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PPS+ Vs PPLNS

Eric from Cruxpool Team

Eric

PPS+ Vs PPLNS Explaining how it works

We often proudly advertise our PPS+ system, and I know it’s hard to explain briefly what it’s all about so I thought I could write these lines to help you better understand all the shenanigans behind the concept of “shares”

Pay-Per-Share system

When we talk about the mining process, most people imagine that the computers are solving incredibly hard equations in order to mine a block. Truth is, a big part of it looks like a gambling game at the casino. Imagine that miners are like people around a very large table, rolling dice every second in order to find the correct combination of numbers. They need to win the game (eg. Finding the block) 

If you’ve read other articles and guides over the web, you may now have a substantial understanding of how the blockchain works and that’s a very important first step (and if not, I invite you to read this).

There are multiple mathematical implications that I will not dwell on for readability purposes, but basically, in order to add a block to the chain, miners have to find a solution to a problem submitted by the blockchain. Mining pools send the jobs (i.e. the problem to solve). Miners that will accept the task and “start rolling the dice”. Determined by their hashrate, which is the number of solutions miners are able to test per second, they will try to submit a potential solution.

This solution might be a block, because it is the correct answer to the problem, or it might not be, and then it’s what we call a share. It has the format that the answer requires, but it’s not what the blockchain will accept to form a block and integrate the transactions with it.

What is exactly a share?

When we talk about the mining process, most people imagine that the computers are solving incredibly hard equations in order to mine a block. Truth is, a big part of it looks like a gambling game at the casino. Imagine that miners are like people around a very large table, rolling dice every second in order to find the correct combination of numbers. They need to win the game (eg. Finding the block) 

If you’ve read other articles and guides over the web, you may now have a substantial understanding of how the blockchain works and that’s a very important first step (and if not, I invite you to read this).

There are multiple mathematical implications that I will not dwell on for readability purposes, but basically, in order to add a block to the chain, miners have to find a solution to a problem submitted by the blockchain. Mining pools send the jobs (i.e. the problem to solve). Miners that will accept the task and “start rolling the dice”. Determined by their hashrate, which is the number of solutions miners are able to test per second, they will try to submit a potential solution.

This solution might be a block, because it is the correct answer to the problem, or it might not be, and then it’s what we call a share. It has the format that the answer requires, but it’s not what the blockchain will accept to form a block and integrate the transactions with it.

- So, you’re telling me that share are invalid solutions, and that they’re useless?

Not so fast! You may think it’s pointless for all these rigs to generate heat day and night to produce solutions that will have no value at all! It is true that, unlike blocks, it will not generate any form of coin retribution to simply submitting share. Yet their value is in the validation that every miners were part of the solving process. The fact that the pool is able to see the shares that are submitted means that we know who’s been working hard to find the block. This is one of the core ideas of the Proof-of-Work system (PoW). In a world where only valid solutions that are block would be submitted, we could not verify who’s been participating to the “general effort”.

What is the PPS+ System?

Now that you perfectly understand the notion of share, it’s time for us to take a look at the payment system that we use on Cruxpool: The PPS+.

If you don’t know what PPS stands for, it means “Pay-Per-Share” . We basically pay you for every share that you submit. Now you know that a share might not be the solution that will mine the block,  your payment may rely on the luck of finding a block. (For instance in payment systems, such as PPLNS).

If we use again the metaphor of rolling dice, imagine that all miners are playing at the same time in order to get the right number that will get us to the block. Miners that are regrouped inside a pool are playing together. Doing so, they increase the chance of finding the right solution because they have more attempts at finding the right combination.

- I just don't quite get it ...

For instance, take a pool with 10 miners and another pool with 1000 miners. Let’s say for the sake of understanding that each miner can “roll the dice” once every second.

Within 15 seconds, Pool A would have rolled the dice 10*15=150 times.

Pool B would have rolled the dice 1000*15= 15000 times.

Pool A could be lucky and find the solution before the others but Pool B has statistically more attempts, ergo more chances, of finding the right number, finding the block and get the reward.

Since the block time is, in an Ethereum environment, about 15 seconds the pool with 1000 miners will have much more opportunities to roll the dice compared to the first one.

- Does this mean in a PPLNS I will never get paid?

Well it’s more complex than that. PPLNS system is somewhat a lottery system. You and your fellow miners submit your shares to the pool, and once a block is found, you’ll earn a reward up to the percentage of shares you did submit to find it.  It is not a “bad system” per se, it’s just that it made to reward loyal miners that stay together and in the same pool to execute the work rather than people who would switch every time from a pool to another one. Downside is that when it takes time to find a block (because every pool competes against each other in this game), it may have an impact on your revenue share by this lack of luck, so to speak.

Let’s go back to the PPS+ System:  Here’s a little drawing of how it works:

A set of graphics to show PPS system in ethereum blockchain

In a PPS system, you simply get paid for every share you submit, it's that simple!

What is the PPS+ System?

If you’ve read the article so far (first congrats, you’re a tough one), you understand that relying on luck could be a bit more frustrating for miners when a block can’t be found.

We have decided that we didn’t want our miners to be impacted by any form of luck. And that’s because we consider that once they submit a share, they should be rewarded for being part of the pool. A principle we have at heart is the idea of building a real community of miners, and help them getting some form of complementary income that will not depend on whether we find a block or not

Cruxpool simply took luck out of the equation.

The upside of this system is that you get a more stable payment scheme.

If you want to know more about our mining pool, please do not hesitate to go to our main website page, or join our discord and please feel free to ask any questions you want.

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