A mining pool is a group of individual miners who combine their computing power to solve complicated cryptographic puzzles in order to produce new blocks on a blockchain.
1. Miners join a mining pool and share their computing power.
2. The collective computing power of the pool is used to solve complex cryptographic puzzles.
3. Once a puzzle is solved, the miner who submitted it receives a reward.
4. This reward consists of both the transaction fees associated with the block and an additional reward provided by the pool.
5. The additional reward is proportional to the contribution of each miner in the pool.
6. The rewards are divided among miners based on the proportion of their contribution.
7. The rewards are usually paid out in cryptocurrency.