very difficult task.

Therefore, it is possible to prove probabilistically how much each minor worked with the amount found less than the condition.

The pool administrator also distributes the fee based on that data.

In this paragraph, we have checked the mechanism of the bit coin’s mining pool, but in the ” mining pool, the same block is mined cooperatively by participants “, “the workload is the amount of computation I think that you understood that proof of work amount proves with probability theory.

This mining pool is very excellent as an idea to enhance the probability of mining success.

So, is there such a concern in such a mining pool?

We will explain the influence and concerns of mining pool from the next paragraph.

Let’s look at what kind of influence and concern you have with a bitcoin that does not have a central administrator.

(* 2) Hexadecimal numbers are the numbers that carry up when the number of each digit becomes “16”. The number of 10 or more is expressed as follows.

10 = A 11 = B 12 = C 13 = D 14 = E 15 = F 16 = (carry)

Example) 46 = 00002E in decimal

Influence of mining pool ~ What is the influence on the bitcoin that the central administrator does not exist ~

Mining pool has a strong influence when changing important specifications of bitcoins .

Because there is no central manager in the bitcoin , important specification changes are executed under the agreement of the entire bit coin user.

Mining is a work that seems to be a work for getting a reward, but it is originally a work to approve transactions of bitcoins.

In other words, mining pool is considered to have a strong influence because it carries out transaction approval work which is important in supporting the bitcoin system.


Reference information

Actually, when the specification change was made, bitcoin Segwita part of the mining pool objected, and a derived currency different from the bitcoin was born.

The derived currency that was born at this time is a bitcoin cache.

For those who want to see details about Segwit and bitcoin caches, please see the article “What is bitcoin cache?”


Did you understand that the mining pool has influence?

Since mining pool has been engaged in the approval of transactions of bitcoins, it can be said that it plays a very important role in establishing bitcoins.

However, although the mining pool which is mining to support bitcoin, a concern also exists.

Next, let’s check it.

Concern of mining pool ~ 51% problem ~

The mining pool has a concern of 51% problem.

I will explain this problem in detail. Concern of mining pool ~ 51% problem ~

The “51% problem (attack)”, control at least a certain mining rate (computing power) by ” such as tampering and double payment fraud ” or ” interference a transaction approval problems becomes possible” It refers to.

With bitcoin, the higher the computing capacity is, the higher the success probability of mining is generated.

By mining at a speed higher than the mining speed of all other participants, fraud such as tampering with bitcoins becomes possible.

Indeed, in 2013, the computing power of the mining pool ” Ghash.io ” was likely to exceed 50% of the total, and the 51% problem became obvious.

What is the share of the mining pool?

What is the share of the mining pool

Image reference source: bitcoin hash rate distribution – Blockchain.info 2017/12/26 data

This image is called a hash rate distribution diagram, and it shows the ratio of the computing power of the mining tool possessed by each mining pool.

Hash rate is the computational power required for mining.

This distribution diagram shows that the higher the mining pool, the higher the probability of success in mining.

Let’s look at Antpool , which is especially famous among mining pools that are top of the hash rate.

Antpool

Antpool is a mining pool managed by Bitmain technologies Limited, a semiconductor manufacturing company in China.

In Bitmain, Bitmain is famous for developing an Asic tool for mining called Antminer.

Asic is an abbreviation for application specific integrated circuit and is an integrated circuit developed for specific applications.

This Asic mining tool has the merit of high computing power and low power consumption.

Antpool holds mining market by taking advantage of the fact that we can introduce our latest model which we developed earlier.

If you would like to participate in Antpool, please see this Antpool official website.

Summary – Bitcoin Mining Pool

To summarize the contents of this article, the bit coin mining pool had the following characteristics, did not it?

  • Mine on multiple nodes
  • Mining rewards are divided
  • 51% Concerned concern

The bit coin mining pool is attracting attention as an investment destination now.

Besides offering direct calculation power, mining pool also implements a service called cloud mining, in which compensation is paid according to the fund by providing funds .

Who are interested in, certainly “What is the recent topic of cloud mining?” Please read the article “.