An analysis on the profit differences between mining pools due to txs fees.

[JRamos]

Hi there.

I have calculated the average profit because of txs fees (no subsidy) per block , for each miner, in the last 4 months.

You can find it here:

https://mempoolexplorer.com/miner

You can order ascending or descending by column, and change values to USD,BTC or Sats.

I was expecting for all pools having a decent % mining share (Binance, AntPool, ViaBTC, F2Pool, Slush, Foundry USA and Poolin) to have this value more or less the same. I was expecting this because mining activity is independent of mempool size, and all miners on average will have the same luck obtaining tx fees during a long period of time.

But I found to have almost a 15% variance between mining pools. (rejecting small pools as btc.com, ultimus, 1Thash... because not having enough data to be representative).

The causes of this can be:

- Optimizations in txs selection algorithm by pool operatos-> See https://gist.github.com/Xekyo/5cb413fe9f26dbce57abfd344ebbfaf2#file-candidate-set-based-block-building-md (less than 0,2% improvement).

- Better Network connectivity among miners -> See https://www.dsn.kastel.kit.edu/bitcoin/ (Txs and Block propagation time are really small to have any impact)

- Txs included by miners themselves with no broadcast-> I do not take into account this txs by comparing against my mempool when block arrives.

- Empty blocks-> I do not take into consideration for the average the empty blocks, and anyways they are only a few.

- Transaction accelerators-> This is my main point.

Could be that txs accelerators are the main factor explaining those differences? If that is the case, Poolin.com is the most used txs accelerator since they choose much worse sat/vByte ratio txs in average than the other miners (See Average lost reward column). And they are effectively way down the ranking of on-chain profit.

Have you ever seen this statistic anywhere else?

[DaveF]

Interesting, but as the saying goes, 'we don't know, what we don't know'
Accelerators may or may be part of it.
Along with agreements with exchanges, i.e.can exchange  "A" always send out at a low fee since pool 'B" will always put it in their next block since they are getting BTC on the back end.
Or, does pool "A" not want to deal with CPFP or other things for some odd reason so they ignore all those TX.
And so on.

But still a nice site you setup.

-Dave

[JRamos]

But still a nice site you setup.

Thanks DaveF. Yesterday I was fighting with the impostor syndrome.

[ABCbits]

Nice work OP. I don't remember there are analysis about miner pool due to to TX fee, so i find it's interesting analysis. I also appreciate you make your website open source. But aside from required parameter (txindex, zmqpubsequence, etc.), do you run Bitcoin Core with default parameter?

- Better Network connectivity among miners -> See https://www.dsn.kastel.kit.edu/bitcoin/ (Txs and Block propagation time are really small to have any impact)

Also worth to mention there are several protocol used by miner/pool for faster block propagation. IIRC there are FIBRE, Falcon and Fast Relay Network.

[JRamos]

Nice work OP. I don't remember there are analysis about miner pool due to to TX fee, so i find it's interesting analysis. I also appreciate you make your website open source. But aside from required parameter (txindex, zmqpubsequence, etc.), do you run Bitcoin Core with default parameter?

You have complete self hosting instructions in https://github.com/mempoolexplorer/mempoolexplorer There's a section about bitcoin.conf

Let me know if you had any problems following the instructions to change them accordingly. Thanks.

Also worth to mention there are several protocol used by miner/pool for faster block propagation. IIRC there are FIBRE, Falcon and Fast Relay Network.

Yep!, a point to be aware of.

[dkbit98]

Have you ever seen this statistic anywhere else?

No I haven't seen anything similar so far, and I see you have other interesting statistics on your website.
According to this Poolin.com and Kucoin pool have highest lost average fees per block, and we know they are not at all the biggest pools.
One thing you could to improve your website is adding more graphical stuff like pie charts.

[DaveF]

Was thinking about this some more. For a while I have wondered if the larger pools are running a standard stock node or something that is highly customized. And what other configurations they may have.
When you see information like this it makes you think about what they have changed on the back end and why. And if it's better for the pool / miners.

I saw this:

According to this Poolin.com and Kucoin pool have highest lost average fees per block, and we know they are not at all the biggest pools.

And then thought, there has to be a reason, but since we know more or less how core operates unless they really tweaked their config are they even running it or something else.

Thinking about what I said here:

Along with agreements with exchanges, i.e.can exchange  "A" always send out at a low fee since pool 'B" will always put it in their next block since they are getting BTC on the back end.

Is the possibility of a FU to certain people. i.e. we don't like centralized exchanges so all TX from known exchange addresses will be ignored.
OR just avoiding US based ones like Coinbase / Gemini and so on or

Unless they come out and tell us we will never know, but it's an interesting thought experiment.

-Dave