A mining pool is a group of cryptocurrency miners that look to combine their hash power and computing potential to increase the chance that they will earn mining rewards.
Crypto miners are presented with choices, either working with others and splitting a higher probability reward among pool members, or going solo with a decreased chance for a bigger reward.
With cryptos such as Bitcoin for example, it is simply not plausible for a normal person operating with their own computer to make a profit mining.
Many newer miners opt for altcoins instead, as this is much more feasible given hashing requirements.
Of note, a mining pool can never exceed 51% of the overall hashing power of any network, as this would present other issues entirely.
Who Uses Mining Pools?
Mining pools are an ideal solution for cryptocurrency miners who may not have access to large amounts of expensive equipment.
Mining crypto takes a huge amount of computing power and electricity, with hardware and other fixed costs becoming a prohibitory factor for most.
And yet, without a huge amount of hash power, it is unlikely that a miner will be chosen by a cryptocurrency network to confirm a block of transaction data.
Therefore, it is also unlikely that the miner will earn any mining rewards. This changes if a miner joins a mining pool.
A network is more likely to choose the pool to confirm transaction data because the pool has a higher amount of hash power.
Mining rewards are distributed throughout the mining pool in accordance with the amount of hash power that each member contributes to the pool.