What Is a Bitcoin Mining Pool?

A bitcoin mining pool splits each block reward by the work each miner submits. See how pools pay, how often they find blocks and who builds the block.

By Jonathan West · Updated November 10, 2026

Miners in a bitcoin mining pool are paid by the shares of work they submit, and the payout scheme sets how steady that income is.

Joining a pool smooths out the severe payment variance of mining alone.

About bitcoin mining pools

To compare pools, see our guide to the best Bitcoin mining pools. For proof-of-work background, read how Bitcoin mining works. Some schemes pay a fixed rate for every share. Others pay only when the pool finds a block.

How it actually works

In pooled mining, the pool coordinates work across individual mining machines, which are overwhelmingly ASICs (application-specific integrated circuits). As explained in the Bitcoin Developer Guide, mining today takes two forms. Solo miners work alone for the full block reward with long stretches between payments.

In pooled mining, participants combine resources for lower payout variance. The pool operator sets a target difficulty threshold that is easier than the Bitcoin network difficulty target.

A share is easier to find than a block. Mining hardware routinely produces block headers that hash below the pool target without meeting the full network requirement. Results meeting this easier target go to the pool as a share.

This proves mathematically that the miner checked a measurable portion of the possible hash values. Sometimes a share also falls below the network target. The pool broadcasts that completed block to the Bitcoin network to collect the 3.125 BTC (Bitcoin) subsidy and transaction fees.

The pool operator collects the block proceeds and distributes them among participants according to its reward rules. Under the standard Stratum V1 setup, the pool operator chooses the transactions.

It also sends miners the minimal information they need to build block headers, including a coinbase transaction that pays the pool. Solo miners build their own candidate blocks, while a miner under the standard Stratum V1 setup hashes the template the pool operator sends.

How a Bitcoin Mining Pool Pays Its Miners

Different mining pools use different reward distribution systems to divide block rewards among participating miners. Under PPS (Pay Per Share), each submitted share is worth a specified amount of BTC.

The pool operator absorbs the luck of block-finding. It pays a predictable rate for all valid work.

Under FPPS (Full Pay Per Share), the pool calculates a standard transaction fee within a set period. It distributes the block subsidy and fee portions by hash power contributed. Bitcoin Wiki says PPS carries the highest fee because the pool operator takes the risk.

Under proportional schemes, the pool splits each block reward by the shares each miner submitted in that round, and pays only after a block is found. Under PPLNS (Pay Per Last N Shares), the pool looks at the last N shares submitted, whatever the round boundaries. The miner carries the pool's luck and receives lumpy payouts.

TIDES (Transparent Index of Distinct Extended Shares) divides block rewards by percent. It weights rewards by effort on the most recently found proofs so transaction fees are included. Bitcoin Wiki adds that the TIDES proof period is chosen so each proof is paid on average eight times, and it lists OCEAN as using this reward system.

The stated fee alone does not tell the full story when choosing between payout schemes. For example, F2Pool publishes an FPPS fee of 4.0 percent and a PPLNS fee of 2.0 percent, alongside a minimum payout threshold of 0.005 BTC. Consider 1 BTC of counted reward.

Under FPPS, the pool retains 0.04 BTC while the miner keeps 0.96 BTC. Under PPLNS, the pool retains 0.02 BTC while the miner keeps 0.98 BTC. The lower PPLNS fee requires the miner to accept uneven payment intervals between discovered blocks.

How Often a Bitcoin Mining Pool Finds a Block

In our internal modeling, we calculated how often pools of different sizes find a block, using the mempool.space block data of 10 November 2026. Pool block intervals follow a simple formula. The average time between blocks equals 10 minutes divided by the pool's share of mined blocks.

The chance of zero blocks over N intervals equals one minus that share raised to the power N. Live block time on mempool.space was about 645.6 seconds at capture. This makes real-world block intervals about 7.6 percent longer than the standard 600-second target.

The largest pool represents Foundry USA with 25.7 percent of mined blocks over one month. It finds a block about every 39 minutes on average. At the live network pace, this extends to about 42 minutes.

This pool size produces about 37 blocks a day. The chance of experiencing a day or week without a block is effectively zero.

A 10 percent pool finds a block about every 100 minutes, which is roughly 1.7 hours. A 10 percent pool averages 14.4 blocks a day. The chance of a day with no block is about 0.000026 percent, and a week with no block is effectively zero.

