http://www.lpshowboat0099.com/Blog/pool-mining-pplns-explained/PPLNS stands for “Pay per last “N” Shares,” where “N” is either a dynamic or static number depending on the pool. PPLNS is mainly used as a means with which to discourage pool-hopping (i.e. switching from one lucky pool to another when the time per round goes below a certain threshold in order to maximize potential profits). PPLNS is a very popular reward system used by bitcoin, litecoin, feathercoin, and most other cryptocurrency pools.
PPLNS is a system where each time a block is found, payouts are given for a set number of shares “N,” regardless of whether or not the round lasted that many shares. This means that short rounds will count the shares from a previous round (or rounds), which means that a single share is paid out multiple times. This also means that long rounds can end up having the shares at the start of the round not be counted towards the reward. In theory, this prevents pool-hopping, as anyone doing such would leave if a round is taking too long (and thus the shares at the start of the long round for that person will not be counted). What does this mean when starting out on a pool that uses PPLNS? This means that on some pools, your initial payouts will be tiny, as they are only being counted once or twice. As you mine through more rounds, the payouts will steadily increase to a “normal” level of what is expected for the current crypto difficulty. This process takes longer on pools with large values of N.
On a pool I was mining for in the past, WeMineFTC, it took ten hours of mining before reaching expected payout levels because the pool had an unusually high value of N (twice the mining difficulty, when at the time N was usually 1/2 the difficulty). So, if you go to a PPLNS server and get very poor payouts on blocks when first starting to mine, please realize that it’s simply the nature of the PPLNS payout mechanism. It very much rewards long-term pool loyalty.
For a much more detailed and math-intensive discussion of PPLNS, as well as a discussion of weaknesses of using “set” values of N, refer to this post on the bitcointalk forum.
