📝 Hi, I am 𝟏𝟎, this is a popular science series on the #History of Blockchain, and this episode's content: Bitcoin mining farms and pools.
A mining farm is simply a place specifically designed to house mining equipment, filled with various hardware devices. In contrast, a mining pool resembles a 'computing power alliance,' where miners from different locations aggregate their computing power together to enhance their chances of obtaining Bitcoin rewards through collaboration.
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1. What is a mining farm?
Bitcoin mining farms are a core infrastructure of the Bitcoin network, providing strong computing power support to the network through high-performance computing equipment. Miners concentrate their individual computing power in the farm to collectively participate in mining and earn Bitcoin rewards. This unified management and profit distribution model not only ensures the security, transparency, and immutability of the Bitcoin network but also provides miners with a stable source of income. As an important pillar of the cryptocurrency ecosystem, mining farms safeguard the security and integrity of the blockchain.
2. The working principle of a mining farm
1. Hardware procurement: Mining farm operators purchase a large number of Bitcoin mining machines, which are equipped with custom ASIC (Application-Specific Integrated Circuit) chips designed for efficient Bitcoin mining.
2. Maintenance and cooling: To ensure the stability and lifespan of the mining equipment, mining machines need regular maintenance. Additionally, since mining equipment generates a lot of heat during operation, farms are equipped with professional cooling systems to prevent equipment from overheating and getting damaged.
3. Power supply: To operate these mining machines, farms need a stable and substantial power supply. Therefore, they are usually built near power stations to reduce electricity transmission costs. Electricity costs are a key factor affecting the profitability of mining farms.
4. Joining a mining pool: Many Bitcoin mining farms choose to join mining pools. This is a way for multiple miners to mine together and share rewards. By doing so, individual miners can achieve more stable earnings rather than experiencing the volatility of solo mining.
3. What is a mining pool?
A mining pool is a node that integrates and allocates computing power resources, improving the success rate of obtaining block rewards by aggregating scattered computing power in the blockchain network. As the total network computing power continues to grow, it becomes difficult for a single device to obtain Bitcoin rewards alone. Mining pools provide miners with limited resources a higher chance of success. Miners who join a pool will receive rewards distributed according to their contribution, while the pool charges a certain service fee.
4. What is the difference between a mining farm and a mining pool?
Bitcoin mining is similar to mining for coal or gold, as it requires mining machines to extract, but the operational methods differ. A Bitcoin mining farm concentrates a large number of mining machines in a facility, continuously performing mathematical calculations to mine Bitcoin. Mining consumes a significant amount of electricity; for example, a medium-sized farm with 5,000 mining machines can consume up to 60 million kilowatt-hours annually, equivalent to the annual electricity usage of a town with a population of 100,000. Therefore, mining farms are usually located near power stations or in areas with low electricity costs.
A mining pool is a collection of miners' computing power, an open automatic mining platform where miners can connect their machines to the pool to mine together and share profits. As more miners join, the total mining power increases, making individual miners' outputs unstable. Therefore, miners unite to compete through the pool for more stable profits. The pool itself does not perform mining calculations but instead distributes computational tasks to connected mining machines.
Currently, there are three main forms of profit distribution in mining pools: PPLNS (Pay Per Last N Shares), PPS (Pay Per Share), and PROP (Proportional). In the Bitcoin mining power space, pools like MicroBT, http://BTC.TOP, http://BTC.COM, and AntPool are leading.
5. Conclusion
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