When a pool solves a new block and claims its reward, all miners who contributed their hash power to the pool are paid based on their share of the pool’s hashrate. There are several different methods for calculating the payouts for each miner’s share of the pool, however.
Pay Per Share (PPS)
Pool managers with a PPS payment method buy hashrate from individual miners for a fixed rate regardless if the pool finds a block within the given period of time. Payouts consist of fractions of a block’s reward. Pool managers are responsible for controlling profits and losses on their own.
Whenever a block is solved, miners in a PPS pool receive a payout from the pool’s balance equivalent to their share of the pool’s total hashrate. Network fees are not included in PPS payouts.
(Miner’s Hashrate / Pool Total Hashrate / Bitcoin Total Hashrate) * Block Subsidy = PPS Payout
Full Pay Per Share (FPPS)
Unlike PPS, FPPS pools reward shares with payouts consisting of proportional amounts of each block’s reward and fees, whereas PPS only pays shares based on a block’s subsidy.
Read: How do miners make money?
Pay Per Last N Shares (PPLNS)
Under a PPLNS payout scheme, miners are compensated based on their contribution to a pool’s total hashing power over the last N difficulty epochs. Pool managers determine the number of difficult adjustments that N represents in the payout equation. This structure benefits miners who have contributed to the pool over a longer period of time, as newer pool members receive smaller initial payments. PPLNS payouts come from a block’s fees and mining subsidy.
Read: What is mining difficulty?
Pay Per Share Plus (PPS+)
This method offers a hybrid payout scheme that combines PPS and PPLNS. Miner payouts come from both the block’s mining subsidy and transaction fees. Shares of the mining subsidy are calculated based on a PPS method. Shares of the transaction fees are paid based on a PPLNS method.
Compass does not manage a mining pool, but all Compass miners can elect to join a mining pool of their choice. Learn more in the Compass FAQs.
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