Once considered the industry leader in cryptocurrency mining, the market share for one-time dominant leader BTC.com has diminished as competition continues rising within the crypto mining sector. Based on the data from blockchain.info, the Bitmain owned mining pool now only accounts for roughly 15.7% of the blocks mined on the BTC network.
Startup competitor Poolin has emerged as the new leader in the sector. The China-based firm was founded by former Bitmain employees in 2017 and has taken a slight lead over BTC.com, mining 17% of the blocks on the BTC network. The pool’s swift rise started in late 2018 and steadily continued during 2019.
Mining pool F2Pool is in second place, with 20% of the hash rate. Rounding out the top four is AntPool, with a 8.8% hash rate share. Of the four industry leaders, Antpool is the only pool whose market share has been consistent during the past two years. Bitmain also owns Antpool.
Unknown pools merged together to continue to account for the most significant share of blocks mined on the BTC network with a 21.8% market share counteracting the mining centralization. Since mining is a critical component of BTC required to keep the blockchain updated and secured, unknown pools undoubtedly help by keeping the network decentralized and block rewards distributed.
Overall the increased competition and parity is a positive development within an industry previously concerned about the alarming state of BTC network mining centralization.
During the first half of 2018, Bitmain mining pools BTC.com, AntPool, and ViaBTC grew so dominate that they nearly controlled 51% percent of the BTC network’s hash rate. If mining power is centralized in a few hands or a single authority controls the majority of the hash rate, it opens the door to collusion to orchestrate a 51% percent attack to reorganize the blockchain and start double-spending cryptocurrency.
As the competition for the top spot on the BTC blockchain intensifies, many miners have begun leaving the network as BTC mining profitability continues to decline as we approach the halving next in 2020. Sometime next summer, the subsidy for mining will decrease, and nearly 90% of all Bitcoin will have been distributed.
Miners will mint just 6.25 BTC for successfully adding a block to the BTC blockchain, while revenue derived from transaction fees will remain capped due to the smaller block size. Miners must hope for a gradual and constant increase in price as well as fees driven by the halving creating a scarcity mentality because of the reduction in supply.
In Satoshi’s original vision, the static subsidy was a temporary measure intended to support miners as transactions grew. Transaction fees were designed as the primary source of revenue supporting miners. Miners are now looking to the Bitcoin SV blockchain, which fulfills Satoshi’s vision of bigger blocks containing a high volume of transactions. Miners are being rewarded for switching chains as transaction fees on BSV continue rising, making mining BSV more profitable than BTC. Daily transactions on the BSV network now exceed both BTC and ETH proving Bitcoin SV is the only sustainable and exciting long-term blockchain for miners.
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