PPS, FPPS, PPLNS: Choosing the Right Pool Payout Method

You’ve picked a pool, pointed your miner at it, and shares are flowing. But here’s a question that can quietly cost you hundreds of dollars a month: how does the pool actually pay you?

Not all payout methods are created equal. Some give you a steady paycheck regardless of luck. Others tie your earnings directly to whether the pool finds blocks. Choosing the wrong method for your situation is like picking the wrong salary structure at a job — the hourly rate might look the same, but the paycheck tells a different story.

The Three Big Methods

The vast majority of mining pools use one of three payout systems: PPS, FPPS, or PPLNS. Let’s break each one down.

PPS: Pay Per Share

PPS is the simplest model to understand. Every valid share you submit has a fixed value, and the pool pays you for each one — immediately and unconditionally.

It doesn’t matter whether the pool actually finds a block that day, that week, or ever. You get paid for every share. The pool absorbs all the variance risk.

How the math works

The value of each share is calculated from the current block reward and network difficulty:

Share value = Block reward / Network difficulty

For example, if the block reward is 3.125 BTC and the network difficulty is 100 trillion, each share at difficulty 1 is worth roughly 0.00000000003125 BTC. Your miner submits millions of shares per day, so it adds up.

Who benefits

• You get predictable income. Every day looks roughly the same.
• The pool takes the risk. If the pool has bad luck and finds fewer blocks than expected, they still pay you the same amount. The pool operator covers the difference out of pocket (or from reserves).

The catch

PPS pools typically charge higher fees (2-4%) to compensate for the risk they carry. And importantly, standard PPS only pays you for the block subsidy — it does not include transaction fees from the block. This is a significant omission, especially as transaction fees become a larger portion of miner revenue.

Caution

With standard PPS, you’re leaving transaction fee revenue on the table. During periods of high network activity (like ordinals or rune mints), transaction fees can exceed the block subsidy. PPS miners miss out on those spikes entirely.

FPPS: Full Pay Per Share

FPPS works exactly like PPS, with one crucial addition: it includes transaction fees.

The pool estimates the average transaction fee per block over a recent window and adds that to the per-share payment. So instead of just getting paid based on the 3.125 BTC subsidy, you also get your proportional share of the ~0.5-2+ BTC in transaction fees that blocks typically contain.

Why it matters

In early Bitcoin, transaction fees were negligible. Today they represent 10-40% of total block revenue, sometimes more during fee spikes. FPPS captures that.

FPPS share value = (Block subsidy + Average tx fees) / Network difficulty

Who benefits

• Miners who want maximum predictability with full revenue capture
• Miners who don’t want to gamble on pool luck

The catch

FPPS fees are typically the highest of any method (2-4%), because the pool is absorbing both block-finding variance AND transaction fee variance. But even after fees, FPPS usually pays more than standard PPS.

Tip

FPPS is the most popular method among large mining operations. If you want to set it and forget it with the most complete revenue, FPPS is usually the way to go.

PPLNS: Pay Per Last N Shares

PPLNS is fundamentally different from PPS/FPPS. Here, you only get paid when the pool actually finds a block. Your payment is based on how many shares you contributed during the scoring window leading up to that block.

The “N” in PPLNS refers to the window size — the last N shares that count. Only shares within this window earn a payout when a block is found.

How it works

1. The pool tracks a rolling window of the last N shares (or last N units of work).
2. When the pool finds a block, it looks at who contributed shares within that window.
3. The block reward (subsidy + transaction fees) is split proportionally among those contributors.
4. If the pool doesn’t find a block, nobody gets paid — regardless of how many shares you submitted.

The luck factor

This is where things get interesting. PPLNS is directly tied to pool luck:

• If the pool is “lucky” and finds blocks faster than expected, PPLNS miners earn more than PPS/FPPS miners would.
• If the pool has bad luck, PPLNS miners earn less — potentially much less for short periods.

Over long periods (months), the math averages out to roughly the expected value. But short-term variance can be significant.

