Authors:
Loi Luu, National University of Singapore; Yaron Velner, The Hebrew University of Jerusalem; Jason Teutsch, TrueBit Foundation; Prateek Saxena, National University of Singapore
Abstract:
Cryptocurrencies such as Bitcoin and Ethereum are operated by a handful of mining pools. Nearly 95% of Bitcoin’s and 80% of Ethereum’s mining power resides with less than ten and six mining pools respectively. Although miners benefit from low payout variance in pooled mining, centralized mining pools require members to trust that pool operators will remunerate them fairly. Furthermore, centralized pools pose the risk of transaction censorship from pool operators, and open up possibilities for collusion between pools for perpetrating severe attacks.
In this work, we propose SMARTPOOL, a novel protocol design for a decentralized mining pool. Our protocol shows how one can leverage smart contracts, autonomous blockchain programs, to decentralize cryptocurrency mining. SMARTPOOL gives transaction selection control back to miners while yielding low-variance payouts. SMARTPOOL incurs mining fees lower than centralized mining pools and is designed to scale to a large number of miners. We implemented and deployed a robust SMARTPOOL implementation on the Ethereum and Ethereum Classic networks. To date, our deployed pools have handled a peak hashrate of 30 GHs from Ethereum miners, resulting in 105 blocks, costing miners a mere 0:6% of block rewards in transaction fees.
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BibTeX
@inproceedings {203704,
author = {Loi Luu and Yaron Velner and Jason Teutsch and Prateek Saxena},
title = {{SmartPool}: Practical Decentralized Pooled Mining},
booktitle = {26th USENIX Security Symposium (USENIX Security 17)},
year = {2017},
isbn = {978-1-931971-40-9},
address = {Vancouver, BC},
pages = {1409--1426},
url = {https://www.usenix.org/conference/usenixsecurity17/technical-sessions/presentation/luu},
publisher = {USENIX Association},
month = aug
}
Presentation Video
FAQs
SMARTPOOL gives transaction selection control back to miners while yielding low-variance payouts. SMARTPOOL incurs mining fees lower than centralized mining pools and is designed to scale to a large number of miners.
Is pool mining worth it? ›
The Bottom Line
If you're looking into crypto mining to supplement your income or earn some as an investment, it is worth joining a pool to reduce your overall costs and increase your chances. Be sure to investigate and understand their payout schemes and requirements before jumping into the pool.
Is the bitcoin mining pool legit? ›
Miners can either join a mining pool or mine solo. However, as a beginner, it is highly advisable to join a mining pool. That way, novice miners can leverage the mining pool's infrastructure, share their computational power, and mine Bitcoins faster.
What is a smart contract mining pool? ›
SmartPool enables an efficient way to mine blocks in a decentralized manner between miners. Everyone can propose their own transactions in a block, thus eliminating the censorship on transactions. SmartPool requires negligible to no fees from miners.
Are mining pools legal? ›
Regulatory Compliance: Mining pools may be subject to various regulatory requirements depending on the jurisdiction. These regulations can include financial regulations, anti-money laundering (AML) laws, know-your-customer (KYC) requirements, and data protection regulations.
Can you make money on mining pool? ›
Most individuals opt to join a mining pool, which allows them a high probability of limited profits instead of a low probability of high profits. Most people will not be able to earn a significant profit from mining in its current state.
How much does a mining pool cost? ›
Nearly all pools require fees, but some are structured to operate without them. For example, the oldest mining pool still in operation is SlushPool—they charge a pool fee of 2% of your reward and a payout fee of 0.0001 Bitcoin on payouts under 0.005 Bitcoin.
What is better, solo or pool mining? ›
Solo mining can offer higher returns over time than pool mining, but it requires patience and can take longer to find blocks. Pool mining is preferred for altcoin or bitcoin mining, so solo mining should only be pursued if large amounts of hash power are acquired.
How much can you make a month mining bitcoin? ›
Crypto Mining Salary
| Annual Salary | Monthly Pay |
|---|
| Top Earners | $68,500 | $5,708 |
| 75th Percentile | $62,000 | $5,166 |
| Average | $55,819 | $4,651 |
| 25th Percentile | $48,500 | $4,041 |
Unrealistic Promises: Be wary of mining pools promising unusually high returns or guaranteed profits. If it sounds too good to be true, it probably is. Fees and Payment Practices: Scrutinize the pool's fee structure and payment policies. High fees, hidden charges, or delayed payments can indicate a scam.
However, mining pools are not without their security risks. Potential vulnerabilities like a 51% attack (where a user or group controls more than half of the network's mining power) exist, necessitating security measures such as two-factor authentication and hash rate distribution monitoring.
Does Bitcoin mining give you real money? ›
Bitcoin mining does pay, although amounts are smaller than you might hope because you have to join large mining pools to even have a chance to earn.
Is joining a mining pool worth it? ›
Stable Income: Mining pools are great for new miners looking to mine without investing too much in expensive equipment. There is a higher chance of more blocks getting accepted and recognized, creating consistent income.
How do you make money with smart contracts? ›
The smart contract developer has two main on-chain methods for monetizing their work:
- launch a token that is required to use the protocol, have a sale, hold back a significant proportion, and then make profits by selling more as the token price rises.
- charge a commission for using the smart contract.
A mining pool is when individual crypto miners join together and pool their resources in order to improve their chances of obtaining a block reward. Rewards for solving blocks are paid out according to how much processing power someone contributed to the pool.
How does smart mining work? ›
Smart mines are essentially those whose key assets are digitized through embedded sensors that relay data to a central system via a wireless network.
What is a smart pool? ›
Smart pools utilise the latest technology available on the market to automate and control many of the processes and measurements that ensure optimal functioning of your pool. By installing a smart pool, you reduce time, costs and man-hours spent on maintenance.
What is a mining pool and how does it work? ›
In the context of cryptocurrency mining, a mining pool is the pooling of resources by miners, who share their processing power over a network, to split the reward equally, according to the amount of work they contributed to the probability of finding a block.
Is Smart mining safe? ›
Data Security. For any mining company, protecting their valuable data from any security breaches is important. So an aspect of smart mining is the capability to ensure data is safe from any data miners or hackers. Digitising a mine doesn't mean mining companies will risk their assets and data being breached.
