Over the past 12 months, large cryptocurrency exchanges have entered digital currency staking and created SHA256 mining operations. Just recently, Binance announced the launch of its mining pool following exchanges like Okex and Huobi. In addition to this, a large number of cryptocurrency exchanges are staking proof-of-stake (PoS) coins, which have caused some complaints in the crypto community.
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Binance reveals the company’s plans to launch a mining pool in the second quarter of 2020
Since the cryptocurrency bull run of 2017, a number of cryptocurrency platforms have grown tremendously over the years. For example, a variety of digital currency exchanges such as Kraken and Coinbase have acquired a number of startups and projects in order to scale down further. Last summer, news.Bitcoin.com reported on how Coinbase, the San Francisco-based digital currency exchange, acquired Xapo and quietly became the world’s largest bitcoin bank by held reserves. Now, in order to increase revenue, a group of exchanges has started to stake PoS coins and mine SHA256 assets such as BCH, BTC and BSV. Now Binance, one of the world’s leading cryptocurrency exchanges by trading volume, has announced that the company is starting a mining pool.
The story was first published by Coinlife editorial from Russia and later by Binance CEO Changpeng Zhao (CZ) confirmed the rumor on Twitter. The move follows the $ 400 million cash and stock deal at the end of March, which saw Binance acquire the popular Coinmarketcap.com website. “Yes, a Binance Mining Pool is coming soon,” CZ tweeted. “A new addition to our suite of Binance financial products that we offer including staking, earnings, savings and loans,” added the CEO. The Coinlife report explained that Binance was hiring people to maintain SHA256 mining rigs and that the new pool would be open to the public during the second quarter of 2020.
Various exchanges begin mining proof-of-work coins, while Exchange staking exposes vulnerability in PoS systems
Binance also follows a number of other exchanges that are entering SHA256 mining and have launched pools. Mining rigs that process the SHA256 algorithm and attempt to mine blocks can dedicate the hashrate to one of the three main Bitcoin-based branches (BTC, BCH and BSV). Cryptocurrency exchange Okex started a SHA256 mining pool last August, and Huobi announced a pool in September. Okex has a decent amount of hashrate on the BTC chain, while Huobi regularly mines BTC and BCH. None of these exchanges that manage SHA256 pools undermine the Bitcoinsv (BSV) network. Bitcoin.com also operates an exchange and maintains a mining pool that dedicates hashrate to both BCH and BTC.
Finally, there is a large amount of exchanges that are also staking PoS coins and allowing customers to bet tokens using the trading platform’s wallet. Many cryptocurrency advocates have enjoyed exchanges that offer staking, but the scheme doesn’t come without controversy. For example, many people think large cryptocurrency exchanges pose a threat to PoS systems, and the Tron-Steemit fiasco exemplified the problem.
Steemit community members have accused a large number of exchanges of exploiting large swathes of PoS tokens in order to influence the governance model. Some believe that the Steemit community was unable to initially shell out due to this problem. However, eventually, the Steemit community that believed they had been wronged, formed another project by forking Steemit and named the Hive platform. However, the event still opened a box of worms for staunch supporters of the proof-of-stake consensus.
What do you think of the mega cryptocurrency exchanges that go into SHA256 mining operations and PoS staking? Let us know in the comments below.
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