Who benefits

• Miners who are in it for the long haul and can tolerate variance
• Miners who want lower fees (PPLNS pools typically charge 1-2%)
• Miners who don’t want to “subsidize” pool-hoppers (more on this below)

The pool-hopping problem

PPLNS was actually designed to solve a specific problem: pool hopping. In older payout methods like proportional (PROP), miners could game the system by joining a pool right before it found a block and leaving immediately after. PPLNS prevents this because only consistent miners who’ve been contributing shares to the window get paid.

Note

If you’re switching between pools frequently or have significant downtime, PPLNS will penalize you. Your shares need to be “warm” in the window when a block hits. Every time you disconnect, your share count in the window drops.

Side-by-Side Comparison

Feature	PPS	FPPS	PPLNS
Pays for block subsidy	Yes	Yes	Yes
Pays for tx fees	No	Yes	Yes
Payment timing	Every share	Every share	Only when block found
Variance for miner	None	None	High (short-term)
Variance for pool	High	Highest	None
Typical pool fee	2-4%	2-4%	1-2%
Best for	Predictability	Max revenue + predictability	Long-term, low fees
Affected by pool luck	No	No	Yes
Risk of earning zero (short-term)	No	No	Yes

Real Numbers: A Worked Example

Let’s say you have a miner doing 200 TH/s, the network difficulty is 100T, and the pool has 5% of the network hashrate. The block reward is 3.125 BTC and average transaction fees are 0.5 BTC per block.

Expected daily blocks by pool: ~7.2 blocks/day

Your share of the pool: 200 TH/s out of the pool’s total (let’s say your pool has 30 EH/s total), so you’re about 0.000667% of the pool.

Daily earnings comparison:

• PPS (3% fee): Based on block subsidy only = ~0.000435 BTC/day after fee
• FPPS (3% fee): Based on subsidy + tx fees = ~0.000505 BTC/day after fee
• PPLNS (1% fee): Based on subsidy + tx fees = ~0.000515 BTC/day after fee (on average, but with variance)

Over a month, the difference between PPS and FPPS could be 15-20% of your revenue. That’s real money.

Less Common Methods

PROP (Proportional)

The simplest possible method: when the pool finds a block, split it among everyone who contributed since the last block, proportional to shares. Vulnerable to pool hopping and rarely used by major pools today.

SOLO Pools

You mine through the pool’s infrastructure, but when your share happens to be the one that finds a block, you get the entire reward minus a small fee. Everyone else gets nothing. This is essentially solo mining with the convenience of pool software. Extremely high variance — only makes sense for very large operations or gamblers.

SCORE

A time-weighted variant where recent shares count for more than older ones. Designed to discourage pool hopping. Not widely used today.

Which Should You Choose?

Choose FPPS if:

• You want maximum predictability with full revenue
• You’re running a business and need consistent cash flow projections
• You don’t mind paying slightly higher fees for stability

Choose PPLNS if:

• You’re mining 24/7 with no planned downtime
• You want the lowest possible fees
• You’re comfortable with short-term variance
• You plan to stick with one pool long-term

Choose PPS if:

• FPPS isn’t available on your preferred pool
• You want predictability but don’t mind missing transaction fees

Avoid standard PPS if:

• Transaction fees are a significant portion of block revenue (which they increasingly are)

Tip

The single biggest mistake new miners make is choosing a pool based on hashrate alone and ignoring the payout method. A pool with 2% PPLNS fees will, over time, pay you more than a pool with 4% PPS fees — but only if you stay connected consistently. Know your payout method.

The Bottom Line

Payout methods aren’t just accounting details — they directly affect your revenue. FPPS gives you the most predictable, complete income. PPLNS gives you the lowest fees and potentially higher returns, but with variance. Standard PPS is increasingly outdated because it ignores transaction fees.

Check what method your pool uses, understand what it means for your bottom line, and make sure it matches how you mine. A miner who switches pools every week should not be on PPLNS. A miner who runs 24/7 for months might be leaving money on the table by paying FPPS premiums.