Binance launches a mining pool even though there are concerns about it centralizing the hashing power. Binance pool, which is the exchange’s pool, officially gets launched on April 27th.
The pool has an offer until May 31st, where it will not charge any fees. After the offer, the fees will be set at a rate of 2.5%. According to the press release for Binance Pool, large miners are given an exception in that they can contact Binance to negotiate the rate or the offer period.
Binance has allocated its 15 out of 1000 employees to work full time on the operation of the pool.
Mode of operation
Unlike many pools, the Binance Pool will support both Proof of Work (PoW) and Proof of Stake (PoS) mining methods. The pool has interrogation with other Binance platforms; hence miners can easily access other platforms and do trading, lending, or staking.
According to the head of Binance Pool Lisa, Binance Pool aims to bridge the gap between traditional mining and financial services. Binance aims to give miners a comprehensive, all-inclusive platform. According to Binance Founder Changpeng Zhao, Binance Pools plans to empower miners as it will lead to the growth of the industry as a whole.
Binance Pool has already started its operation, and it mined its first block on April 24th.
Even though Binance Pool has already taken off, there are concerns from the crypto community that the Binance pool may lead to the centralization of the Bitcoin hash rate, especially among small pools. The Bitcoin hash rate will be dominated mainly by Binance.
Image from Twitter. With Binance in the picture, the mining pools will be dominated by one color.
The head of the Binance pool maintained that Binance pool plans to decentralize the mining sector. According to her, the mining space is better off with more players than with few players. When there are few players in the mining space, it is easy to compromise on the security of the network. More players translate to more computing power, which also leads to decentralization. With more mining pools, the most significant pools will have less computing power leading to more security of the network.
The move of Binance to start a mining pool got the crypto community by surprise. Apart from mining, the platform also plans to protect miners from volatile market conditions. It plans to connect its miners to the technical resources and to offer extra financial services such as low fees and lending services.