What are bitcoin mining pools?

To mine bitcoin you conduct computing gear designed to fix a specially hard mathematical mystery. Each the mining equipment on the planet is going to be the first to solve the current puzzle and make the following block in the series. 

Whichever machine is first undergoing the bitcoin"block reward" (now 12.5 BTC) and also the charges for the trades included in the cube.

You could opt to mine"solo" with only your machine. In that event every 10 minutes or so you would have a 1-in-100,000 or so chance of becoming the primary machine to resolve the mystery (based on how fast your system was and how a number of different machines were mining across the globe ). 

If you have lucky, you would find the entire 12.5 BTC + charges. If you are not lucky, however, you get squat. That could truly be bad, spending $ on mining gear and gear rather than seeing any recurrence.

Thus legit mining pool. Someone sets up a machine which serves as a planner for mining machines. It assembles puzzle responses from all of the machines which"stage" into it, and if any one of these machines receives the response the coordinating machine receives the 12.5 BTC + charges reward then divides it up among all of the participating miners from the pool. So instead of perhaps getting lucky and getting 12.5 BTC after every 2 decades, you make a steady flow of .01 BTC/day. Predictable and nice.

That is typically about 2%.

For large mining farms, pooling does not always make sense. Why pay a 2% top when you have got sufficient hashpower to be"blessed" rather frequently? For smaller miners, nevertheless, pooling is vital.