Mining Pools: PPS vs FPPS vs PPLNS - What's the Difference and Which to Choose

Mining Pools: PPS vs FPPS vs PPLNS - What's the Difference and Which to Choose

A mining pool combines its participants' hashrate to find blocks regularly rather than once every few years. The main question when choosing a pool is how it splits the reward among miners.

There are several payout schemes, and your choice determines who bears the risk of bad luck and how steady your income will be.

How a mining pool works

The pool hands out simplified tasks to its participants. A solution to such a task is called a share: it is not enough for a real block, but it proves the miner has been doing honest work.

The pool uses the number of shares to estimate each participant's contribution. From there, everything comes down to the payout scheme.

What PPS is in mining

PPS (Pay Per Share) pays a fixed amount for every share. The amount is based on the expected block reward, not on whether the pool actually found a block.

The pool takes on the luck risk entirely. If there are no blocks for a long time, it still pays miners out of its own reserve, which is why PPS fees are usually higher.

Classic PPS only counts the base block reward. The pool keeps the transaction fees for itself.

What FPPS is and how it differs from PPS

FPPS (Full Pay Per Share) works like PPS but adds an average share of transaction fees to the payout. When the network is busy and fees rise, a miner on FPPS earns more.

The luck risk is still on the pool. In our view, FPPS is currently the clearest scheme for those who need predictable daily income.

What PPLNS is and how it pays

PPLNS (Pay Per Last N Shares) pays only when the pool finds a block. The reward is split among participants in proportion to their shares within the last window of N shares.

Here the miner bears the luck risk: if the pool is lucky, payouts are above average; if not, they are below. On the other hand, PPLNS fees are usually lower because the pool does not need a reserve for unlucky periods.

From what we see, PPLNS is chosen by those who mine for a long time in the same pool. Over a short stretch the variance is noticeable, but over months the pool's luck averages out.

How much mining pools charge

Fees depend on the scheme. The general rule: the more risk the pool takes on, the more it costs.

• PPLNS - the lowest fees, usually from zero to a couple of percent
• PPS and FPPS - as a rule higher, on the order of several percent
• hybrid schemes like PPS+ - somewhere in between: the base reward via PPS, transaction fees via PPLNS
• it is worth checking the payout threshold and the withdrawal fee separately

Pool payout example: FPPS vs PPLNS

The example is hypothetical. A miner with 200 TH/s earns 0.0001 BTC a day on average, including transaction fees, and we take a pool fee of 2.5% for FPPS and 1.5% for PPLNS.

Over the long run PPLNS comes out slightly ahead thanks to the lower fee. The price for that is variance: in an unlucky week the miner gets noticeably less than on FPPS.

Which mining pool to choose

There is no universal answer. We believe the choice should be based on how much you need predictable payouts.

• you need steady income to cover electricity bills - FPPS
• you mine for the long haul and can tolerate variance for a lower fee - PPLNS
• check whether transaction fees are included in the payout
• look at the pool's size: large pools have smoother luck, but excessive hashrate concentration harms the network's decentralization
• study the payout threshold and frequency, as well as the pool's reputation

When choosing a pool, it also makes sense to think in advance about where you will sell the mined coins. Exchange prices diverge at any given moment, and on volume the difference adds up.

Our tools

Miners regularly sell the bitcoin they mine, and the price on different exchanges differs at any given moment, so it helps to see all the venues in one window. Our arbitrage screener keeps dozens of venues in one window, refreshes quotes every second and shows each gap together with the volume actually behind it. The spread calculator helps you check what survives fees, network costs and slippage at your size. The bot is fully manual. It never connects to your exchange API keys.

To test the tools on a live market, ArbitrageScanner offers one day of free access to the whole ecosystem.

FAQ (Frequently Asked Questions)

1. How does PPS differ from PPLNS?

PPS pays a fixed amount for every share, and the pool bears the luck risk. PPLNS pays only when a block is found, and the luck risk falls on the miner.

2. What is FPPS in mining?

It is PPS with an average share of transaction fees added. The payout per share is fixed, and the luck risk is on the pool.

3. Which payout scheme is more profitable?

Over the long run PPLNS is usually slightly more profitable because of its lower fee. FPPS costs more but provides steady daily payouts.

4. How much do mining pools charge?

Usually from zero to several percent. PPLNS fees are lower, while PPS and FPPS fees are higher because the pool takes on the luck risk.

5. What is a share in mining?

A solution to a simplified task that the pool hands out to participants. A share is not enough for a block, but it shows how much work the miner has done.

6. What is pool luck?

The ratio of blocks actually found to blocks expected. Luck above 100% means the pool found more blocks than the math predicts.

Conclusion

PPS and FPPS pay for every share and take the luck risk off the miner, but charge more for it. PPLNS is cheaper, but payouts depend on how lucky the pool is.

If you need steady income to cover electricity bills, FPPS makes sense. If you mine for the long haul and handle variance calmly, take a look at PPLNS and check how the pool accounts for transaction fees.

IMPORTANT! We are software developers. We do not give recommendations or promises of earnings and we do not advise you to invest your money anywhere. Our software is fully manual, all your money stays under your own control. We show examples of how our clients have earned on arbitrage in the past, but we do not advise repeating those actions one to one. Your earnings depend solely on your own actions and on market factors.