Mining alone or solo is profitable, although the chances of succeeding in mining a block are minimal given that mining is highly based on luck. Instead, mining in a pool gives the high hash power you need and rewards you depending on the work that you have done.
However, before joining a pool, you should bear in mind the block reward distribution method and the fee levies charged for managing a pool. Furthermore, pools are important because they minimize the chances of cheating since individuals are barred from swapping the pools.
In order for someone to choose the best mining pool that corresponds to their needs, they need to know about some very important aspects:
The model of payment distribution on which the pool is operating from determines the fees levied, while the fees determine the party that is taking the risk, such are the miners or the operator of the mining pool. Therefore, the fees increase when the mining pool operator assumes the risk and decrease when the miners assume the risk.
Although there is a standard fee of 1%, there are variations that range between 0% and 4%. In case someone finds a pool with a higher fee, they should consider the payment method as well as other pool’s features. In the case where the payment method and those features are similar, then they should choose the pool that has the lower fee.
There are cases where the fee is actually 0% and although it is an unusual case, it is a possible one. This can occur when new mining pools zero rate their charges in a bid to attract customers or depend on donations and other methods.
The payment model is that of rewarding the operator through Proof of Work when they assume the risk. However, the payment methods vary:
Prop / Proportional
It is the simplest method. The reward is split between the hashing power contributed proportionally by the miners of each block. When a block is found, the reward is distributed among all workers proportionally to how much shares each of them has found.
Pay Per Last N Shares (PPLNS)
It is defined by the last block as well as the last N shares. Therefore, the miners benefit from it in case they have not been connected but not by their own fault. Thus, the miners will be eligible for a payout based at the time of N.
Capped Pay Per Share with Recent Backpay.
Equalized Shared Maximum Pay Per Share. Like SMPPS but equalizes payments fairly among all those who are owed.
Pay on Target. A high variance PPS variant that pays on the difficulty of work returned to pool rather than the difficulty of work served by the pool.
Pay Per Last N Shares. Similar to proportional but instead of looking at the number of shares in the round, it looks at the last N shares, regardless of round boundaries.
Pay per Last N Groups (or shifts). Similar to PPLNS but shares are grouped into “shifts” that are paid as a whole.
Recent Shared Maximum Pay Per Share. Like SMPPS but in this case, the system aims to prioritize the most recent miners first.
Shared Maximum Pay Per Share. Like Pay Per Share but pays no more than the pool earns.
Pay per Share. Each submitted share is worth certain amount of BC. Since finding a block requires <current difficulty> shares on average, a PPS method with 0% fee would be 12.5 BTC divided by <current difficulty>. It is risky for pool operators, hence the fee is highest.
Other considerations are on currency, location and vardiff (variable difficulty).