A proportional pool carries no risk to the pool operator as miners are simply paid out when a block is found. No blocks, no payout! With a Prop pool the risk is all on the miners if it takes longer than expected to find a block then the miners earn less. On the flip side, if the pool is lucky (they will all average out the same eventually) the miners get more. This is in complete contrast to the PPS pool where there is no “Variance”
Using made up data for simplicity, here’s an example:
A block is found after 100000 shares
You submitted 1000 of those shares (you have 1% of the pools total hash power)
There’s 20 ARQ per block
Quite simply you will get 1% of the block = .2ARQ. Now if the pool has a bad round (a round is the time taken to find a block) and it takes 200000 shares to find a block (twice as long) and you have submitted 2000 shares (as you’ve been mining twice as long), you still only get 1% of the block = .2ARQ.
This can also work in the miner’s favor too as if it takes half the time (50000 shares) to find a block and you submitted only 500 – again – .2ARQ.
Basically with a Prop pool you always get your percentage of the block and you win/lose depending on the “Luck” of the pool.
Generally speaking Prop pools are are a better option than PPLNS pools if you like to move around coins and pools a lot and are only a part-time miner.
PPLNS (Pay Per Last N(umber of) Shares
This is the most difficult payout type to explain to noobs so for the sake of simplicity, this wont be 100% technically accurate but you’ll get the idea…
A PPLNS pool is the same as a Prop pool in so much as the miner takes the risk of variance. Where they differ is how the payouts are calculated. PPLNS pools were designed to stop pool hoppers as they don’t technically payout the current block, rather they payout based on an average of the shares you submit over the last x number of blocks. As a result, when you first start mining on a PPLNS pool like d2’s pools you’ll notice that you hardly get paid anything until a few hours later. This will ramp up over time and once you stop mining, you still get paid for a few hours… this is due to the “buffer effect” of PPLNS and pool hoppers hate this as they cant jump on a fresh, profitable round! You, as a loyal miner still get the correct amount eventually but you have to be a bit patient for the ramp up and ramp down times.
So – in summary…
If you are a loyal miner, stay with one pool and feel lucky (you could earn more or less) then you need a PPLNS pool.
If you hop around a lot then a Prop pool is probably best. Worth noting though that Prop & PPLNS will ultimately pay the same to it’s miners. With PROP you will get paid faster than with PPLNS at first.