At the time of evolution of bitcoin & altcoins, hash rate over network was least due a few number of miners were involved in mining process. Blockchain technology brought a transitional change in a society. The year 2017 was so much under influence of cryptocurrency.
ICO startups companies raised $3.25 billion fundraising through sales of tokens. Price increase in Bitcoin & altcoins remains upward throughout the year. A flood of people entered in block mining worldwide. The rising pressure over blockchain network of each currency increases hash rate.
This lead to difficulty in mining with CPUs & GPUs. High price machines introduced where pool mining is considered an easy way for people to take part in mining pool & rewards of blocks mining are shared between each individual of the pool according to the contributed mining hash power in block mining.
Pay per share (PPS):
Under this method, miners are share their processing power to mine block from pool balance & offers payout according to their contributed share to mine block.
Pay per Last N shares (PPLNS):
According to this method, miners are rewarded on basis of N last shares instead of all shares included for the last shares. This method envisaged fluctuations in payouts & is suitable for fast miners
China Mining Pool:
China is considered one of the biggest mining pools in the world. Top bitcoin mining pool credit also goes to China. It has control over 71% of overall Bitcoin’s network hash power.
Twined with the fact that China is not only the largest manufacturer of cryptocurrency hardware but countless mining farms are in operations there. China is home for massive Bitcoin mining houses.
There are underlying three factors that constitute China the biggest mining pool.
1. Low Electricity Charges
Low electricity cost is the main reason behind massive mining pool in the country. China is producing hydro-electricity, a cheap way of generating electricity after burning coal therefore its industrial regions have been facilitating with low priced electricity this factor outpaced its competitors.
2. Burning Coal:
According to the information source derived from International energy outlook 2009, Coal resource of energy will dominate with 75% electric generation in China as compared to 13% hydro,4% wind, 1% oil, & 2% natural gas by 2030.
This is the cheapest source of electricity production however it is detrimental to environment health but owing to lack of environment policies implementation in China, this form of energy is being utilized to mining of Bitcoin.
3. China is the biggest mining pool in Bitcoin:
China is considered a home for Bitcoin mining pools because it controls around 71% of network hash rate.
The following below chart based on latest updated Hash rate distribution in the mining pools of Bitcoin as on December 27, 2017.
Chinses based the biggest BTC mining pool which is under control of BitMain. AntPool, a virtual currency pool which is accessible for users around the globe. It supports mining of BTC, BTC Cash, Ethereum, Ethereum Classic, Litecoin, Zcash & Dash. It extends services at low fee with high profitability. 24/7 services round the clock, its mining server are deployed worldwide. It controls about 2640 Petahash/ second PH/s) for bitcoin.
F2Pool is a China based mining pool which supports mining of Bitcoin, Ethereum, Litecoin, Dash, Zcash & Siacoin. It controls about 832 PH/S for BTC mining.
It supports multiple currencies & display real-time power monitoring. Users are able to check their earnings at any time, anywhere in the world.
BW Pool is also a China origin renowned pool for mining which established in 2014.
The largest Bitcoin mining operations of NORTH AMERICA is underway:
In the upcoming era, a massive competition has begun to continue to gain edge in pool’s mining. Russia, North America & North Europe are major players which can spawn a shift in power.
Hut 8 mining’s corporation announced to establish biggest mining datacenters with total output over 60 MW of hashing power in North America with assistance of Bitfury, a Georgian based major player in Btc mining, provides software & hardware solutions to business industry. The project aims to introduce America as the biggest cryptocurrency mining industry. The project would be completed in 2018.
In the first phase of scheme 22 data centers will be established with supply of 24 MW of hash power & the second phase will set up 35 datacenters furnish 35.8 MW hash power. Hut 8 mining corporation claims to operate in North America with total supply of 60 MW of hashing power.
Russia is formulating mining regulations:
Russian government planned to formulate mining regulations based on recommendations & proposals submitting by cryptocurrency miners of 15 countries including from US, Israel, India Armenia, Turkey & others.
The Deputy Chairman for education & Science, Mr. Boris Chernyshov expressed his concern that miners from these countries would give briefing to the Parliamentarians about how to mine cryptocurrencies on December 28, 2017. He further described that they have some sample of experimental mining farms that can be merged with the existing robotic systems.
Russian President Vladimir Putin has already shown his intention to implement cryptocurrency regulations by July 2018.
Chinese government crackdown would shift mining operations from China:
According to statistics, 16,764,750 bitcoins so far has been produced & China is the largest source of mining hub that constitute its share around 71% of total bitcoin mining pools.
As we observed the Chinese crackdown on Bitcoin & ban on ICOs would affect mining operations in the country.
The mining process do require extensive source of energy. It is the distinct advantage to China over other countries that it can produce coins at affordable price due to low cost electricity charges. Ban on ICOs by Chinese government & strict rules on mining would undermine mining operations in the country.
If miners would not be able to convert its mined cryptocurrency into fiat currency this could lead to clamp down mining activities.
Neighboring countries would get lead in mining process:
China government continue to impose restrictions, the alternate potential destination for miners would be Mongolia where operating cost is high as compared to China but technical skills along with hardware may migrate across the border.
Hong Kong which is already friendly receptor of blockchain technology would emerge as alternative to China with respect to mining pools.
Global competitors will accelerate their mining operations. For example; Bitfury, Georgia based company started to stablish a largest bitcoin mining operation in North America along with collaboration of Canadian firm, Hut 8 mining corporation to establish 57 datacenters in 2018. The project will furnish 60 MW of hashing power with the purpose to flourish crypto mining in America.
US & Japan have been extending their efforts in shifting the balance in mining operations from China. Russia has potential to put large share in mining of cryptocurrency with low cost electricity.