Posted 12 months ago | by Ben Armstrong
Binance Launches its Mining Pool – Claims Lowest Costs
Changpeng Zhao, the CEO of Binance, recently delivered a tweet that Binance is launching the beta version of its mining pool, and he claims that it will provide the lowest fees in the industry.
"The first block ever mined by the @Binance Mining Pool. Still in closed-beta. Going live soon. As always, LOWEST FEES of any mining pool."
Early this month, Zhao confirmed the Binance mining pool would continue development when media reports on its working began circulating the web.
The average mining fees on popular mining pools are currently around 0-4% and varies based on the mining rewards and payment schedule. Also, F2Pool, BTC.com, Poolin, and AntPool are in lead for the distribution in mining pools.
Binance Wants to Drop Mining Costs
Okex and Huobi are still hosting in mining pools, but Binance wants to add some competition to the marketplace. Dominance by a single entity in any marketplace leads to a monopoly and especially with decentralization, competition is good for any business.
The mining pools will look to offer lower fees and more efficient withdrawals.
Additionally, Binance is seeking out to add support for other cryptocurrencies and give investors more options. Investors won't be locked into mining BTC, and should have some choices in terms of where their investment capital flows.
The Binance PoW pool will help in improving the crypto liquidity of the exchange. Binance currently offers staking, lending, and borrowing for a variety of cryptocurrencies, which include Tezos, EOS, NEO, and BNB.
Mining Pools Make the System Stronger
While mining pools are aimed at investors, they actually fill a role in creating a more robust crypto ecosystem. Instead of relying on companies that own the mining rigs and operate them to mine coins, mining pools offset their risk by offering the public the chance to speculate on their profitability.
When the general public has the ability to support crypto mining (and profit from it), it allows the rig operators to divest risk to a much wider base. As the current downturn in oil prices shows, sometimes market dynamics can change quickly, with dire financial consequences resulting from the shift.
Mining pools take the risk of owning and operating equipment and distribute it over the global population in real time. Clearly, this wouldn't be possible with a physical commodity, but it is a growing trend in the world of cryptos.