Pay Per Share (PPS) is a mining pool reward method. A Mining Pool coordinates miners searching for blocks: groups of transactions added to Bitcoin’s public history. The pool credits a miner for accepted proofs of work, called shares, without waiting for a block of its own. The miner depends less on the pool’s immediate luck, but still depends on the operator making payment.
Jan runs an ASIC, a device designed for mining calculations, and receives regular electricity bills. With Solo Mining, he could wait a long time for a single block without earning anything. He therefore joins a Mining Pool, a service coordinating miners, that offers PPS. The pool credits him according to accepted work even when it has an unlucky run finding blocks. His income becomes more predictable. His machine does not calculate faster, though, and not every submitted result produces new bitcoin. [1]
Mining repeatedly tries to find a suitable calculation result, a hash. Here, a hash is a number calculated from data describing the proposed block. The network requires it to be no greater than a set target, so the miner keeps varying the data and calculating a new result. A pool also accepts results that meet its easier condition even though they do not qualify for a new Bitcoin block. Such a result is called a share: ongoing evidence that the machine is working. It is neither company stock nor a piece of a completed block. Shares can have different difficulties, so comparing their counts alone is misleading. The pool measures the work they represent at the assigned difficulty. A submitted result may also be rejected, for example if duplicated or late; the exact rules matter. [2]
PPS does not make more blocks appear. During a long unlucky stretch, the pool must cover agreed rewards from reserves. It charges a fee for this service. The miner hands over the fluctuations caused by block discoveries but still risks not being paid by the operator. A website promise cannot prevent the pool from running out of money or stopping payments. The Bitcoin protocol does not enforce its debt to Jan. A very low fee alone therefore does not establish that an offer is better. [1]
A block reward has two parts: newly issued bitcoins, the block subsidy, and fees attached to transactions. Basic PPS usually prices only the subsidy. Full Pay Per Share (FPPS) also includes an estimated share of transaction fees. Pay Per Share Plus (PPS+) typically combines PPS for the subsidy with distribution of actual fees through PPLNS, which considers recent accepted work when a block is found. The fee portion of PPS+ can therefore still fluctuate with pool luck. An offer’s name is the starting point; its actual calculation is what matters. [3]
Jan sees his balance growing, but his own wallet has received nothing yet. The pool may pay only after a threshold is reached or on a schedule; withdrawal may carry another fee. For an on-chain payment on Bitcoin’s base network, Jan checks that the transaction sends the correct amount to his address. He also checks confirmations: the transaction’s inclusion in a block and the blocks added after it. Lightning Network allows payments without recording each one separately on the blockchain; there, Jan checks successful receipt in his wallet. The pool account saying “paid” is not enough. A Seed Phrase, the word-based backup of his own wallet, also cannot restore a pool login or force payment of its account balance. [5]
When comparing services, Jan asks more than the fee percentage. He needs to know which accepted work is rewarded, whether transaction fees are included, and what is deducted at payout. He then compares the same period and amounts actually received. For a small operation especially, a payout threshold can delay receipt even while rewards accumulate. Profit can only be assessed after electricity, other expenses and equipment costs. The prettiest dashboard chart need not mean the best outcome for the miner. [4] [5]
PPS does not mean a fixed number of BTC per day. If network difficulty rises, the same work has a smaller chance of finding a block and earns less. Halving reduces the block subsidy; with FPPS, estimated transaction fees change too. Pools can use different calculation periods and filters. Luxor, for example, publishes its own methodology, not a universal rule for every FPPS service. Machine downtime or rejected shares also reduce accepted work. And even unchanged BTC income can have a different value in local currency. [4]
A simple basic-PPS model is B × d / D. B denotes the block subsidy, d the share difficulty and D the network difficulty; both difficulties must use the same convention here. The ratio d / D approximately expresses the chance that such a share also meets the stricter network condition. With purely illustrative B = 3.125 BTC and d / D = 0.000001, the result is 312.5 sat before the pool fee. This is neither a current offer nor a fixed network rate. The abbreviation sat means satoshi, the smallest bitcoin unit on the base network. A service may record fractions of a satoshi internally; rounding and payouts follow separate rules. [1] [5]
For the clearest picture, read this entry together with Mining Pool, Mining Share, Full Pay Per Share, Pay Per Last N Shares, Pool Fee, Payout Threshold. The reverse links also lead from Mining Pool, Solo Mining, Pay Per Last N Shares, Pool Fee.