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From mined coins to money: pool, payouts, taxes
Between a found block and money in your account stand the pool, the network fee, an exchange and the tax office. Each step takes its cut, and it is better to know how much in advance.
Nobody mines large networks alone: a single machine would hunt for a block for years, and all that time the income would be zero. So machines join a pool — a shared search, a shared reward, split by contribution. From there the coins go to your wallet, then to an exchange or a broker, and only then become money. Every step has a price, and it is measured not in percent of income but in actual dollars.
Three payout schemes you will meet
| Scheme | What is paid for | Who carries the risk |
|---|---|---|
| PPS | a fixed rate per accepted share | the pool: it pays even if no blocks were found |
| FPPS | the rate plus a share of network fees | the pool; a higher fee, but even income |
| PPLNS | a share of the blocks actually found | the miner: the network's bad luck is yours |
Where the income goes along the way
The S21 brings $7.87 of revenue a day; on power at $0.05 that leaves $3.67 net — the 1% pool fee is already inside those numbers. The minimum payout at large pools is around 0.001 BTC: mining 0.00009832 BTC a day, that accumulates in about 10 days, and all that time your income sits with the pool. A withdrawal costs a network fee — a fixed sum, not a percentage, so withdrawing rarely and in bulk is cheaper than often and in dribs. Selling on an exchange costs about another 0.1% as a taker, and cashing out costs whatever the venue charges.
What to check about a pool before connecting
- The payout scheme: PPS is smoother, PPLNS pays more in lucky stretches and less in unlucky ones.
- Fee and minimum payout: with a single machine the minimum matters more than the percentage.
- The pool's share of the network: too small a pool pays rarely, too large a one is a question about the network's own safety.
- Where the servers are: ping decides the share of rejected shares, and that is income straight off the top.
- Payout history: under PPS the pool pays out of its own pocket, which is trust, not arithmetic.
Mining straight to an exchange address
People do it to save one transfer fee. There are two problems. An exchange address can change or require a memo tag — the payment then goes nowhere, with nobody to reverse it. And your whole output sits for months in someone else's account, which gets frozen on any review. The sensible route is one step longer: pool → your own wallet → exchange, and you sell when you decided to, not when the pool reached its minimum.
Taxes: the general principle, and why we give no advice
In most countries a miner has two events. The first is receiving coins: that is income, counted at the rate on the day of receipt. The second is selling: there you count the difference between the sale price and that same receipt price. Rates, exemptions and deadlines differ by country and change more often than hardware, so we deliberately give no tax advice. One thing we will say firmly: a payout log — date, amount, rate on that date — is started on day one. Reconstructing it a year later from pool statements is next to impossible, and without it any tax calculation is guesswork.
Sell at once or accumulate is a separate bet
A miner is already long their coin: both the income and the resale value of the hardware depend on its price. Accumulating what you mine doubles that same bet; selling everything at once turns mining into manufacturing with a margin you can see. Both choices are sound, but they are made in advance and written down as a rule — otherwise the first 20% price jump makes the decision for you.
On the mining page every coin shows where it is traded — by venue names, not by a count like “13 exchanges”. Check in advance whether your coin has a live market and on which venue you will be selling it.
Open miningThe pool pays PPLNS and over two weeks fewer blocks than usual were found. What happened to your income and why?
It came in below the calculated figure: under PPLNS you get a share of the blocks actually found, and the pool's bad luck is shared. Under PPS the same fortnight would have changed nothing — the pool pays a fixed rate for work and keeps the risk, charging a larger fee for doing so.
A machine mines 0.00009832 BTC a day and the pool's minimum payout is 0.001 BTC. How often will you see money, and what follows from it?
About every 10 days. Two conclusions follow: your income is held by the pool all that time, so the pool's reliability is part of your risk; and it makes sense to pay the withdrawal fee rarely and in bulk rather than pushing every hundredth of a coin to your wallet.