In the world of cryptocurrency mining, hash rate is a crucial factor that determines a miner’s ability to solve complex algorithmic problems, as well as the probability of finding the correct answer and earning block rewards. In an industry dominated by mining pools, the hash rate directly reflects the daily income of a miner.
In the mining community, it is generally believed that a higher hash rate equals higher profits, but the reality is more complex. Recently, a SOLO miner with only 0.002% (around 6.7 PH/s) of the total hash rate of the Bitcoin network won the right to update block 780,112, earning the miner approximately $148,000 in rewards in blocks and mining fees, according to Decrypt, a global cryptocurrency news platform. Meanwhile, many SOLO miners using 10 TH/s mining machines have worked for months without making a profit.
This suggests that in cryptocurrency mining, having 0.002% or 0.02% of the network hash rate does not make much of a difference and luck plays a decisive role.
The good news is that as mining pools have become more important, miners with low hash rates can also join in and capture a piece of the loot. By combining the hashing power of miners and mining farms around the world, we can increase the success rate of finding the correct answer. With this approach, the generated block rewards are distributed based on the hash rate contributed by each miner. For miners, joining a mining pool can provide more stable returns compared to SOLO mining.
Miners have reported significantly variable monthly returns offered by different mining pools, even with the same hash rate. In today’s highly competitive mining pool industry, the payment methods provided for miners have become increasingly sophisticated, with the main options including PPS, FPPS, PPS+, and PPLNS. For PPLNS miners, the daily income depends on the luck value of the mining pool. To be more specific, luck value is positively correlated with mining income.
Note: The luck value, or block rate, refers to the ratio of actual block production to theoretical block production. For example, if ViaBTC’s Litecoin mining pool offers a theoretical output of 100 LTC, the actual output of the mining pool will reach 103 LTC when the luck value is 103%.
The luck value of a mining pool depends on its technical ability, and it is normal for the figure to fluctuate around 100% in the short term. However, if a mining pool consistently shows a luck value lower than the industry level, it may indicate problems with the mining pool’s node implementation or the underlying technology.
Litcoin hashrate distribution (source: BTC.com)
Having a high hash rate does not guarantee higher profits. In SOLO mining, personal luck plays a big role, but if you’re looking for mining pools, stable pools backed by a strong technical team are often good options.
Choosing a mining pool involves thorough evaluation and comprehensive standards, however the simplest method is to select the mining pool with the highest hash rate, as it indicates that the pool has gained recognition from the majority of miners. and farm owners in the market. Such a mining pool could help miners minimize their risks.
This year, we will witness another LTC halving. Litecoin block reward is expected to drop from 12.5 LTC to 6.25 LTC around August 3, which will break the supply-demand balance and lead to market fluctuations. Also, through blended mining, which has become increasingly popular, LTC miners could also earn good DOGE bonus returns. As a result, many miners have recently purchased LTC mining machines and have ventured into LTC mining.
In short, when choosing a mining pool, miners should give priority to those with high hash rates, strong credibility, and a good reputation. They should also remain vigilant and invest wisely, as mining investments come with risks.
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