Bitcoin Mining Pool Once Handling 2.3% of Network Shuts After Hashrate Falls 65%

Digital asset platform Binance is discontinuing the bitcoin mining pool it originally introduced in April 2020, with the computational power pointed at the network dropping nearly two-thirds since the close of last year.

According to Hashrate Index, Binance Pool maintained an estimated 26 exahashes per second, representing 2.3% of the Bitcoin network, back in December. Their most recent metrics place the pool at approximately 9.2 EH/s, falling below 1% and sitting at the 11th position, which translates to a contraction of approximately 65%.

One exahash per second equates to one quintillion guesses every single second directed at solving the cryptographic puzzle required to win a bitcoin block. A mining pool aggregates the output of numerous machines so that participants receive steady disbursements rather than having to wait until they discover a block independently.

Binance utilized a reward mechanism known as full pay-per-share, or FPPS, compensating miners for their output while absorbing the risk if the pool managed to discover fewer blocks than anticipated.

The trading platform announced earlier this week that Binance Pool, Pool Savings, Cloud Mining, its transaction accelerator, and associated features will terminate at 7 a.m. UTC on November 10, attributing the move to an ongoing evaluation of its offerings and services without providing financial justifications for the choice.

Miners are given roughly four weeks to point their hardware toward alternative destinations. Subsequent to the deadline, Binance will halt the crediting of mining shares, which serve as the logs of computation utilized for working out disbursements. Participants in Pool Savings are required to withdraw their holdings, while anyone awaiting a concluding payment must finalize necessary identity verification procedures by 11:59 p.m. UTC on that date.

Pool dashboards will vanish permanently on November 24, affording users an extra two weeks to export logs and verify reward statuses.

Four years prior, Binance was providing financial backing to assist miners with scaling operations. In October 2022, the company revealed a $500 million financing initiative channeled through the pool, supplying collateralized loans spanning 18 to 24 months with borrowing costs between 5% and 10%. The termination notice does not reference this initiative nor does it state any remaining loan balances.

Fewer pools to choose from

Binance joins SBI Crypto, which shuttered its pool on July 31 after representing roughly 2% of the total computing power on the Bitcoin network. Cryptocurrency platform OKX also wound down its mining pool operations back in February 2024.

The December report by Hashrate Index characterized Binance Pool as the final remaining pool originating from the era when trading platforms broadened their operations into mining.

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

Poolin, historically the top-ranking pool accounting for almost a fifth of worldwide hashrate, likewise sought bankruptcy protection in July with liabilities near $173 million. Its difficulties stemmed from locked-up wallet balances and stalled mining facilities in Texas, while its network footprint had lingered near zero for years.

The primary mining pools now command a larger portion of block creation. Foundry USA, AntPool, and F2Pool combined accounted for approximately 64.2% according to the latest figures from Hashrate Index. The top three platforms in December held 61.4%, with ViaBTC occupying the third spot instead of F2Pool.

Traditional pool administrators decide which pending transactions their connected hardware attempts to validate. Consequently, shutting down pools restricts the choices available to miners in an industry that impacts which bitcoin transactions get added to blocks. Even so, miners have the option to reroute their hardware to smaller alternatives, and pool contributions do not confer ownership of the physical equipment.

Should all remaining computational power from Binance migrate to the top three pools, their combined proportion would climb to roughly 65%, presuming the remainder of the network remains steady. Binance has not specified where its displaced miners will migrate.