Now I understand that the fee increase in the pool.
Pay-per-share (PPS)
In the PPS system, the operator is not a passive middleman between the participants,
coordinating the joint e ort to reduce individual variance. Rather, he actively absorbs all
of the variance each miner is facing. When a participant submits a share, he is immediately
rewarded, corresponding to the expected value of this share's contribution,
minus fees - no matter how many blocks are eventually found. The operator gets to keep all
the rewards for found blocks.
The payment per share is thus a deterministic value known in advance. This has several
advantages for miners:
Zero variance in the reward per share. There is still some variance in the number of
shares found by the miner in unit time, but this is mostly insigni cant.
No waiting time until a block is found to obtain payment.
Easy to describe the exact payment that will be received.
Easy to verify that the promised reward is given, and that there are no losses due to
dishonesty on the part of the operator or other parties.
No losses due to pool-hopping, which is ine ective against this method.
However, this is the riskiest reward system for the pool operator - to be able to o er zero
variance to participants, he must take all the variance himself. He can make a nice pro t on
short rounds - where he gains the entire block reward but only has to give payment for less
than the average number of shares - but can lose substantially on long rounds. His variance
is the same as the solo variance of mining with the capacity of the entire pool (in absolute
terms, the variance increases proportionally to the hashrate). To compensate for his risk,
the operator will charge a higher fee than with other methods, and this is the disadvantage
of PPS for miners.
If the operator doesn't correctly balance the pool's fee with his nancial reserves, the
pool has a good chance of eventually going bankrupt.
The required reserves are higher than most people anticipate. Operating such a pool is
thus best left for those who know how to manage their risks responsibly, and miners who
appreciate stability should shy away from improperly managed PPS pools which could shut
down at any minute.
Find pdf here :
https://bitcoil.co.il/pool_analysis.pdfThanks for your effort Minergate. Very professional
