Full Pay-Per-Share is a payment method that sets the price of block rewards and mining rewards based on profit.
Full Pay-Per-Share (FPPS) refers to the process by which miners compete to solve complex problems on the blockchain network. FPPS is distributed based on miners' hashing power contribution after transaction fees are calculated. Sharing transaction fees increases miners' earnings. Through the FPPS payment method, payment can be received whether or not a block is provided.
There are concepts that need to be known to understand the full pay-per-share method:
- Block Reward
- Transaction Fee
- Mining Pool
- Luck
- Hash Rate
Block Reward
Block reward is the name given to cryptocurrencies distributed to miners who solve complex problems for new blocks on the blockchain network.
Transaction Fee
Transaction fees are fees paid to miners on some blockchain networks. Transaction fees are fees paid by users for the execution of transactions.
Mining Pool
A mining pool is a pool that aggregates the hash power of nodes in the network because miners do not have enough hash power to unlock a block. The higher the hash power, the easier it is to unlock the block. Once the block is unlocked, the block reward is allocated according to the miners' contribution to the transaction.
Hash Rate
The hash rate refers to the speed at which computers complete the transaction contained in the cryptocurrency code. A higher hash rate gives the miner a greater chance of finding the next block and receiving a block reward.
Luck
The element of luck is located within the mining pool. Depending on a certain hash power provided by the miners, you are eligible to win a block reward. The one with more hash power in the mining pool is lucky.
Pay-Per-Share
Pay Per Share (PPS) provides a fixed payment for each completed share. Through PPS, the miner receives a set payout rate for each completed share.
In other words, with pay-per-share, the miner gets the value he expects from the block reward. However, the block reward is only considered part of the miner's earnings. Transaction fees, on the other hand, cannot be obtained through pay-per-share. Each share is worth a certain number of mined cryptocurrencies.
Miners receive a fixed return every day. Therefore, in the PPS payout method, returns are stable. At the same time, there is no element of luck in the pay-per-share method. PPS is a common payment method for altcoins in general.
What Is Pay-Per-Last-N-Shares (PPLNS)?
Pay-Per-Last-N-Shares (PPLNS) is a way of paying miners as a percentage of their contribution to the total share. PPLNS refers to a fixed amount that does not depend on luck and is usually set at twice the difficulty. In this payment method, miners earn shares as they mine, and the more hashes they make, the more shares they earn.
Payment is made only when a block is found. The payout method is determined by the number of tickets miners claim in the pool. This payment method also rewards members who are consistently loyal to the pool by not incentivizing them to mine quickly with a small amount of shares. Therefore, pool members are incentivized to stay loyal to the pool by opting for this payment method.
Which Payment Method Is the Best?
The FPPS payment method preferred by miners carries less risk of volatility than other payment methods. However, the PPS+ method is acceptable depending on the size of the pool and is preferred by mining pools with a high ability to find consistent blocks.
FPPS is considered the riskiest payment method for pool operators and is therefore usually offered at a higher fee. PPLNS, on the other hand, carries little or no risk for pool operators and can therefore usually be offered at lower fees.
