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Today, a note on Parasite Pool, the latest startup trying to tackle the leviathan of bitcoin mining pool centralization — and with a completely novel payout method.

It’s about a 5 minute read.

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How Parasite Pool plans to disrupt the mining pool model

Pleb bitcoin mining is having a Renaissance.

A new pool called Parasite Pool has popped up from Ordinal Maxi Biz founder ZK Shark with a new, unconventional payout model with zero fees. 

Parasite Pool joins a league of cottage industry bitcoin mining startups that are challenging the corporate status quo. With noderunners bootstapping BitAxe miners alongside their Raspberry Pis, the open-source movement is gaining significant traction among both hobbyists and professionals. 

A few narratives echo among the pleb mining movement: home heating, earn KYC-free sats, break up the mining hardware monopoly. As full-pay-per-share (FPPS) pools continue to dominate mining pool market share, the pleb mining movement has taken up the banner to challenge this trend, and now Parasite Pool joins this quest. 

Let’s take a look at how this pool model could shake things up.

The state of bitcoin mining pools

As corporate mining converges around FPPS pools, a counterculture has emerged.

We’ve seen a rise in lottery mining pools such as ckpool and solopool, as well as a focus on blocktemplate selection from Ocean. But the overall mining business has some structural challenges. 

Pools only receive BTC when they hit a block, but pool clients want consistent revenue. FPPS is by far the most desirable payout structure for miners as it offloads the variance in block luck to the pool instead of the miner. In “Full Pay Per Share” (FPPS) miners receive payouts for shares submitted to the pool regardless of whether the pool finds a block or not. The pool acts as a treasury and accounts for the statistical variance of blocks.

Many are critical of the centralizing effects of this payout scheme, most notably the uncompromising pleb miners. In response, the solo lottery mining trend has caught on. Pleb miners have in turn opted for the opposite payout model to FPPS: Lottery mining. In lottery mining, miners pool their hashrate so that the specific worker that finds the block receives the entirety of the block reward a block (3.125btc plus fees, worth roughly $320,000). Most lottery miners tend to be less-economically motivated as they run small home mining setups and do not account for the full business cost of running a scaled mining operation.

With Parasite Pool’s payouts, “plebs eat first”

Parasite pool takes an interesting hybridized approach to payouts. 

The worker that finds the block receives 1 BTC and the rest is distributed to pooled workers. The hybrid lottery setup may still incentivize participation from plebs miners for a giant payday while also ensuring that it’s not just feast-or-famine for everyone else. 

The remaining block reward is distributed similar to a pay-per-last-N-share (PPLNS) model. PPLNS models generally take a rolling window of recently contributed shares (for e.g., a common structure is the last one million shares contributed in the previous 24 hours). Parasite’s payout scheme appears to include all cumulative shares contributed since the pool’s most recent block, which is technically PPLNS but without any rolling window. This new hybrid payout scheme may warrant a new name, but we haven’t seen a statement from ZK and I haven’t seen a term emerge from the mining community yet.

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Chart of the Week

USDT issuer Tether could soon lap Germany as a holder of U.S. Treasury bonds. As of Q1 2025, Tether listed $120 billion of treasuries on its balance sheet. If it were a nation, the company would rank as the 21st largest foreign holder of U.S. treasuries

Blockspace Podcasts

On last week’s Bitcoin Season 2 Writer’s Room, Charlie and special guest Janusz dissect Coinbase’s insider data leak on nearly 100,000 customers.

-CBS & CMH