What is a bitcoin mining pool?

A bitcoin mining pool is a group of miners who combine their computing power and split the block rewards in proportion to how much work each one contributes. Pools exist because finding a block alone has become very unlikely for most miners. By joining forces, members get paid more often, even if each payment is smaller. For the basics of how mining itself works, see how does bitcoin mining work.

How does a bitcoin mining pool work?

Solo mining is like holding one lottery ticket, with a small chance of a full block reward and long stretches of nothing. A pool finds blocks far more often because its combined hash rate is much larger, so its income is more predictable.

The pool operator coordinates the work. It gives each miner a different range of values to test so nobody repeats the same calculations, and it builds the block template that miners work on. To measure contributions, the pool sets an easier target than the real network. Each hash a miner finds that meets this easier target is called a share. Shares do not win blocks on their own, but they prove how much work a miner is doing.

How do mining pools pay miners?

Pools use different payout methods, and the main trade-off is who carries the risk of bad luck.

Pay per share (PPS) pays a fixed amount for each share, based on the expected block reward, whether or not the pool actually finds a block. The operator absorbs the ups and downs.

Full pay per share (FPPS) works like PPS but also pays out an estimate of transaction fees. Hashrate Index notes that FPPS usually has a slightly higher pool fee because the operator takes on more risk.

Pay per last N shares (PPLNS) pays only when the pool finds a block, splitting the reward among recent shares. Miners carry more of the luck, and the method rewards those who stay with one pool rather than hopping between them. PPLNS pools can have very low fees.

PPS+ is a hybrid that pays the block reward PPS style and the transaction fees PPLNS style.

What are the largest bitcoin mining pools?

Rankings shift constantly. In an estimate published on December 31, 2025, Hashrate Index put Foundry USA first with about 30.1 percent of hash rate, followed by AntPool at 18.3 percent, ViaBTC at 13.0 percent, F2Pool at 10.0 percent and SpiderPool at 8.8 percent.

Are mining pools bad for Bitcoin?

Concentration is the main worry. A researcher known as b10c found in April 2025 that six pools were mining more than 95 percent of blocks, and that the top two held over half of the hash rate. Since pool operators choose which transactions go into block templates, a few large pools have real influence. In theory, enough combined power could enable a 51 percent attack.

There are checks on this. Binance Academy points out that miners can switch pools at any time, and that a newer protocol, Stratum V2, lets individual miners build their own block templates, though adoption has been gradual.