Bitcoin (BTC) mining polarizes the crypto community again and again. But how centralized is BTC mining actually? What are mining pools and how has mining changed?
What are Bitcoin Mining Pools?
Mining pools are groups of cooperating miners who agree to share mining rewards in proportion to their hash rate contributed. There are many benefits to mining pools as the rewards are more predictable and, in many cases, higher. At the same time, however, they concentrate power on the owners of the mining pool. However, Bitcoin miners always have the option of redirecting their hash power to another mining pool. For example, if you as a miner no longer agree with the actions of the mining pool owner, you can simply switch to another pool.
The Bitcoin network is often criticized for the fact that a large part of the miners come from China. The majority of mining pools are currently located in China. There are around 20 major mining pools and broken down by hash power percentage, an estimated 65 percent of the global hash rate is located in China.
Below are the five largest mining pools that have mined the most Bitcoin blocks in the past three months.
Together, these Bitcoin mining pools have a hash rate share of over 60 percent
Antpool is one of the oldest Bitcoin mining pools. The mining pool is located in China and has a hash rate share of 10.19 percent. This gives AntPool a total hash power of 15.20 EH / s. Behind Antpool is Bitmain, the largest manufacturer of Bitcoin mining equipment. However, Bitmain’s management team has made headlines time and again in the past. Power struggles only broke out in July this yearbetween founder Micree Zhan and co-founder Jihan Wu. The dispute concerned that 10,000 Antminers were illegally stolen from a company facility in Mongolia. Despite the controversy, miners seem to have not lost confidence in the mining pool. Because AntPool is still one of the most important Bitcoin mining pools in the world.
4. Binance Pool
A new player in the Bitcoin mining sector is Binance. The crypto exchange has been operating its own mining pool since April 2020 . In the last six months this mining pool has grown rapidly and now the mining pool has a share of 10.56 percent of the global hash rate. With a hash power of 18.39 EH / s, Binance is currently one of the largest mining pools in the crypto space and the company is also expanding massively in staking .
Binance states that the mining pool’s nodes are already located in America, Europe, China and other parts of the world. In addition, users who connect to the Binance pool would automatically be assigned to the nearest mining node in order to carry out the mining as efficiently as possible. However, there is still no data on how distributed the miners really are within the Binance mining pool.
3. BTC.com Pool
BTC.com is another bitcoin mining pool from the Middle Kingdom. With a hash rate of 18.41 EH / s and a market share of 10.73 percent, BTC.com is currently the third largest mining pool in the world. BTC.com was founded in 2016 and is consistently one of the top mining pools by hash rate share. In addition, that company also supports so-called smart pools. In these pools, the crypto currency that is currently most profitable is automatically mined. The hash rate of the users should be optimally divided in order to maximize profits.
This mining pool is also based in China. With a computing power of 20.18 Ethahashes per second, Poolin has a market share of 11.92 percent. Poolin is one of the most renowned Bitcoin mining pools. Both CEO Kevin Pan and CTO Terry Li previously worked at Baidu. In addition to Bitcoin, the mining company also mines some other cryptocurrencies and also has enormous hash rate shares there.
According to Poolin’s official website, the company even has the world’s largest hash power when you add up the hash rate of all miners.
The world’s largest Bitcoin mining pool also has its origins in China. With a hash power of 24.98 EH / s and a market share of 18.2 percent, F2Pool is by far the largest Bitcoin mining pool. With 60,330 Bitcoin blocks mined , F2Pool has mined the most blocks on the Bitcoin blockchain. F2Pool is one of the oldest Bitcoin mining pools and started in the business field back in 2011.
F2Pool has been one of the largest Bitcoin miners since 2014. To date, no other mining pool has been able to overthrow F2Pool.
How centralized is Bitcoin mining?
The criticism that Bitcoin mining is still very centralized in China is entirely justified. Four of the five largest mining pools come from the Middle Kingdom and if you take a look at the 20 largest mining pools, little changes in this picture. Only a few mining pools from the USA, Hong Kong and a mining pool from Russia are in the top 20. It can be assumed that a large part of the mining comes from China, but one should also consider that theoretically everyone is involved in mining Pool can participate. It is therefore unclear how many miners in the individual mining pools really come from China.