Bitcoin mining pool once handling 2.3% of network shuts after hashrate falls 65%

Bitcoin mining pool once handling 2.3% of network shuts after hashrate falls 65%

Computing power directed at Binance Pool has fallen from 26 EH/s in December to about 9 EH/s. Its remaining miners must choose another provider before a Nov. 10 cutoff.

Binance will close its bitcoin mining pool and related services on Nov. 10, giving miners about four weeks to move their computing power elsewhere. Binance Pool’s computing power has fallen about 65% since December, to roughly 9.2 exahashes per second, or less than 1% of Bitcoin’s network. The closure follows other industry exits and could further concentrate block production among Foundry USA, AntPool and F2Pool, which together control about 64% of the network’s computing power.

Crypto exchange Binance is shutting the bitcoin mining pool it launched in April 2020, with the computing power directed at the service down nearly two-thirds from the end of last year.

Binance Pool had an estimated 26 exahashes per second, or 2.3% of Bitcoin’s network, in December, according to Hashrate Index. Its latest table puts the pool at about 9.2 EH/s, under 1% and ranking 11th. That works out to a decline of roughly 65%.

One exahash per second is a quintillion guesses every second at the puzzle that earns a bitcoin block. A mining pool combines work from many machines so their owners receive regular payments instead of waiting to find a block alone.

Binance used a payout model known as full pay-per-share, or FPPS, paying miners for their work and taking on the risk that the pool found fewer blocks than expected.

The exchange said earlier this week that Binance Pool, Pool Savings, Cloud Mining, its transaction accelerator and related services will close at 7 a.m. UTC on Nov. 10, citing an ongoing review of its products and services. It gave no financial explanation for the decision.

Miners have about four weeks to direct their machines elsewhere. After the cutoff, Binance will stop crediting mining shares, the records of work used to calculate payouts. Pool Savings users must redeem their positions, while anyone awaiting a final payout should complete required identity checks by 11:59 p.m. UTC that day.

Pool pages will disappear permanently on Nov. 24, giving customers another two weeks to download records and check payout status.

Four years ago, Binance was offering to finance miners’ expansion. In October 2022, it announced a $500 million lending program through the pool, offering secured loans for 18 to 24 months at interest rates of 5% to 10%. The closure notice does not address that program or disclose any outstanding loan balance.

Fewer pools to choose from

Binance follows SBI Crypto, which shut its pool on July 31 after accounting for roughly 2% of Bitcoin’s computing power. Crypto exchange OKX ended its mining pool services in February 2024.

Hashrate Index’s December report described Binance Pool as the last surviving pool from the period when exchanges expanded into mining.

Read More: SBI Crypto to shut down mining pool that holds roughly 2% of Bitcoin’s hashrate

Poolin, once the largest pool with nearly a fifth of global hashrate, also filed for bankruptcy in July owing about $173 million. Its troubles involved frozen wallet funds and stalled Texas mining sites, and its pool share had already been near zero for years.

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The largest pools now account for a greater share of block production. Foundry USA, AntPool and F2Pool together represented about 64.2% in Hashrate Index’s latest table. December’s three largest held 61.4%, with ViaBTC occupying third place instead of F2Pool.

Traditional pool operators choose which transactions their participating machines work to confirm. Closing pools therefore narrow miners’ choice of providers in a business that influences which bitcoin payments get included in blocks. Miners can redirect their machines to smaller providers, however, and pool shares do not establish ownership of the hardware.

If all of Binance’s remaining computing power moves to the three largest pools, their combined share would reach roughly 65%, assuming the rest of the network stays unchanged. Binance has not identified where its remaining miners will go.

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