Solo mining is like buying a lottery ticket with your own hardware, offering huge, infrequent rewards if you find a block, while pool mining is like joining a team: you combine your processing power (hashrate) with others for more frequent, smaller payouts, sharing the rewards based on your contribution, making it more stable and suitable for paying bills. The key difference is variance: solo has high risk/high reward, while pool offers consistent income with shared profits and small fees.
Solo Mining
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Solo Mining
- How it works: You use your own equipment to try to solve the complex puzzle to validate a new block of transactions.
- Rewards: If you find the block, you get the entire block reward and transaction fees (100%).
- Pros: Full control, no pool fees, potential for massive payout.
- Cons: Extremely high variance (could take years to find a block), requires significant hardware and patience, often impractical for less dominant coins.
- How it works: You join a group (pool) that combines its collective hashrate, acting as one large miner.
- Rewards: When the pool finds a block, the reward is split among participants based on the amount of work (shares) each contributed, minus pool fees.
- Pros: Consistent, predictable income; lower financial risk; easier entry for hobbyists.
- Cons: Must pay pool fees; rewards are smaller; less control.
- Solo: For large-scale operations with immense processing power, technical expertise, and tolerance for long dry spells, or for miners on less competitive cryptocurrencies.
- Pool: Ideal for hobbyists, small setups, or anyone needing a regular income to cover costs, as it smooths out the lottery-like nature of solo mining.
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