How mining rewards works ?

Bitcoin Questions and AnswersCategory: QuestionsHow mining rewards works ?
Belhassen asked 5 months ago

The way I understand it: no matter how much hashing power you have, every 10 min you will be either rewarded or not.
But the websites that offers hashing powers and the mining softwares as well shows your balance to be continuously increasing and not as expected to increase step by step when you find the new block. Even bitcoin mining profit calculator tools and websites calculate your profit per day.

So how does this really work ?

1 Answers
Steven Hay answered 5 months ago

Hey Belhassen,
OK, so as a miner, the more hashing power you control, the higher your chances of mining a block and receiving the BTC reward (known as a coinbase reward). You can think of it like buying Lotto tickets: the more you buy, the higher your chance of winning – but unless you buy 100% of tickets, you’re never guaranteed to win.
Websites offering hashing contracts and the like are known as cloud miners. *MANY* of them are scams, so don’t take their claims too seriously. Their numbers could just be fake and designed to lure people into a scam. See our guide to cloud mining here:

Cloud Mining – Profitable or an Evolution of a Scam?

As for pools, the calculators assume that you mine on a large pool which regularly finds blocks. Pools award coins in relation to hashpower. Mining on a tiny pool will mean you have a greater % share of hashrate and so gain a greater reward when a block is eventually found – this may never happen if the pool’s hashrate is really tiny though. Mining on a larger pool will mean you have a smaller % share of hashrate but will be rewarded more frequently, as the pool will find blocks more frequently…
It kinda all balances out, provided the pool is above a certain size. Calculators *are* just an estimate however.

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