What is Bitcoin Pooled Mining?
Bitcoin pooled mining is a way for multiple users to work together to mine bitcoins, and to share the benefits fairly.
Why do I need bitcoin pool?
Bitcoins are ordinarily only ever created in chunks of 50 at a time, with the whole 50 paid to a single person. Furthermore, the race to get the 50 BTC prize in a given block is highly competitive.
If you set out mining on your own, it may be a long time before you can make a return. Pooled mining allows you to receive smaller, more frequent, steadier payouts instead. If you have a slower computer, or a CPU miner, then pooled mining may be the only way that you will ever mine any bitcoins at all.
How does bitcoin pool work?
Our server gives users blocks of very low difficulty to solve. Each solution found is registered as one 'share'. Occasionally, a solution will happen to also meet the full-strength difficulty requirements of the Bitcoin network, resulting in a successful 50 BTC minting.
This 50 BTC is divided among all of the users that contributed to that round, weighted by the number of shares that they earned. Therefore, the reward earned by a given user is given by the following formula:
Shares do not carry over from one round to the next. When the pool mine a block, only users who worked on that block are rewarded, and only for work they did on that block. This is an unavoidable consequence of the way that Bitcoin mining in general works.
The 2% fee is used to keep this service alive.
Key features
- Service lifetime & operator trust - Users have to trust pool operators, because pools aren't cheat-proof from the side of the operator. mining.bitcoin.cz was the first Bitcoin mining pool, has been operating consistently since December 2010 and has a long history of stable and accurate payouts.
- Namecoin Merged Mining - The pool has been mining Bitcoins and Namecoins since October 2011. Thanks to this, users have a much higher mining income than mining on another Bitcoin-only pool.
- Score-based reward system - Pool uses a fair distribution of rewards between members, making the pool hop-resistant. This has been mathematicaly proven.
- X-Long-Polling* - This miner extension improves overall mining efficiency of connected miners by lowering stale share ratio below 1%.
- X-Roll-NTime* - Another miner extension, which improves network efficiency, especially for fast mining rigs.
How do I get started?
1. Install Bitcoin miner on your computer
All major CPU/GPU miners support pooled mining:
- Kiv's GUI miner (Windows, recommended for beginners) (instructions)
- m0mchil's GPU miner (instructions)
- phoenix GUI miner (instructions)
- Diablo's GPU miner (instructions)
- ckolivas's CGMINER (CPU/GPU) (instructions)
- puddinpop's CPU/GPU miners (instructions)
2. Sign up with a bitcoin.cz account
- Sign up
- Verify email (may be used for troubleshooting)
- Login to application
- Enter your wallet address - can be also online wallet registered on MtGox or Intersango
- Register your workers. You can use one worker account for all your miners, but I recommend to use separate account for every miner for easier troubleshooting.
3. Run miner
Run your own CPU/GPU miner with the worker credentials you gave earlier, and connect it to following URL:
or
http://api2.bitcoin.cz:8332
or
http://pool57wkuu5yuhzb.onion:8332
(anonymous mining over Tor network)
Only the newest version of poclbm miner have direct support for Tor mining at this moment.
Is it safe?
In theory, as the Bitcoin pool operator, I could keep the 50 BTC from a block found by the pool for myself. I'm not going to do this, but I completely accept that people do not trust the pool operator. It is their freedom of choice, and Bitcoin is about freedom.
I created the Bitcoin pool service with the rising difficulty of mining in mind because I'd like to return my investment to mining hardware. There used to be days when I never found a block at all, even with the strongest GPU on the market, which made me uncomfortable. The periodic micropayments from the mining pool offer a steadier payout, which lowers the riskiness of my investment in the Bitcoin market.
About
You can contact me via email at info(at)bitcoin.cz, or via the bitcointalk.org forum at the username slush. Please don't ask me how to configure your preferred miner, it is impossible to help all of you. Please use forum links above and ask the miner's community instead.