Interested in joining a crypto mining pool to earn some extra income? Here we outline what mining pools are, how to decipher which ones are best and how to join one. After this, we delve into seven examples of best quality bitcoin minings pools out there.
What is a bitcoin mining pool?
Strength in numbers, right? A crypto mining pool is a joint group of crypto miners who combine their computational resources over a network. This combined effort strengthens the probability of finding a block or successfully mining, leading to more frequent mining reward payouts.
The difficulty of mining grows every time a new block is mined. These days, with mining being so demanding, you’re unlikely to have success on your own. However, if you have a whole bunch of people smashing the wall with their sledgehammers too, you’re more likely to get through.
How to choose the right mining pool
When choosing a mining pool, you would be wise to look at these features:
Most pools require fees (a cut from your rewards), but not all of them are the same. A lower fee is good news, don’t let it be the only attribute you look at. Sometimes a low fee will reflect the power of the pool. For example, one of the most powerful pools, F2Pool has fees on the higher end of 2.5%. This doesn’t mean you shouldn't consider using it, since it has other qualities that may make the higher fee worth it.
This refers to the minimum amount you need to mine before you are paid in a 24 hour period. For example, if the minimum amount is 0.005 BTC, and today you mine 0.002BTC, you won’t get paid. But if tomorrow you mine an extra 0.003, totalling to 0.005BTC, you will receive your rewards.
Size of pool
In general, the more participants a pool has, the less time it takes to mine—pool size can equate to more or less computing time. Larger pools have a higher probability of creating blocks due to their larger computing power, while smaller ones generally take longer. A mining pool's size can also reflect its trustworthiness to some extent. For example, many active miners in a pool suggest that the pool and its management are trusted.
Another useful, but not essential feature, to keep in mind is the capacity for customer support. There’s nothing more annoying than not being able to receive adequate support when you are having problems.
Now, the next step is to actually choose a pool. That’s what you're here for, right? So let’s waste no more time. Here are the best crypto mining pools out there for you to join.
F2Pool mines around 15% of all blocks, which makes it an absolutely mammoth in the mining pool world. Part of F2Pool's large share is due to it being founded in 2013: one of the earliest for bitcoin mining. You don’t have to restrict your mining to BTC, however. You can also mine multiple different cryptocurrencies in different pools.
F2pool takes 2.5% of your mining rewards as a transaction fee with a minimum withdrawal of 0.005 BTC per day. It has an advanced support and ‘help’ section with a clean, slick-functioning website.
15.3% market share
(Stats from BTC.com)
EH/s refers to the hash rate, which indicates the speed in which the crypto mining pool operates. Higher = more powerful. Market share is the percentage share of the market the mining pool controls— their slice of the pie.
Slushpool is the oldest mining pool still functioning, and has mined a staggering 1,282,222 BTC since 2010. And, despite being an oldie, it still lets you mine from your phone (better than doom scrolling on TikTok, right?). In terms of fees and rewards, Slush takes 2% from your mining rewards as a transaction fee with a generous minimum withdrawal of 0.001BTC.
7.5% market share
Antpool is a medium sized crypto mining pool operated by Bitmain Technologies. Despite its rather clunky UX, Antpool is a reliable and profitable platform to join. One advantage Antpool has is that you can choose between PPLNS (0% fee) and PPS+ (4% fee from the block reward and 2% from mining fees). Payments are made daily when the amount exceeds 0.001 BTC. This is low compared to others, meaning you’re more likely to get consistent payouts.
15.8% market share
Also owned by Bitmain technologies, BTC.com opened their pool in 2016. They have since established themselves as one of the largest pools around.
With only 1.0% in transaction fees, BTC.com has one of the lowest. However, as is obvious with its name, bitcoin (and bitcoin cash) are the only supported crypto for mining. BTC.com provides pretty clear information on which the user is mining the most tokens, power consumption, hash rates, electricity price and returns. It also has a cool function on their site which shows you the stats and from other mining pools, as linked earlier.
7.8% market share
Created by a group of former Bitmain employees, Poolin grew to ascendency with impressive speed. It’s now one of the world’s largest mining pools. The pool charges a 2.5% mining fee.
12.6% market share
Foundry USA is an American-born pool (shock) with great authority in the mining pool ecosystem, determined to be ‘best in class’. With China’s crackdown on Bitcoin mining, and many of the aforementioned pools being China-based companies, it’s not supposed that the well-organised company has risen with such
15.1% market share
Via Bitcoin has an intuitive dashboard that reflects data on mining pool hashrate and miners. It also has a vast range of mining options, crypto mining packages, including Ethereum, Monero and DASH. However, it has 4% fees for PPS, 2% for PPLNS, which are higher than many other pools on this list.
9.95% market share
How to sort out your tax from mining gains
Determining your crypto tax from mining gains is more complex than from regular gains from disposal (when you sell profits from holdings in an exchange, for example).
For any crypto you receive as a result of mining, you'll pay Income Tax based on the fair market value of the crypto on the day you received it. However, if you hold onto this crypto, its price increases, and you sell it for a profit, you will also owe Capital Gains tax.
This is the case in most countries - but the rules on mining can differ. Check out our guides section to see how your country taxes crypto mining.
If you need help organising your crypto taxes, consider using tax software that does the hard yards for you. Koinly is a crypto tax tool that calculates your crypto taxes for you, meaning you don’t have to go through the hassle of doing it yourself.
Koinly calculates your taxes in a format that makes sense for your country’s tax office, and does all the boring tasks that would cost your hours and hours sitting at a computer.
As a quick breakdown, here’s a short summary of what Koinly does:
- Imports all your trades, including rewards.
- Converts your transactions into your country’s currency at fair market value (this in itself is a massive time saver).
- Deciphers out which are taxable events, and which are not.
- Allows you to submit a clean and accurate report to your tax office.