Mining pools solve the issue of unpredictable block rewards for solo miners. By combining hash power, they find blocks more frequently and distribute payouts based on each member’s share of work (often measured as ‘shares’). This reduces variance—rather than waiting ages for a solo find, miners receive smaller, more regular earnings. Pool operators typically take a small fee for maintaining infrastructure, like pool servers and payout systems. However, centralization concerns arise if a handful of large pools gain too much hash rate, potentially threatening the network’s security.