Certified Bitcoin Professional Practice Exam

What happens to the rewards when miners join a mining pool?

1. They keep all rewards for themselves

2. They share the rewards proportionately among all pool members

3. They distribute rewards equally regardless of contribution

4. They cannot receive rewards

The correct answer is: They share the rewards proportionately among all pool members

When miners join a mining pool, they share the rewards proportionately among all pool members based on their individual contributions to the pool's total mining power. This approach allows individual miners to receive more consistent and predictable rewards compared to solo mining, where the chances of solving a block and earning rewards are low and sporadic. In a mining pool, each member contributes computational resources to increase the group's chances of successfully mining blocks. When a block is mined, the rewards — which typically include new bitcoins and transaction fees — are distributed among all members according to the amount of computational power each miner contributed. This means that those who contribute more hash power to the pool will receive a larger share of the rewards, while those with less contribution will receive a smaller share, reflecting the principle of proportional distribution. This method not only helps miners to mitigate the risks associated with mining individually but also encourages collaboration and resource sharing, which is essential in the highly competitive environment of Bitcoin mining.