Choosing your payout threshold: the arithmetic

What the payout threshold does

Your payout threshold is the balance you must reach before the pool sends you anything. Below it, your earnings build up. At or above it, the next payment round pays you and the balance resets.

It does not change what you earn. Every share you submit is credited the same either way. It changes how often that credit becomes a transaction on the chain, and each transaction has a cost.

The network sets the cost of a payout, not the pool

Sending coins costs a network fee. It is paid to the chain, not to the pool. That fee is why a threshold exists at all.

Without one, a rig earning small amounts would get tiny payouts. The fee would eat a serious part of each one.

So the maths is a ratio, not an amount. A fee is only cheap or expensive next to what it moves. The same fee is trivial on a large payout and ruinous on a tiny one.

Why batched payouts change the usual advice

The common advice is to set a high threshold to avoid fees. That advice assumes each payout is its own transaction. Pool payouts generally do not work that way.

A payment round pays many miners in one transaction with many outputs. The transaction carries one fee. Adding one more recipient costs far less than a whole separate transaction.

So your share of that fee is small. It does not fall in proportion when you double your threshold. You never paid for a transaction of your own.

In practice, raising a threshold saves less than people expect. The reasons to raise it are usually not about fees at all.

How to see who pays the fee and what it costs

Each pool decides whether the network fee comes out of your payout or the pool absorbs it. So look rather than assume.

Your payments page shows every payment with its fee and the number of miners it paid. That answers two questions at once. What does one payment cost to send? How many people shared that cost?

Take a few recent rows and divide the fee by the payee count. That is the real per-miner cost of one payout on this chain, at current network conditions. Every decision below turns on that number.

A rule of thumb for your threshold

Set your threshold so your share of the fee is comfortably under 1% of the payout. Below that, the cost of being paid is a rounding error next to the normal swings in your earnings. Above a few percent, you are working for the chain.

Two things move that number without you touching anything:

• Network fees rise and fall. A threshold that was fine can stop being fine on a congested chain.
• The coin price moves. A threshold set in coins is a different amount of money from month to month.

Both are reasons to check again now and then, rather than set it once and forget it.

What a low threshold really costs

• More fee events. But fewer than intuition suggests, because of the batching above.
• More records. If you must account for mining income where you live, every payout is a separate thing to record and value. Paying 4 times as often means 4 times the paperwork for the same money. For some people that is the largest cost on this page.
• More dust. Dust means small leftover amounts. Frequent tiny payouts become many small unspent pieces in your wallet. Spending a wallet made of small pieces later costs more than spending one made of large ones.

What a high threshold really costs

• Your balance sits with the pool, not in your own wallet. However good the pool is, this is still somebody else's server. A non-custodial payout, sent straight to your own wallet, exists to shorten the time your coins spend there.
• You are exposed to the price for longer without choosing to be. Waiting a month to be paid is a decision to hold for a month, whether you meant it or not.
• A small miner can wait a very long time. Work out how long your hashrate takes to reach the number before you set it. A threshold you reach twice a year is a savings account you cannot withdraw from.
• If you stop mining below it, the balance stays. HeroMiners keeps it for you, but it will not move on its own.

Three cases with an easy answer

• Testing a new rig or a new pool: set it low. You want a real payout to reach your real wallet as early as possible. Only that proves the whole path works end to end, so the fee is worth paying once.
• Stopping mining: set it low before you stop, not after. Reaching a threshold needs hashrate, and you are about to have none.
• Steady mining that is meaningful money: work out your share of the fee from your own payments page. Then pick the smallest threshold that keeps it under 1%. That number differs for a single card and for a farm.

How to set your threshold

Set the threshold from your dashboard, on the settings panel with your other miner preferences. It takes effect from the next payment round.

The pool applies its own minimum under whatever you choose. A number below that floor is raised to it, not refused.