How does PPLNS work?
The pool keeps a sliding window of its most recent N shares. When it finds a block, the reward in that block, minus the pool fee, is split across the shares in the window. Your cut is simply your shares in the window divided by N.
Shares that slide out of the window before a block arrives earn nothing that time. Over many blocks it evens out, and on average each share is paid about what it would be under PPS. Pools often set N so the window spans more than one expected block, which smooths things a little.
A worked example
Say 5% of the shares in the window are yours and the pool charges an example fee of 1%. An average block today is worth about 3.145 BTC (live estimate), so when the pool finds one you get 5% of 99% of it: about 0.15567750BTC.
Because the block’s real fees are split, a block packed with high-fee transactions pays more than average. Under FPPS you’d get the average either way.
Why use a window at all?
Older schemes paid by round, from one block to the next. Miners learned to hop to pools early in a round, when their shares were worth most, and leave later. With a window, a share is worth the same on average whenever it’s sent, so hopping gains nothing. It also means a new miner starts with no shares in the window, and payouts ramp up over the first stretch.
Who carries the variance?
Solo
All the luck is yours
PPLNS
You ride the pool’s luck
PPS+
Subsidy fixed, fees follow luck
PPS / FPPS
The pool carries it
Sources
- Comparison of mining pools: reward types explained · Bitcoin Wiki
- Pooled mining · Bitcoin Wiki
- Mining guide: solo and pool mining · Bitcoin developer documentation
Live figures on this page come from the CloudMineCrypto API and public chain data, refreshed regularly, and are labelled where they appear. Educational only, not financial advice.