Mystery of Ethereum mining pools and their confirmations: Depending on the reason behind the larger payments
When it comes to cryptocurrency, especially Bitcoin, Ethereum and others, mining groups have become an essential component in network insurance. However, an often overlooking aspect of these groups is why it requires such a significant number of confirmations for a block resolved before paying miners. In this article, we will deepen the reasons behind the larger payments offered by some mining groups compared to others.
Rule of 120 Confirmations
According to various sources, including online forums and community discussions, the Ethereum network has a minimum block confirmation requirement of 120. This means that, even after the block resolution, the transaction should be checked with at least 120 knots in the network before it can be be taken into account legitimately. Although this may seem like an arbitrary number, there are several factors that contribute to its significance.
Network security and trust
The rule of 120 confirmations is largely due to the importance of assurance that transactions are safe and reliable in the Ethereum network. The consensus algorithm used by Ethereum, called the evidence of work (POW), is based on a combination of calculation powers and security measures to prevent malicious actors from manipulating transactions. By requesting the miners to solve the blocks before they can be checked, the system ensures that only the legitimate transactions are registered in the blockchain.
Confirmation of transactions and taxes
Another factor that contributes to the rule of 120 confirmations is the confirmation of the transaction. When the miners solve a block, it contains several transactions, including those that require payment (ie the “financing” of the pool). The number of confirmations required ensures that each transaction has been checked by at least half of the total network nodes before being considered complete.
Why lower confirmations mean greater payments
Regarding why some mining basins offer payments to 100 confirmations or even less, it is essential to understand that these offers are often based on different business models. Here are some reasons:
* The size and distribution of the network : Larger networks with multiple knots can process transactions faster than the smallest. To compensate for this slower processing rate, lower confirmation rates can be accepted.
* Volume and frequency of transactions
: If the network is facing high transaction volume or frequent activity, the miners may not have enough time to check each transaction before resolving the block. Lower confirmations could help managing the demand.
* The efficiency and optimization of the group : Some mining groups aim to optimize their operations by minimizing the stop time and maximizing the use of resources. Lower confirmations can help them achieve this goal.
In conclusion, the confirmation rule 120 is a complex aspect of the Ethereum network, influenced by factors such as security, confidence, confirmation of transactions and business models. While some miners can accept smaller confirmations for payments, it is essential to understand these shades to navigate effectively on the landscape of the mining pool.