P2Pool Mining: What You Need To Know

Cryptocurrency mining has come a long way since Satoshi Nakamoto mined those very very first Bitcoins using only CPU cycles.


The harnessing of graphic card GPUs shoved mining rates to Gigahashes vanaf 2nd, and recently, the development of ASICs made Terahash rates possible. Many miners either fell out of the wedloop or were compelled to form pools – combining their hashing power ter order to mine profitably. So began the era of the mining pools, behind whose power to make or pauze petite altcoins, lay a greater threat: the 51% Attack. More on that zometeen.

The sheer hashing difficulty and cumulative network hash rate of the Bitcoin (and now many other cryptocurrencies) network makes pooled mining a necessity. Whereas much negative publicity surrounds the traditional pools, it vereiste be emphasized that reputable mining pools do exist. One such pool, Eligius, predates P2Pool and wasgoed created by Bitcoin core developer Luke-Jr, whose vested trust and community standing guides Eligius operations.

With many other traditional pools, however, this degree of responsibility cannot be assumed, and pool operators have bot known to skim payments or even abscond with miners’ funds. Attacks on traditional pools are also frequent due to the lure of fat payroll wallets accumulating there inbetween block pay-outs. Other times, miners may simply want to setup their own pool and control their own mining operation.

This article investigates a secure and miner friendly pool implementation that permits profitability while enhancing cryptocurrency networks te many integral ways.

What is P2Pool?

P2Pool is a decentralized mining pool implementation that provides mining operators with a secure, pliable and very customizable mining toneel. The P2Pool network is made up of interconnected knots – each knot indicating a mining technicus who is running the p2pool software.

Collectively, knots are connected ter a peer-to-peer network rangschikking, much like the Bitcoin network itself. There is no hierarchy of greater or lesser knots, and network state information is collective inbetween knots. Because blocks are effectively being mined on different knots across the network, the P2Pool network is said to be “decentralized“. Decentralization a Good Thing for cryptocurrency networks because it enhances security and promotes broader distribution.


Miners can choose to mine on any public P2Pool knot, or they can setup their own knot and join it to the P2Pool network. To join the network (i.e. become a knot), a miner simply runs the p2pool software on a networked host and then points their mining software at the p2pool example. There is no toverfee or registration for setting up a knot and the software is free and Open Source. Te addition to being inherently secure and customizable, at least one investigate suggests that – ter its default configuration – P2Pool provides miners with a statistical advantage overheen most traditional pooled mining and, specifically, solo mining.

Even so, P2Pool has characteristics of both solo mining and pooled mining. Spil with solo mining, the knot technicus is te charge of their own mining operation with the freedom to configure it spil they see gezond. Similar to pooled mining, block prizes and network transaction fees are collective amongst all contributors to the pool.

It should be pointed out that, when a miner mines on someone else’s public knot (spil opposed to setting up their own knot), they are sacrificing the greater benefit of network decentralization and could make themselves vulnerable to all of the disadvantages of traditional pools. This is not to say that a group of miners shouldn’t mine the same knot, but there is the matter of the greater good for the network and issues of trust involved. Miners should determine this for themselves.

Mining Work

p2pool web interface permits miners to monitor progress and statistics

A P2Pool knot provides connected miners with low difficulty work. Upon completion of each portion of work, the miner is awarded a pool share. Shares are communicated among P2Pool knots and assembled into a sharechain – just like the Bitcoin network assembles blocks into the blockchain.

Once the pool finds a block, all contributors are paid directly, according to their shareholding spil reflected te the sharechain. Payment is issued by the sharechain and without third party involvement.

Shares and Payment

The notion of ‘,shares’ informs all P2Pool mining production and payment. P2Pool enables all connected miner knots to combine their hash rates and collectively work on creating a transaction block. Each knot earns mining shares according to their percentage contribution. Once the mining pool successfully solves a block, each contributing miner is paid their share of the total block prize and associated transaction fees. P2Pool implements a PPLNS prize system and payment always goes directly to a miner’s wallet – not into a central fund or holding account. Because of this transparency and equitability, P2Pool can, therefore, offerande knot operators immunity to the theft and corruption that clouds centralized pools.


Because information about the P2Pool network, such spil share-ownership, block creation progress, and so forward, is stored te the distributed sharechain, there is no single point of vulnerability. No single knot can be disrupted te order to compromise the network state. This is a onmiddellijk benefit of the decentralized vormgeving of peer-to-peer networks.

Te the event that a knot is compromised, there is no mining gegevens to steal or demolish, since all mining shares and payout information related to that knot are preserved te the public sharechain. The knot technicus can reinstall the knot, rejoin the network and regain share and state information from the sharechain within minutes.

Representation of the Bitcoin P2Pool knot network. Larger knots have more hashing power.

Another example of how decentralization protects P2Pool is illustrated by the all too familiar DDoS attack. P2Pool is said to be DDoS tolerant:

Whilst a denial-of-service attack does not need to disable all knots ter a network to be effective, te the case of P2Pool there is salvation te the survival of at least one knot. A well-orchestrated DDoS attack can disable most (and possibly all) knots ter the peer-to-peer network, yet if only a single knot survives – and is able to maintain the sharechain – it can permit the entire pool network to be rebuilt.

This means that the P2Pool network and its most significant cargo, namely blocks destined for the blockchain, is more secure te the palms of a distributed network than it would be with a centralized network. Compromise of a central knot (or knots) halts all production and the state of the network is demolished and most likely lost. This is part reason why the Bitcoin network is based on a peer-to-peer monster.

With a centralized pool, there is the possibility that the pool’s combined hash rate exceeds 50% of the entire network’s hash rate. This screenplay makes the protocol vulnerable to blockchain manipulation by such a mining cartel, ter what has bot dubbed the “51% Attack“. Ter tegenstelling, a decentralized mining pool does not impose it’s combined hash rate directly on the protocol network, and hence cannot manipulate the blockchain ter a fundamental way.

Practically, this means that even if 100% of miners were to use P2Pool, there is no take-over risk to the Bitcoin (or any other cryptocurrency) network. Te fact, this screenplay would mitigate the risk of a 51% attack on the cryptocurrency network.

Secure, more profitable, effortless to use. The P2Pool network is live and well, and pools have bot established for almost every cryptocurrency out there. Suitable for beginning miners, seasoned 49s and mining operators, the protocol toneel is evolving every day and adoption is growing rapid.

Attempt P2Pool – Miners

Why not attempt P2Pool mining for a day and practice the toneelpodium and profitability benefits for yourself? Attempt P2Pool guide

Get P2Pool – Mining Operators

Choose the onberispelijk software version and set up your own P2Pool knot. Build P2Pool guide

Extra P2Pool Resources

  • Posted te: Altcoin Mining, Altcoin News, Bitcoin Reviews, Bitcoin Tutorials, Learn about Bitcoin, Litecoin News, News
  • Tagged ter: decentralized, mining, p2pool, zen2pool

Posted by Venzen Khaosan

Market analyst and Open source developer with a keen rente te blockchain technology, overeenstemming mechanisms and the decentralizing effect.

He has found a solution to the PKI mechanism. Email mij to discuss.

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