A mining pool is a group of miners who share their computing power over a network and get rewarded based on the amount of power each contributes as opposed to whether or not the pool finds a block. Mining pools help make revenue for miners more predictable. Huge drops in weekly numbers could highlight that some mining pools are either being turned off or they have decided to mine other currencies. If a mining pool were to control more than half of the total hashrate, it could (while unlikely) lead to a 51% attack on the network.
Our analysts have found that weekly numbers are a better representation of the underlying power, because they are less sensitive to mining randomness. Note that mining pools could suddenly decide to change their tag or input addresses (See Methodology), leading to a decrease of their labelled contribution and an increase in the UNKNOWN labels.
The coinbase transaction (first transaction in a block) helps identify the mining pool. Its input script usually contains a tag which can be mapped to the Mining Pool using the pools.json file from our public repository. Also, this same file contains a list of payout addresses linked to Mining Pools which are checked against the output addresses of the coinbase transactions.