How Mining Pools Delegate Work to Miners

Here’s a simple visual explanation of how it works 👇

1️⃣ Pool Prepares Work

The pool selects transactions from the mempool and builds a block header (incomplete).
This incomplete header is the "work" miners will hash.
The pool tweaks the nonce or extranonce so each miner gets a unique piece of work.

2️⃣ Miners Hash & Submit Shares

Each miner receives a unique nonce range and starts hashing.
When miners exhaust their nonce ranges, the pool tweaks the extranonce to give them more work.
Miners submit a share when their hash is below the share target (much easier than bitcoin’s real network target)

Remember

Network Target: Hash must be below this to mine a valid block. (Rare, what actually “wins” a block reward.)
Share Target: Easier target set by the pool. Miners find shares every few seconds to prove they’re hashing and to measure their contribution.

What Happens Next?

When a share is also below the network target, the pool broadcasts the block to the bitcoin network and everyone in the pool shares the reward, based on how many shares they submitted.

👀 Coming Up Next

In our next post, we’ll look at how pools calculate payouts
PPS, PPLNS, FPPS, and other reward algorithms that decide how miners get paid.

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