As a hobby I mine crypto currencies. After all when your work station has a couple of high end GPUs why not? Of course those of you in the know, obviously know I am not mining bitcion, but rather one of the hundreds of other ALT coins that are still minable with GPU, and haven't been taken over by the ASICs... yet.. Forever I have done pool mining, but recently I decided to give SOLO mining a try, and now I will likely never go back.
Most miners, especially smaller ones do what is called Pool Mining. You run your mining software, and configure it to submit shares to a pool. The pool is a centralized server that allows hundreds if not thousands of miners to all contribute. When the pool solves a block, the earnings are divided up with everyone in the pool based on how many shares each person contibuted. Most pools also take a cut to cover overhead costs. That is typically 1%-2%. The benefit of mining in a pool is for more competive coins you will get more consistent daily earnings, rather than solo mining which you might solve a block once a week or worse.
Solo mining means you run your own Node, and submit the shares to it, when you solve a block your node will announce this to the network and you will be rewarded the block rewards. For coins like Bitcoin or just about any other crypto currency. Solo mining is likely not going to get you anywhere. But for coins that are still under the radar or have a very small network, its very possible to Solo Mine and still solve blocks a few times a day.
For the past month I have been mining a specific coin on a specific pool. Its a realtively new coin with few miners on it. The ALGO ( I am not saying which one) has a 60 second block time. On average the pool was solving 14 blocks per hour. My reward was maybe about 10 percent of the shares. But the pool was having trouble with making payments, so I decided to try solo mining while the pool fixes the bugs in their software. Once I got my node running and configured my miners to mine to my node, I watched as the shares came in. One thing I noticed was my miners were submitting shares at a much faster rate than they were on the pool. but I figured it was just a difference in diffculty. But 5 minutes later I solved my first block. This surprized me, but I figured it was just luck. My calculations based on how I did in the pool was I would solve a block every 45 minutes or so. Then 15 minutes later I solved another block. Now I was starting to get excited. But I still thought maybe it was luck. So I let my miners run all night. In the morning I checked on their progress, and found in 11 hours they had mined the same amount I would normally mine in 24 hours on the pool.
When you mine on a pool your miners have to connect accross the internet to the Pool's server to get new assignments and status updates. When you solo mine your miners only have to connect accross your local network. My ISP is a 1Gbit connection, and my network is a Gbit network. The Node is running on my work station which is a 1950x Threadripper CPU ( Absolute Beast of a CPU ). The result is the time for a solution to be accected by the node is around 87ms. Thats not a PING. Thats the time for it to connect on the local network, process the data, and return the result. The other consideration is even though the pool says their fees are 1%. I am starting to wonder. I think many pools are stealing from miners. Most miners don't have enough hardware to solo mine so they blindly use the pools. But the pools could also do things like say they have 200 miners on the pool, when in fact they only have 50. On the same pool I used to mine, I noticed that when I was mining on the pool, The pool was winning about 6 blocks per hour. But when I stopped mining on the pool, their winnings dropped to maybe 1 block per hour. Yet the pool was telling me I was only represented 20% of the hash rate. If so the drop in their winnings shouldn't have been so dramatic when I left. Tells me that I very well could be more like 80% of the hash rate. But they are fixing the numbers and stealing from their miners.
If you are mining on a pool or even worse nicehash. Try Solo mining. Especially for smaller coins. I think you will get better results.