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What is Bitcoin Pooled Mining?
Bitcoin pooled mining is a way for multiple users to work together to mine bitcoins, and to share the benefits fairly.
Why do I need bitcoin pool?
Bitcoins are ordinarily only ever created in chunks of 25 at a time, with the whole 25 paid to a single person. Furthermore, the race to get the 25 BTC prize in a given block is highly competitive.
If you set out mining on your own, it may be a long time before you can make a return. Pooled mining allows you to receive smaller, more frequent, steadier payouts instead. If you have a slower computer, or a CPU miner, then pooled mining may be the only way that you will ever mine any bitcoins at all.
How does bitcoin pool work?
Our server gives users blocks of very low difficulty to solve. Each solution found is registered as one 'share'. Occasionally, a solution will happen to also meet the full-strength difficulty requirements of the Bitcoin network, resulting in a successful 25 BTC minting.
This 25 BTC is divided among all of the users that contributed to that round, weighted by the number of shares that they earned. Therefore, the reward earned by a given user is given by the following formula:
(25 BTC + block fees - 2% fee) * (shares found by user's workers) / (total shares in current round)
Shares do not carry over from one round to the next. When the pool mine a block, only users who worked on that block are rewarded, and only for work they did on that block. This is an unavoidable consequence of the way that Bitcoin mining in general works.
In fact the formula above is simplified. The real math behind the payout system is described here.
The 2% fee is used to keep this service alive.
Key features
Service lifetime & operator trust - Users have to trust pool operators, because pools aren't cheat-proof from the side of the operator. mining.bitcoin.cz was the first Bitcoin mining pool, has been operating consistently since December 2010 and has a long history of stable and accurate payouts.
Stratum protocol support - Mining protocol with very low network overhead has been designed for high-speed ASIC miners.
Score-based reward system - Pool uses a fair distribution of rewards between members, making the pool hop-resistant. This has been mathematicaly proven.
* You need to use miner software that supports those features. I recommend you poclbm miner or GUI miner
How do I get started?
1. Install Bitcoin miner on your computer
All major CPU/GPU miners support pooled mining:
Kiv's GUI miner (Windows, recommended for beginners) (instructions)
ckolivas's CGMINER (GPU/FPGA, recommended for experts) (instructions)
m0mchil's GPU miner (instructions)
2. Sign up with a bitcoin.cz account
Sign up
Verify email (may be used for troubleshooting)
Login to application
Enter your wallet address - can be also online wallet registered on MtGox or Intersango
Register your workers. You can use one worker account for all your miners, but I recommend to use separate account for every miner for easier troubleshooting.
3. Run miner
Run your own GPU/FPGA/ASIC miner with the worker credentials you gave earlier, and connect it to following URL:
http://api.bitcoin.cz:8332
(Main pool URL)
or
stratum.bitcoin.cz:3333
(If you have Stratum-compatible miner)
Is it safe?
In theory, as the Bitcoin pool operator, I could keep the 25 BTC from a block found by the pool for myself. I'm not going to do this, but I completely accept that people do not trust the pool operator. It is their freedom of choice, and Bitcoin is about freedom.
I created the Bitcoin pool service with the rising difficulty of mining in mind because I'd like to return my investment to mining hardware. There used to be days when I never found a block at all, even with the strongest GPU on the market, which made me uncomfortable. The periodic micropayments from the mining pool offer a steadier payout, which lowers the riskiness of my investment in the Bitcoin market.
Source:http://mining.bitcoin.cz/
