FPPS payout system for mining

In 2023, pools use at least 21 schemes to reward members. Many of them are unpopular because they are inconvenient or bring low profits to miners. Among the most popular schemes are PPS, PPLNS and FPPS. They are fair and profitable for everyone. That said, the third one is fairer than the others. But few people understand what FPPS is in mining. And in fact, this system is used by most pools.

FPPS reward method in mining

The abbreviation stands for Full Pay Per Share. In Russian, this phrase is translated as “full pay per share”. The term Shares, on the other hand, refers to fragments of ongoing work to find a valid or valid hash – the identifier of the next block in the cryptocurrency network.

Pools – platforms for joint mining – divide the tasks of calculating functions and transfer only their parts to the miners of digital assets. This speeds up the execution of the shared work.

To participate in cryptocurrency mining, you need to purchase expensive and powerful equipment. However, there is no guarantee that it will pay off. Market participants more often choose pools. They allow you to combine the computing resources of the technique and make mining more profitable.

The system involves payments for valid balls sent by cryptominers. If the user correctly solves part of the task, he will receive an award. The size of the rewards depends on the statistics of the pools. Using the Bitcoin blockchain as an example, it looks like this:

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1. Participants of a mining pool have calculated a new link in the virtual chain for 1,000 solutions.
2. The platform divides the total reward by 1000. In 2023, the premium for finding a Bitcoin block is 6.25 BTC. So the price of 1 orb will be 6.25 / 1000 = 0.00625 BTC.
3. The platform pays 0.00625 BTC each to users who provided valid solutions.

The PPS scheme works in the same way. But the FPPS system also involves paying transaction fees to miners, which are paid by users of the Bitcoin chain for making transfers. The commissions are shared between cryptocurrency miners on a balloon basis. Therefore, the full name of the scheme and has the prefix Full.

In which pools FPPS is used

In 2023, dozens of large popular platforms support this reward algorithm. The top 3 mining pools are listed in the table below.

Platform	Commissions	Reward payment terms	Brief description
Antpool	4%	Daily	The service was created in 2014 by the Chinese technology company Bitmain Technologies. There is no information in the public domain about income withdrawal thresholds and methods of cashing out crypto assets.
Binance	2,5%		The platform was established in 2020. It operates in the ecosystem of Binance cryptocurrency products. There are no cash-out limits. The mined cryptocurrencies are deposited into an internal trading account.
EMCD	1,5%		The platform does not set a minimum threshold for profit withdrawal. The exceptions are Ethereum and Ethereum Classic cryptocurrencies. The platform allows withdrawing profits to Russian bank cards.

Alternative payment systems

In 2023, there are more than 20 known schemes for issuing rewards to cryptocurrency miners for work. In addition to the FPPS payout system for mining, also popular are:

• PPS. The abbreviation stands for Pay Per Share (in Russian – payment for the balloon). The scheme involves issuing bonuses to users for all valid solutions. Payments are made even if the miners were not able to mine the current block. Average fees of pools with PPS – from 5 to 7% and transaction fees of blockchains. This is due to the need to provide backup funds. Insurance is used if cryptominers are unable to find new blocks for a long time.
• PPLNS. The abbreviation has the following deciphering: Pay Per Last N Shares (in Russian – payment for the last N shares). The system takes into account the results of the work of miners and the calculation time of the links of digital chains. If users quickly find several blocks in a row, their rewards are reduced. When members of mining pools fail to compute the sought hash for a long time, the rewards increase. PPLNS platforms do not need reserves. Therefore, the platforms charge small fees – 1.5% on average.

Frequently asked questions

💸 Which is the best way to reward in pools?

Each algorithm has advantages. But FPPS is one of the most honest methods.

✅ What is the complexity of a balloon?

It is a parameter that reflects the number of operations needed to solve 1 part of a general problem.

👀 What is the difference between hash and shar?

The first parameter is the desired cryptographic function. The complexity of its calculation should be not lower than that set by the chosen blockchain. The second parameter is the fraction of work to find the sought hash. The complexity of the parts of the current tasks is set by the mining pools.

❓ What is SOLO?

It is a method of paying rewards in mining pools. It involves giving rewards only to those who find blocks of digital chains, even if other miners are involved in calculating the hash functions sought.

✌ What are the main criteria for choosing a pool?

When searching for a mining platform, it is important to consider 3 factors: the amount of commissions, support for the reward system of interest, and the reputation of the site.

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Author: Saifedean Ammous, an expert in cryptocurrency economics.