How do block rewards work with a mining pool?

I understand there are a number of different schemes for sharing rewards.

My question is about the block reward itself, and how it's shared. If only one miner (typically a pool) can find a reward, that means that a pool doesn't get a reward for every block processed. Yet somehow, the miner is still paid, even if no block is found.

Are all the shares submitted between blocks found counted? ie. If a pool finds a block every 10 blocks, do the shares from the other 9 get added together and the entire block reward split across all work done on the found and previously unsuccessful blocks based on the share scheme?

Mr.Nobody

Posted 2017-07-10T06:46:09.973

Reputation: 340

Answers

As others have said schemes differ. But to try to answer the question you asked:

Are all the shares submitted between blocks found counted? ie. If a pool finds a block every 10 blocks, do the shares from the other 9 get added together and the entire block reward split across all work done on the found and previously unsuccessful blocks based on the share scheme?

Probably not. That would be a terrible scheme. Assume a pool has a constant hash rate. Right after it has found a block, it's just as likely to find another block in the next minute as it is when it hasn't found a block for a long time. But the reward per share will be much higher if the pool finds a block shortly after finding another block and much lower if the pool hasn't found a block in a long time.

So a pool that counted every share since it last found a block would likely see a huge influx of users right after it found a block, since the expected reward per share will be abnormally high.

And if the pool is unlucky and hasn't found a block in a long time, the number of counted shares will be abnormally high, making the reward abnormally low. This will cause miners to abandon the pool.

So counting all shares since the last found block is perhaps the worst reward scheme possible.

David Schwartz

Posted 2017-07-10T06:46:09.973

Reputation: 46 931

Then how is that shares submitted during blocks that do not result in a valid has still get paid? Where is that coin coming from? I've used pools with a number of different schemes, and all of them pay at least something for every valid share submitted. – Mr.Nobody – 2017-07-11T01:37:11.700

Look up PPS, PPLNS, Prop reward schedules. – Pieter Wuille – 2017-07-11T01:50:43.830

@ErikFunkenbusch As has been said a few times, it depends on the reward scheme which varies widely between pools. – David Schwartz – 2017-07-11T02:22:48.430

@DavidSchwartz Actually, that is pretty much what proportional payout pools used to do, and the problem you're describing was heavily exploited in practice (pool hopping). No pool still uses proportional payouts, but early on they were pretty much the only popular scheme. – Pieter Wuille – 2017-07-11T02:37:52.377

There are different pools and different mechanisms, to distribute the funds. I suggest to read it here: http://chimera.labs.oreilly.com/books/1234000001802/ch08.html#mining_pools

pebwindkraft

Posted 2017-07-10T06:46:09.973

Reputation: 4 568

I know there are different schemes. I have a very specific question that should apply to all schemes. your link does not answer that question. – Mr.Nobody – 2017-07-10T14:44:30.090

@ErikFunkenbusch I don't see anything in your question that applies to all schemes. Which shares count varies by scheme. – David Schwartz – 2017-07-11T00:25:12.390