[Decryption] Introduction to mining revenue model and its applicable scenarios (revised)

PPS, PPLNS, PPS+... There are so many different profit models in various mining pools that it is hard to keep up. What are the characteristics of each profit model? How can we choose to get higher returns?

The author will give you a brief introduction to several mainstream mining revenue models, and discuss with you the applicable scenarios of each mining revenue model.

PPS, full English name: Pay Per Share.

For mining pools that use this method to distribute mining revenue, when a miner's mining machine submits 1 share ( i.e. the calculation result of the mining task ) , the mining pool calculates the mining revenue that can theoretically be obtained from this share based on the mining difficulty at that time, accumulates it into the mining account, and distributes it on time.

The characteristic of the PPS income model is that the mining income is only related to objective factors such as the mining difficulty at the time of mining, the computing power of the mining machine and the network conditions. It does not change due to the actual income of the mining pool or the luck value, and can ensure the long-term and stable mining income of miners.

PPS mining pools need to pay miners mining income regardless of whether the valid blocks actually mined by the mining pool reach the theoretical level. The mining pool bears the risks of orphan blocks, forks or low luck values. Therefore, the mining fee is slightly higher.

For the same currency, the mining fee of PPS mining pool is 3%-5% higher than that of other mining pools such as PPLNS.

The mining pool that adopts this method to distribute mining income. When the mining machine submits a share, the income of the corresponding share is not calculated immediately. Instead, after the mining pool receives a total of N shares, the total number of coins mined by the mining pool during the period of receiving these N shares is counted, and then the mined coins are distributed according to the proportion of the number of shares submitted by each miner in these N shares.

Characteristics of the PPLNS profit model : The distribution of mining revenue in the PPLNS profit model has a lag, and the revenue will only be distributed after the N shares of this round of mining pool are submitted.

Since PPLNS distributes the coins actually mined by the mining pool , affected by the mining pool's luck value, the income obtained by miners is relatively volatile, which may be a lot or a little . From a probabilistic point of view , the long-term mining income of PPLNS and PPS should be the same.

Due to the PPLNS model, the mining pool does not bear the risks of orphan blocks, forks and low luck values ​​(block output is lower than the theoretical value). You will get as many coins as you mine , and the mining fee is relatively low.

However, it is also possible that no blocks are produced for a long time, or very few blocks are produced, and the output is far lower than the input.

PPS+ and FPPS are revenue models derived from PPS. They are slightly different, but the long-term benefits are basically the same.

The PPS+ model is based on the PPS model, and the mining fees mined by the mining pool are distributed according to the proportion of computing power contributed by the miners on that day.

Compared with the PPS model, an additional portion of mining income is added.

FPPS mode stands for Full PPS. This revenue model also adds the distribution of mining fees on the basis of PPS. However, the mining fees it distributes are based on the average mining fee ratio of the entire network on that day, not the actual mining fee income of the mining pool.

Due to the inconsistent distribution rules of mining fees in the FPPS and PPS+ modes, the daily mining income will deviate due to the different mining fee income of the mining pool. However, in the long run, excluding the influence of luck, the mining income of the two mining modes is basically the same.

The PPLNS profit model is accidental and delayed. It is not recommended for miners who engage in short-term speculative mining or rent computing power to mine small currencies with the same algorithm during high-yield periods .

In addition, for miners with small computing power or those who are new to mining , it is recommended to use the PPS mode to obtain relatively stable mining income.

If you want to try your luck , you can use the PPLNS mode to mine . Maybe in the short term, the mining pool will frequently produce blocks and you can get more mining income. Who can say for sure?

However, it is not recommended to use the PPLNS mining pool with too small computing power. Small computing power means a smaller possibility of block explosion. Without block explosion, miners will not be able to share the mining income. Please choose carefully.

If the miner's computing power is large enough to independently generate blocks every day , he can choose SOLO mode mining , and all mining income belongs to him, and the income is intuitive and transparent. At present, the basic computing power of mainstream large currencies (BTC, LTC, ETH, etc.) is too large, and the probability of a single miner's computing power to achieve independent block generation is too small, so it is no longer suitable for SOLO mode mining. However, for some currencies that have additional block generation income in addition to regular block rewards, such as XDAG, you can try SOLO mode mining.

For currencies with higher transfer fees such as BTC and ETH , the mining fee ratio is also relatively high. Using PPS+ or FPPS mode for mining can generate 1-2% higher income than PPS mode, or even higher (if it is during a period of frequent transactions, this ratio will be even greater).

Therefore, miners can choose a suitable profit model based on the currency and their own actual situation to obtain stable and relatively high mining income.