As opposed to solo mining, group mining is when multiple people mine together.
Group mining refers to the practice of multiple people or entities pooling their computational resources to mine together. Miners do this to mine more profitably, share rewards and mitigate security risks
In group mining, everyone pools their processing power (denoted in hash rate) and shares the block rewards
whenever the mining pool
successfully mines a block. A group mining
member’s reward will be based on his/her contributed processing power relative to the rest of the miners in the group.
Normally, solving the mining puzzle before every other miner in the world is like winning a mini-lottery. Fortunately, group mining ensures that constant determinable rewards can be received by all miners.
There are various pools for different cryptocurrencies
, with various payout rates, since the pool managers also take a certain percentage of the mined cryptocurrencies for maintaining the pool.
They are also classified by their reward types (frequency and nature), by whether they keep the transaction fees and distribute only block rewards, or if they allow merged mining where two cryptocurrencies with similar hash types can be mined simultaneously for greater profit.