Mining Pool Payouts: PPS vs. PPLNS
April 8, 2021
Cultivating fresh Salad Balance is easy: once we’ve scoped out your hardware, we connect your rig to whichever mining pool will churn out maximum greenbacks. When it comes to earning the most from your idle PC, Salad handles the hard parts.
Chefs often ask us about the subtle differences in earning rates between Ethermine and NiceHash, two of the pools we use to Chop. A thorough answer requires a dive into acronym-heavy concepts—so put your flippers on!
Crypto Concept Review
To make things easy, we’ll hit some short definitions up top. If crypto makes your eyes glaze more than lousy matchmaking, get good with our guide.
The process where several connected computers compete to solve complex algorithms on a blockchain network. Each of these miners proposes solutions to cryptographic puzzles in hopes of claiming some reward in the form of cryptocurrency.
Proof of Work (PoW)
A consensus model wherein miners' solutions must be confirmed valid by the rest of the network. Any answer that is deemed valid should result in the creation of a new “block,” the smallest unit of a blockchain ledger.
As interest in cryptocurrencies has grown, mining firms set up shop and muscled out the individual miners (stomping out a serious carbon footprint in the process). Unless you’ve got a supercomputer handy, it’s no longer profitable to mine most PoW currencies at home.
Mining pools are groups of miners who use their combined might to work on blockchain networks. By sharing computational resources, they increase the odds of finding the next block—and of divvying up a healthy profit. How rewards get doled out depends on the pool’s underlying scheme.
Partial PoW solutions that advance the whole group closer to cracking the code for a new block. These valid segments constitute the “proof” behind everyone’s efforts.
Hard problems are the lifeblood of PoW currencies, and they’re designed to become more complex over time. The system ramps this “difficulty” to Legendary with every few thousand blocks added.
The number of possible solutions attempted per some unit of time. The more machines on the network and the better their hardware, the greater the hashrate. As the pool's hashrate increases, so does the difficulty.
In the context of mining pools, luck gauges the accuracy between a pool’s expected output and actual performance. To find luck for a single block, simply divide the number of shares you’d reasonably expect to have contributed (based on difficulty and hardware) by the shares it really took to find that block.
Most times you see luck, it’s represented as a percentage. If the pool produces a block with exactly as many shares as anticipated, the pool is considered 100% lucky. Likewise, submitting half as many shares before finding a block makes you 200% lucky. Elite pools can have better odds than a rocket-hog on Hang ’Em High.
Share the Wealth
Anyone who joins a mining pool must adhere to its terms, especially where it concerns fair distribution of the booty. There are several standard reward systems to pay miners for work, and each has its own benefits and trade-offs.
Because PPS (“pay per share”) and PPLNS (“pay per last n shares”) systems handle payouts differently, Chefs may notice inconsistent Salad Balance earnings when switching between Ethermine and NiceHash pools. Before moving on, it may help to understand the simplest pay scheme.
Proportional sharing (PROP) systems pay miners based on the work they do during a “round”— the time between discovering one block and the next. As the pool works, each miner gets the chance to contribute shares.
When a new block is found, the round ends and rewards are handed out proportionally. Supposing you kicked in 75% of the shares, you’re looking at 75% of the rewards.
More Money, More Problems
Like everything that sounds good on paper, there are problems in practice. Because miners stand the best chance of making money at the start of a round, PROP systems often fall prey to “pool hoppers.” These miners jump into pools when shares are worth the most, and scram as soon as the pool completes another block—leaving everyone else to get the job done for less.
Even when things are working fairly, PROP still has its earnings woes. Since rewards are tied to the block discovery, unlucky pools can't depend on regular income over short sprints, and some miners won't even get a chance to contribute before shares reset at the start of the next round.
NiceHash uses a straightforward system called “pay per share” (PPS) that does away with rounds altogether. PPS pools pay miners for valid shares as soon as they’ve been contributed. This means that miners receive pay whether the pool finds a block or not!
The worth of each share is based on the probability of success, as determined by the number of contributing miners and the current network difficulty.
The cons to this setup? If the pool is unlucky, the group may actually lose money just by commissioning shares. Mining operators take on that risk in exchange for participation fees, which can account for lower earnings over time than other payment schemes.
Ethermine rigs are paid based on a “pay per last n shares” (PPLNS) scheme. This protocol solves some of the problems with proportional systems by redefining rounds.
In PPLNS pools, rounds start when a block is found. The system then goes backward from that point, selecting valid shares until it’s counted up to some predetermined number (the fancy, mathematical n). Those shares are then doled out proportionally. The selection number—the “window”—varies based on network difficulty.
Since PPLNS miners get paid only when a block is found, submitted shares are still valid for some time after a miner disconnects. That’s why some Chefs may even earn Balance after they’ve stopped Chopping. We might just be catching word that your work’s paid off—and the Kitchen strives to serve it up hot.
Which Way Is Best?
We hope that clears up any questions about earning rates when Salad’s running on Ethermine and NiceHash. With so many aspects to consider, it’s natural to ask what is best. But there’s no easy comparison between the standard payment schemes.
PPLNS pools might yield greater pay over the long run, but they’re more prone to short-term variations in network difficulty. Conversely, PPS pools might promise steady returns at the outset, but you may get more bang for your buck over years by looking elsewhere.
You know what they say: unlucky in love, lucky at cryptomining.
Chopping Pro Tips
Salad dynamically detects the capabilities of your hardware and talks to the pools that get you the most when you Chop. Every 15 minutes, we reconcile and batch all your pool data to send you everything you’ve earned (after paying out any fees to the pool operators).
No matter which pool you’re on, just remember: the longer you Chop, the greater the spoils. You’ll get fresh cabbage just by letting Salad do its thing—and earn even more when you’re fully AFK.