BTC.com, one of the largest bitcoin mining pools, now has an Ethereum mining pool. It’s the first time BTC.com has diversified its operations away from bitcoin and into another cryptocurrency. It supports both Ethereum and Ethereum Classic. BTC.com is reportedly working on expanding into Monero and dcash. The timing of the move into Ethereum and other cryptos is worth noting. Bitmain, the owner of BTC.com, is readying for an IPO, which will put its financials in the spotlight.
What is a Cryptocurrency Mining Pool?
One of cryptocurrency’s key features is mining. Mining involves solving complex mathematical calculations to add a new block to blockchain. Adding a new block validates a transaction and releases new cryptocurrency. However, in bitcoin’s case, the process requires a lot of computing power and consumes a lot of electricity. Miners usually need special equipment, called Application-Specific Integrated Circuit (ASIC). Interestingly, Bitmain, which owns the operator of the new Ethereum mining pool, is also the world’s top producer of ASICs.
Considering the cost of ASICs and the cost of electricity, which is sometimes too high to justify bitcoin mining, it is not always profitable for an individual to mine Bitcoins. Therefore, to address the issue of computing power and electricity consumption, miners can group together. Joining forces allows mining cryptocurrencies with smaller individual resources. At the same time, the reward is split evenly among all members of the pool. In this way, mining pools like BTC.com operate by bringing miners together and taking a small fee.
BTC.com’s Ethereum mining pool joins a long list of other pools. The largest pool is Ethermine, which is owned by Austria-based Bitfly together with Ethpool. Ethermine and Ethpool control around a quarter of the Ethereum network hash rate. The hash rate is the speed at which a cryptocurrency network operates. Other large pools include F2Pool, DwarfPool, Ethfans, and miningpoolhub. Therefore, if in the Bitcoin space Bitmain owns the two largest pools, BTC.com and AntPool, it will have to compete harder for the top spot with its new Ethereum mining pool. It’s interesting that AntPool has been supporting Ethereum mining since 2016. However, it doesn’t appear in any statistics of the largest Ethereum mining pools.
Ethereum Mining Pool is Launched Amid Bitmain IPO
Bitmain entered BTC.com in the Ethereum space at a time when cryptocurrencies have significantly declined in value. Bitcoin is down by over 50% since the beginning of the year, and other cryptocurrencies, including Ethereum, have followed suit. Therefore, launching the Ethereum mining pool is a good move for Bitmain to diversify its portfolio. It’s also worth noting that earlier this year, Bitmain also released the first ASIC for mining Ethereum. It is the first and currently the only company that offers an ASIC for Ethereum. Moreover, in March Bitmain unveiled an ASIC for mining Monero. However, Monero opposed the product and updated the software to make Bitmain’s hardware ineffective.
The expansion into new cryptocurrencies coincides with Bitmain’s IPO. The IPO will allow investors to buy shares of Bitmain and get exposure to cryptocurrencies indirectly. Bitmain might also have plans to make its ASICs scalable, i.e., used for other purposes such as Artificial Intelligence. However, it is unclear whether the company that will go public will also include Bitmain’s mining pools.