NiceHash has always been at the forefront of innovation, consistently introducing novel software solutions in the cryptocurrency mining industry. However, some of our features are occasionally misinterpreted, often due to a lack of industry-specific terminology. A prime example is the Pay-Per-Share (PPS) reward system, a reward system NiceHash used since its launch in 2014.

Since there is a difference between the industry interpretation of PPS reward system and what NiceHash reward system is, NiceHash has coined a new term called Real-Time-Pay-Per-Share or RTPPS.

The Real-Time-Pay-Per-Share reward system allows miners to get paid by the spot hashrate price in real-time. Unique in its approach, RTPPS calculates the price of shares every minute. This share price is set by bidding of the buyers of hashrate and oftentimes surpasses the regular PPS or FPPS value.

Unlike traditional systems, RTPPS does not require block confirmation for miners to earn their rewards. This aspect is similar to PPS and FPPS, but it uniquely shifts the risk of block reward acquisition from the pool to the buyers of hashrate.

What is the difference between PPS and RTPPS?

The industry understands Pay-Per-Share as a reward system that rewards miners for each valid share contributed. It is very straightforward and easy to calculate. The share value is calculated by dividing the block reward with the current difficulty. It uses the current block reward only (6.25 BTC) and does not reward the extra transaction fees to the miners. The share value only changes once per two weeks when the difficulty is adjusted. 

Anyone familiar with NiceHash knows that NiceHash miners do not get paid from the block rewards directly but from buyers of hashrate that buy the hashrate. Since NiceHash is a spot hashrate marketplace, the buyers are paying the sellers (miners) in real-time. The buyers pay the sellers in real-time for each and every share based on the price of the hashrate that they are willing to pay. The buyers also manipulate the price of the shares/hashrate in real-time. 

A practical example is where a buyer of hashrate buys the hashrate on NiceHash and uses a PPLNS pool. If the pool does not find any blocks, the buyer already paid the bought hashrate. The buyer pays for each and every share in real-time, so there is no need for a trusted intermediary for the payment and hashrate exchange between the buyer and seller. It is worth mentioning that the RTPPS allows miners to earn more than the FPPS rate, also known as the hashprice index. This comes from the fact that some dedicated buyers are willing to pay a premium price for the available hashrate. 

What is the difference between FPPS and RTPPS?

FPPS rate is normally calculated once per day, e.g. 00:00 UTC. The value is based on the coinbase reward and transaction fees inside the block reward. In between daily payouts, the block rewards could increase or decrease dramatically and the FPPS rate will still be the same as it was calculated last. The miners get paid for each successful share they send to the pool. The pool takes a risk of not confirming a block.

RTPPS rate is determined by profit-driven hashrate buyers. They promptly adjust their bids in response to anticipated increases in block rewards, thus dynamically influencing the hashrate. The RTPPS rate is recalculated at frequent intervals—seconds or minutes—accurately reflecting the real-time hashprice value. Miners are compensated for every share they successfully transmit.