Mining bitcoin alone is risky and often unprofitable.
Mining is in fact a competition, in which the winner is whoever manages to mine a block first. Because the competition is fierce and has enormous amounts of hashpower, it is very difficult for a single miner to compete. It would take so much hashpower that it would require millions of dollars in investment, with no real guarantee of success.
Mining pools are platforms that combine the computing power of many miners and distribute any income from the mining activity in proportion to the amount of hashpower made available to the pool by the individual miners.
Most of the new Bitcoin blocks are currently being mined by mining pools.
These pools bring together huge amounts of hashpower from a large number of different miners and are therefore extremely competitive. This also affects the choice of the pool a miner can join, because the most powerful ones are also the ones that can mine more blocks, but they are also the ones with the most competition from other miners, and therefore lower revenue distribution percentages.
Being a Bitcoin miner: the pools
Currently, the one with the highest hashrate is F2Pool. This is a long-standing Chinese mining pool that was founded in 2013. It alone owns almost 20% of all Bitcoin hashrate, and besides BTC it mines 40 other cryptocurrencies.
As far as Bitcoin is concerned, the pool keeps 2.5% of its revenue as commission costs and pays out daily.
In second place there is Poolin, with over 12% of Bitcoin’s hashrate. It is a more recent pool, established in 2017, and in addition to BTC also mines ETH, BCH, BSV, LTC and other cryptocurrencies.
Poolin also retains 2.5% of BTC’s mining fees.
In third place among Bitcoin’s largest hashrate holders is Binance, which is not a pool but a single miner, while in fourth place there is Huobi, another exchange that mines on its own.
In fifth place, with almost 10% of the hashrate, is BTC.com‘s mining pool, owned by the well-known ASIC manufacturer Bitmain. Like F2Pool it is Chinese and has existed since 2013.
It also mines other cryptocurrencies besides bitcoin and has a 4% commission on BTC’s mining.
In sixth place, and last of the large mining pools, is AntPool, with 9.9% of the hashrate. It is the second mining pool controlled by Bitmain, which therefore in total controls almost 20% of Bitcoin’s total hashrate. However, until a few months ago this percentage was higher.
AntPool is also Chinese, was founded in 2014, and mines seven other cryptocurrencies, including Dash and Monero (XMR).
In reality, there are many other mining pools, and these are only the main ones. It should be noted that combining the hashrates of F2Pool, Poolin, BTC.com and AntPool accounts for more than 50% of Bitcoin’s total hashrate, and adding the two major single miners, Binance and Huobi, gives a total of almost 3/4.
So all the other pools, put together with the other single miners, barely make up 25% of the total hashrate, but in some cases can offer better conditions than the first four.
The individual miner who wants to join a pool must compare the various parameters of the various offers in order to choose the one that best suits his or her business.