Multipool mining is as it sounds; it is the ability to mine from multiple pools for multiple altcoins. Multipool offers a proprietary port, which is the first of its kind. It is a tool that switches automatically based on coin profitability. The port’s designed to increase mining profitability for individual miners.
Rewards for multipool mining are then distributed. The distribution is based on how much power a miner adds to the network. Miners receive remuneration only after one of the pool’s miners finds a block and confirms that block.
Certain currencies will take much longer than others, which could mean a matter of days, weeks or even months. This is in part because of the increase in difficulty rate to mine, which will be explained shortly.
The port has expanded its applicability and currently offers an SHA-256 Multiport which mines 5 different coins: Bitcoin, Terracoin, Freicoin, PeerCoin, Zetacoin. The port is designed to switch automatically between coins. That means that a miner can mine Bitcoin as well as several other cryptocurrencies that use the same hash power, simultaneously.
Multipool mining works because it switches between pools based on profitability. It also allows someone to contribute to a pool’s mining resources with your own computing power. However, personal computing power is not necessarily a very profitable way to mine.
However, merged mining also provides value for proof-of-work coins. This is because mining rewards are distributed proportionally amongst the miners. While it is possible to mine using CPU and GPO, these often do not have a significant amount of hashing power to be competitive. Therefore there is a lower profitability potential. This is because you will not be able to mine high difficulty coins such as Bitcoin and Litecoin.
Using the necessary hardware, the pool automatically checks your hash rate and adjusts your difficulty. Do so maximizes the efficiency of the device. However, without enough power, it is simply not as effective as possible.
Moreover, the financial benefits are variable and based on a combination of factors. Such factors include the hash power a multipool miner is contributing, as well as the shifting demand of the market.
A Little About Crypto Mining
Mining certain cryptocurrencies such as Bitcoin is really only profitable if you can participate in a pool. This is because of the increased popularity of mining. Additionally, the computational power required to mine for digital currencies, such as Bitcoin, is very expensive. As a result of the increase in mining Bitcoin’s difficulty rate has been adjusted many times over the course of its life.
However, there are many other digital currencies that need mining as well. Multipools were designed to increase profitability. Consequently, they can be very beneficial to the network as miners and hash power are necessary in order to confirm transactions.
But because there are many kinds of currencies, the rewards of mining are variable. An aspect of profitability is the difficulty level for mining an altcoin. For Bitcoin, for example, the difficulty rate is regularly adjusted. This means only 1 BTC is mined every 10 minutes. So if there is more hash power on the network the difficulty of mining the target hash increases to maintain that average rate.
A multipool miner profits as they increase the network hashing power. However, as I mentioned, the more hash power that is available will decrease block time. The majority of cryptocurrencies are designed to maintain a certain hash rate.
There is a bit of a catch to increased mining power. Because the difficulty rate must be adjusted based on how much hash power is available. So if the difficulty increases, that is because there is more hashing power available.
But while the adjustment is taking place a large amount of cryptocurrency can potentially be mined (created). This rush of digital coins can temporarily flood the market, which is not necessarily a good thing, as it decreases the currency’s scarcity. However, sometimes this works in the miner’s favor, as approving more transactions means that transaction fees may increase.
As such, Digibyte and Dogecoin have both implemented Digishield. This means that the difficulty immediately increases when multi-pool miners join the network. Each cryptocurrency has unique rules, but many have adopted measures to reduce the volatility mining, which includes block times, difficulty and network hashing power.
How Multipool Mining Works
The inspiration behind multipool mining was to make mining more profitable by switching between mining cryptocurrencies. Switching maximizes profits as participation in a network is based on need. So when more hash power needed on another network your mining port switches. So the port finds the network that needs the more power which maximizes profits for miners.
However, profitability still depends on many variables. As I mentioned, mining is highly affected by the network’s supply and demand. Necessary factors to consider are networking mining power and exchange rates.
Basically, multi-pool works based on the probability of profitability via the success rate of mining power. A multipool then calculates the hash power available for various coins and then jumps to the most profitable one.
It calculates that reward per block as well as the conversion rate to their base currency they are operating from. This is because most multipool miners will mine other currencies only to exchange the rewards into Bitcoin.
But the real beauty of participating in a multipool is merged mining. That means that you can mine for multiple coins essentially simultaneously. So if you are mining Bitcoin which has an SHA-256 hash, you will also be mining other SHA-256 coins like Bitcoin Cash. Merged mining is able to provide proof-of-work for compatible coins.
What does Multipool do: A Summary
- Multipool is a port that enables a multi-coin profit-switching mining pool
- Presently it can be used to mine multiple altcoins, including Bitcoin
- This is the first pool to offer a port that switches automatically based on coin profitability
- It is possible to mine SHA-256 coins with Multiport
- Miners can still use the port which connects to any individual pool to mine a single coin
- Rewards are currently distributed proportionally, as the pool regularly hops from one coin to another
Multipool is constantly expanding and managing the currencies that its port can mine. It is important to remain current with the movements of their processes and news. Make sure to remain up to date using their twitter outreach, @Multipool.