A 1 percent pool finds a block about every 1,000 minutes, which equates to roughly 16.7 hours. A pool of this size averages 1.44 blocks a day. It faces a 23.5 percent chance of an empty day and a 0.004 percent chance of an empty week.

A 0.1 percent pool finds a block about every 10,000 minutes, or approximately 6.9 days. This pool averages just 0.144 blocks a day. It faces an 86.6 percent chance of an empty day and a 36.5 percent chance of an empty week.

These intervals illustrate why small-pool PPLNS payouts arrive in unpredictable lumps. When a 0.1 percent or 1 percent pool encounters an extended dry spell, miners on PPLNS receive nothing until a block is solved.

For the largest pool solving roughly 37 blocks daily, lumpiness is negligible. The operator fee, minimum payout threshold, and terms of service are the primary points of comparison.

Who Builds the Block and What Stratum V2 Changes

Under the standard Stratum V1 setup, the pool operator chooses the block's transactions. The Bitcoin Developer Guide says miners using Stratum cannot inspect or add transactions to the block they are mining. The mining software receives only the block header data and coinbase parameters required to hash for shares.

In pools running the standard Stratum V1 setup, the pool operator therefore decides which transactions go into a block. OCEAN lets miners build their own templates with DATUM, so template choice depends on the pool and on the protocol version.

The Stratum V2 specification introduces the Job Declaration Protocol to shift template construction back toward individual miners. The specification states that the protocol coordinates custom work. This avoids scenarios where pools unilaterally impose work on miners, leaving participating pools responsible only for accounting shares and distributing rewards.

A Job Declarator Client on the miner side builds the candidate block. It declares custom jobs to a Job Declarator Server run by the pool operator.

As published on the Stratum V2 project site, the protocol upgrades the original 2012 specification by replacing JSON messages with an encrypted binary format. The project site notes that this format reduces bandwidth requirements by roughly 60 percent for pools and 70 percent for miners while adding connection authentication.

A few mining pools dominate block space or act as proxies. The project documentation highlights that centralized transaction selection creates censorship risks across the network.

Stratum V2 is an open technical specification, and the sources we reviewed do not state how many pools run it today. The protocol gives individual miners an architectural path to run local nodes. Miners can select transactions without giving up the variance-smoothing benefits of pooled reward distribution.

How Concentrated Mining Pools Are Today

Block attribution metrics captured from mempool.space on 10 November 2026 show that a small group of pool operators constructs a large majority of Bitcoin blocks. These metrics derive from coinbase tags and payout script addresses rather than direct physical hashrate telemetry.

A one-month window tracked 4,534 blocks. Foundry USA accounted for 25.7 percent of blocks, AntPool held 20.4 percent, F2Pool represented 16.5 percent, and ViaBTC made up 9.3 percent.

Across multiple measurement windows, the top four entities consistently generated between 70.0 and 71.9 percent of all blocks. A one-week sample covered 904 blocks. Foundry USA captured 24.8 percent, AntPool took 19.8 percent, F2Pool logged 16.4 percent, and ViaBTC captured 9.6 percent, representing 70.6 percent combined.

A three-month window covered 13,419 blocks. Foundry USA captured 25.4 percent, AntPool held 19.9 percent, F2Pool had 15.8 percent, and ViaBTC accounted for 8.9 percent, totaling 70.0 percent.

These concentration figures have structural boundaries. Untagged blocks appeared in small quantities across the samples. They totaled 3 blocks over one week, 19 blocks over one month, and 25 blocks over three months.

Miners can point hashing power through proxies without updating physical hardware. Coinbase attribution therefore reflects block assembly points rather than permanent ownership of computing equipment.

Our Takeaway on Joining a Bitcoin Mining Pool

Based on our internal modeling of block variance, joining a bitcoin mining pool is the practical choice for most hardware owners. The exception is anyone controlling enterprise-scale hashrate.

An FPPS payout scheme fits a miner who wants steady daily income and accepts a higher stated fee. A PPLNS scheme fits a miner who accepts lumpy payouts for a lower stated fee.

At a large pool solving dozens of blocks each day, the variance penalty of PPLNS largely disappears. Pool fees, withdrawal thresholds, and counterparty terms should guide your decision. Under the standard Stratum V1 setup, your hashrate also backs the pool operator's transaction choices, unless the pool offers miner-built templates (OCEAN DATUM) or adopts Stratum V2 job declaration.

