Paypershare

Pay-per-share (PPS) is a mining pool payout model used in cryptocurrency mining in which miners are paid a fixed amount for each accepted share they submit, rather than being paid only when the pool finds a block. A share is a partial proof-of-work that meets a lower difficulty than the network target, used by the pool to measure contributed work. In PPS, the pool operator bears the variance risk of block discovery, while miners receive steady, predictable payments based on their contributed shares.

In operation, miners connect to a pool and submit shares. For each accepted share, the pool issues a payment equal to a pre-calculated per-share rate, typically derived from the expected block reward plus fees divided by the expected number of shares needed to find a block. Payments are issued on a regular schedule, and pools may charge a fee for providing PPS services. The per-share rate is designed to reflect the probability of finding a block and the current network conditions.

Advantages include reduced income volatility for miners, simpler budgeting, and a steady cash flow, which appeals to hobbyists and smaller operations. PPS provides immediate feedback on performance and reduces the need to track luck.

Disadvantages include higher risk for the pool operator, who must cover blocks found less frequently than expected. This risk is typically offset by fees, reserve funds, or insurance, and may influence the long-term sustainability of the payout rate. Because payments are fixed per share, PPS can be less favorable to miners when network luck tends to be very favorable and pool profitability is uncertain, though many pools mitigate this with risk-management practices.

PPS is one of several payout models used by mining pools, alongside Pay-Per-Last-N-Shares (PPLNS) and FPPS, each balancing risk and reward differently.