What value can the exchange’s mining pool business bring to retail investors?

Bitcoin mining is a system reward process for completing tasks and obtaining bookkeeping rights, which is similar to mining in real life. It consumes the computing power of each computer to process transaction information in the Bitcoin system. At the same time, the system's reward mechanism encourages more work and more pay, thus attracting more people and institutions to join this decentralized mining.

The reward for mining Bitcoin decreases as the number of miners increases. In the past, you only needed simple mining software and a computer with ordinary configuration to mine Bitcoin. As the price of Bitcoin continues to rise, more and more people join the mining queue, and the computing power of the entire network continues to increase. It is difficult for a single device to mine Bitcoin.

Mining pools break through geographical restrictions and connect the computing power of miners and mining farms scattered around the world to mine together. The mining pool is responsible for information packaging, and the mining farms connected to it are responsible for competing for the right to record accounts. Since the computing power of many miners is gathered together, the computing power of the mining pool accounts for a large proportion, and the probability of mining Bitcoin is higher. The Bitcoin rewards generated by mining in the mining pool will be distributed according to the proportion of computing power contributed by each miner. Compared with mining alone, joining a mining pool can obtain more stable income.

Exchanges have natural advantages in developing mining pool business, mainly including:

1. The profitability of the top exchanges gives them an inherent credit endorsement among digital assets and miners;

2. Relying on the capital accumulation in the early stage, through "price war" and signing the mining pool commission fee with competitive advantages in the industry with large mining farms, and thereby attract more miners to join;

3. The mining pool business can be linked with the exchange. For miners who join the exchange mining pool, they may be able to enjoy lower exchange transaction fees in the future.

The emergence of exchange mining pools has broken the mining pattern of the old mining pools monopolizing computing power, allowing miners to experience a more convenient one-stop service of mining + trading.

1. Low transaction fees

There are certain differences in the transaction fees stipulated by different mining pool service platforms. Users naturally want to earn more profits when mining, so they should try to choose a platform with low transaction fees, so that users can also earn more investment returns.

2. The platform is highly reliable

No matter what product you invest in, you must choose a platform with strong reliability. Just like some mining pool platforms are black-hearted platforms, you should choose a well-known and more reliable mining pool platform.

3. Reasonable distribution of computing power

Different mining pool platforms have different allocation models. We should choose a platform with a more reasonable computing power allocation model and better returns.

If you want to analyze the revenue of different mining pools, you must first understand the distribution model of the mining pool. At present, the main distribution models are PPS, PPLNS, PPS+, FPPS, and SOLO. Let's take a look at their related introductions.

PPS (Pay Per Share): Based on the ratio of the effective workload submitted by the mining machine to the difficulty of the entire network, the mining pool will deduct the mining fee from the total theoretical block reward of the mining pool and settle with the miners. This rate model makes the mining pool bear greater risks, but it can guarantee the miners' stable income. Even if the mining pool does not generate blocks for a whole day, miners can still get corresponding income.

PPLNS (Pay Per Last N Share): Based on the ratio of the effective workload submitted by the mining machine to the difficulty of the entire network, the mining pool will deduct the mining fee from the total actual block reward of the mining pool and settle with the miners. Under this rate model, the miners' income is closely related to the actual number of blocks generated by the mining pool.

PPS+: This is a combination of the two rate modes of PPS and PPLNS, that is, the rewards for block explosion are settled by PPS according to the theoretical number of blocks exploded by the mining pool, while the mining fees/transaction fees are settled by PPLNS according to the mining fees actually obtained from the mining pool.

FPPS: Full PPS, the theoretical block reward of the mining pool and the theoretical mining fee/transaction fee in the past period are settled according to PPS.

SOLO: In this settlement method, all the income is distributed to the miner who mined the block, and other miners do not participate in the distribution. The mining pool charges a certain fee for mining pool operation and maintenance. The SOLO model is relatively rare, and its chance of obtaining income is comparable to winning the lottery.

According to the above situation, you can find a mining pool that suits you by conducting targeted investigations.

How can exchanges with user advantages make good use of their advantages to further develop in the mining pool sector? Cloud computing power may be one of the answers.

Cloud computing power mining has begun to become an option for retail miners. Although cloud computing power products still have a lot to be improved, in the foreseeable future, cloud computing power may be another territory for mining giants to compete for.

Compared with other mining pools, exchanges naturally have more potential user groups. They also have inherent advantages in acquiring customers for new mining forces. It is more convenient to promote business in the development of self-operated mining pools or cloud computing platforms.