The History and Evolution of Mining Groups: From the CPU Era to ASIC

Introduction

Mining pools have been fundamental in shaping the cryptocurrency mining landscape since the early days of Bitcoin. As mining hardware evolved from CPUs to GPUs, and then to ASICs, mining pools simultaneously adapted to these technological advancements. This article explores how mining machines and mining pools grew together and the evolution of the predominant mining pool models that define the current mining industry.

From CPU Mining to the Birth of Groups

In the early days of Bitcoin in 2009, mining was done individually using conventional CPUs in personal computers. The mining difficulty was low, allowing individuals to find blocks and earn Bitcoin independently. However, as more miners joined the network and the difficulty increased, individual mining became impractical for most.

The solution came in late 2010 with the formation of the first mining pools, such as Slush Pool. The pools allowed miners to combine their computational power, reducing income variability by distributing rewards proportionally to the work contributed. This innovation transformed mining from a lottery-like activity into a more predictable and stable source of income for participants.

Evolution of Hardware and Industrial Mining

By 2010, GPUs replaced CPUs due to their superior parallel processing power, leading to an increase in competitiveness and complexity of mining. Mining pools rapidly expanded, allowing more miners to join forces. FPGAs briefly improved mining efficiency before being surpassed by ASICs.

The ASIC era, which began around 2013, drastically increased the speed and energy efficiency of mining. ASIC miners made individual mining with less specialized equipment practically impossible. Mining pools expanded their infrastructure, introducing sophisticated reward distribution mechanisms to accommodate a growing and diverse membership, thus becoming essential for mining operations worldwide.

The Formation of Predominant Group Models

Mining groups have developed various reward systems over time to balance risk, fairness, and income stability:

• Proportional Model: The oldest system that pays miners proportionally based on their shares within a mining round.
• Pay-Per-Last-N-Shares (PPLNS): Rewards miners based on their most recent shares that contribute to block discovery, introduced around 2011 to reduce the constant churn between pools.
• Pay-Per-Share (PPS): A pioneering payment model by Gate, introduced and launched in August 2016. It added transaction fees to the PPS rewards, and was subsequently adopted by many other mining pools.
• Full Pay-Per-Share (FPPS): It appeared later than the PPS+, around 2018. It evolved from the PPS to include both block rewards and transaction fees, providing miners with more stable income.

These models aimed to reduce payment variation and risks, offering miners options suitable to their preferences regarding frequency and stability of rewards.

Modern Mining Groups and Their Services

Today, mining pools manage millions of miners worldwide using advanced software that coordinates mining tasks and efficiently manages proportional payments. They charge competitive fees and provide transparency and security. Leading pools like Gate offer flexible mining services and competitive reward systems, supporting miners from individuals to large-scale operations.

Conclusion

Mining pools have evolved from simple collaborations in the early days of Bitcoin CPU mining to sophisticated global operations alongside ASIC miners. The continuous development of mining hardware has stimulated innovation in the reward models of pools, improving fairness, reducing income volatility, and promoting participation in large-scale mining. Together, the evolution of mining machines and pools supports the robust and dynamic ecosystem of cryptocurrency mining today.

Notice: For informational purposes only. Past performance is not indicative of future results.