Who Should Not Join a Bitcoin Mining Pool

Miners running tens of petahashes per second (PH/s) of computing capacity may choose to bypass mining pools entirely. Our internal modeling evaluated solo mining requirements. Roughly 12 to 13 PH/s of hashrate is needed for even 50 percent odds of finding a block alone in a year.

Miners holding that volume of hardware can review solo mining Bitcoin. Solo mining lets you keep the entire 3.125 BTC block reward and transaction fees without paying pool fees.

Readers who want a ranked list of pools should review our breakdown of the best Bitcoin mining pools. Miners who want profit numbers should check our crypto mining calculator before selecting a pool.

What Would Change Our Answer

Several conditions would change our answer. Our analysis would shift if the top four pools lost their 70 percent share or altered fee structures and payout models. The template statements would also change if more pools offered miner-built templates, as OCEAN does with DATUM, or if the largest pools adopted Stratum V2 job declaration.

Start here

1Determine your total hashing power in terahashes per second (TH/s) or petahashes per second (PH/s) to evaluate your expected variance across different pool sizes.
2Decide whether your cash flow requires predictable FPPS payments or if you can accept the payment variance of PPLNS in exchange for a lower fee.
3Review the pool's published minimum payout threshold to ensure your machine generates enough daily shares to withdraw funds regularly.
4Configure your ASIC mining hardware with the pool's primary and backup Stratum server URLs alongside your dedicated worker name.
5Save your personal non-custodial Bitcoin wallet payout address directly inside the mining pool dashboard to receive settled balances.
6Check your hardware dashboard regularly to confirm that the pool operator is registering and accepting your submitted shares.

Strengths

Pooled mining lowers payment variance, converting infrequent solo block discoveries into more regular share payouts.
Individual miners with modest hardware setups can participate in network security and earn proportional fractions of the block subsidy.
FPPS payout schemes shift the risk of pool luck onto the pool operator.
Miners can switch hashing power between different pools by changing connection configurations without modifying their physical machines.

Common misunderstandings

Pool operators deduct service fees from block rewards, which vary across pools and payout schemes.
Under the standard Stratum V1 setup, the pool operator chooses the block's transactions, unless the pool offers miner-built templates such as OCEAN's DATUM.
Small pools operating under PPLNS payout schemes can experience prolonged dry spells that delay earnings for days or weeks.
Mining pools can enforce payout minimums that hold small balances until your hardware accumulates enough shares to clear the threshold.

Common questions

What is a mining pool?

A mining pool is a group of miners who hash for the same blocks. They split each block reward by the shares of work each miner submitted. The pool operator collects the reward and pays each miner under the payout scheme the pool uses.

What are Bitcoin mining shares?

Bitcoin mining shares are mathematical proofs submitted by individual miners showing that their hardware performed work on a candidate block. A share represents a block header that meets a difficulty threshold set by the pool operator. That threshold is easier than the global Bitcoin network difficulty.

How often do mining pools pay out?

Mining pool payout frequency depends entirely on the pool's reward scheme, its block-finding frequency, and its published minimum withdrawal threshold. Pools paying per share (PPS or FPPS) do not wait for a block, while PPLNS pays only when the pool finds one. Funds reach your own wallet once your balance clears the pool's minimum payout, such as the 0.005 BTC F2Pool publishes.

Are Bitcoin mining pools profitable?

Profitability in Bitcoin mining depends on your hardware electrical efficiency, operational electricity costs, network difficulty, and pool fees rather than the pool itself. You can evaluate your hardware efficiency against current operating expenses by using our crypto mining calculator.

What is the difference between Stratum V1 and V2?

Stratum V1 uses JSON messages and, under the standard setup, the pool operator chooses the block's transactions. Stratum V2 uses an encrypted binary format and a Job Declaration Protocol that lets miners choose their own transactions. Stratum V2 also reduces communication bandwidth by roughly 60 percent for pools and 70 percent for miners.

How do I join a Bitcoin mining pool?

To join a pool, register an account on the pool platform. Then enter your payout address and point your ASIC hardware to the pool's Stratum endpoint. You can compare features across platforms in our guide to the best Bitcoin mining pools. Review those options before connecting your hardware to a bitcoin mining pool.

Sources

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