A mining pool includes miners and they are the ones who combine their resources over a network to increase the probability of earning cryptocurrency and mining blocks.

The mining pools work in three different ways.

• Pooling of Resources: The miners solve complex mathematical problems with their computational power.
• Restrict Reward Distribution: Once a block is mined, the reward among pool members is distributed.
• Variance Reduction: Pool mining helps in minimizing earnings compared to solo mining.

3. How many different types of mining pools are there?

• Score-Based: The method discourages pool hopping by giving a score to each share. The recent shares usually have higher scores.
• Hybrid Mining Pools: The pools combine various reward distribution methods to give miners more flexibility and decrease payout variance.
• Pay-Per-Share (PPS): Miners receive a guaranteed payout for each share of computational power. It does not matter whether the pool can successfully mine a block or not.
• Pay-Per-Last-N-Share (PPLNS): The pool calculates payouts on the basis of last N shares, instead of shares from the last round. It discourages pool hopping and has similarities with the Proportional method.
• Proportional (PROP): The proportional mining pools reward miners based on the number of shares they submit during a round.
• Peer-to-Peer (P2P) Mining Pools: In these mining pools, the miners work together to create blocks. The pools are all decentralized.

Yes, users can create a crypto mining pool but it needs a fair amount of energy resources and substantial technical expertise.

Yes. It can be profitable even for those who have less energy resources and limited capital hardware. However, profitability depends on factors such as electricity costs, mining difficulty, cryptocurrency, and hardware.

The best mining pools often vary depending on chosen personal mining goals and chosen cryptocurrency.