Binance launches mining pool as community fears the centralization of hash power

One of the world's leading crypto exchanges, Binance, has launched its mining pool leaving the crypto community concerned about the centralization of hash power.

Changpeng Zhao owned cryptocurrency exchange Binance launched its mining pool “Binance Pool” on Monday. The crypto community is concerned over the increasing centralization of the hashing power. Binance pool will operate with zero fees until the end of the next month, and after that, the rate will be set at 2.5%. The press release for the Binance pool says that the large miners can contact the exchange to negotiate an extension of the fee-free period.

Binance pool supports both PoW and PoS mining mechanisms.

Binance pool supports both Proof of Stake (PoS) and Proof-of-Work (PoW) mining mechanisms. The mining pool is integrated with the rest of Binance’s platform, which allows miners to easily transfer funds between Binance Pool and the company’s various platforms, including trading, lending, and staking. The head of Binance Pool Lisa said that they aim to build a comprehensive platform for crypto miners that would bring more possibilities to the mining industry by bridging traditional mining to financial services. Binance CEO, Changpeng Zhao said that as an integral part of the global crypto market, empowering miners would enable significant growth and scale in the larger industry.

 

The Crypto community fears the centralization of hashing power. 

Changpeng Zhao, in a tweet, revealed that the Binance pool had mined the first block on April 24.

Binance Pool got mixed reactions from the crypto community, with some commentators expressing concerns that Binance’s pool will result in a further centralization of the Bitcoin hash rate among a small number of pools. Several tweets poured in warning the domination of giant companies over mining and Binance joining the list. However, the head of the mining pool, Lisa He responded to the criticism saying that the launch of the mining pool will comprise a decentralizing force upon the mining sector. 

She further stated that in 2018, the mining pool of a mining machine manufacturer owned nearly 51% hashing power of the whole Bitcoin network and that the security of the Bitcoin network was doubted. She added that with the industry players like Binance continuing to enter the mining space would make the mining sector more decentralized than it was before. 

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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