If you’re thinking of buying…
If you’re thinking of buying a Bitaxe, here is some information about pools vs solo mining.
Firstly, although the terms are clear “pool mining”, “solo mining” there is nuance is these definitions, so I want to explain these terms fully.
Solo mining pools exist, such as:
It is called a pool, because you are using their credentials to mine, but you keep all the rewards if you win a block. Despite the name, this is not a pool.
You then have a pool such as OCEAN
who are a pool, you use their credentials to mine, and you earn a share of their income relative to your contribution in hash power.
There has been some publicity about a solo miner winning a pool recently, there were about 12 blocks won in 2023 by solo miners. However a winning solo miner is likely to be a server farm with hundreds or even thousands of S19’s or S21’s sharing the same payout wallet address. The image of a home miner with a Bitaxe winning a block is extremely unlikely.
A solo miner is defined as a group of miners that share a payout wallet address, so for example you could have 10 Bitaxe’s at home all configured with the same BTC wallet address, this is considered a single solo miner. And so it is with mid tier mining farms, often privately owned, who have a number of machines set to the same payout address. Most of the time, they share earnings for a more reliable income, but the owner may decide to gamble on winning a block and so choose to solo (lottery) mine.
So far, my Bitaxe, which has been running for 4 days and is part of the Ocean pool. It is earning about 50 Sats a day. If I were to wait for an on-chain payout, it would take around 60 years to receive one. I can, however, setup a BOLT12 lightning payout address and earn this tiny income through Lightning.
So here’s my recommendation.
Currently, there are two pools that control more than 50% of mining, Foundry USA and AntPool. This is a dangerous position and in fact Bitmain, who provide around 90% of all mining hardware actually invest and have stakes in these and several other pools. This is centralising mining and could potentially allow a 51% attack, which could compromise Bitcoin.
Jack Dorsey is currently developing competing mining hardware chipset, through his company Block and Ocean are attempting to decentralise the pools by building a truly independent option for miners to join.
If you buy a Bitaxe, the best way you can help alleviate the dominance of Bitmain is to join a true pool like Ocean to slowly move control away from the dominant pools.
Bear in mind that many of the other smaller pools are still controlled by Bitmain.
Like in all things in Bitcoin, I don’t ask you to trust me. If you want to verify, here are the references I used in making my conclusions:
