Bitmain-owned BTC.com, which currently operates one of the largest Bitcoin mining pools, is launching an Ethereum mining pool to allow its miners to mine both Ethereum (ETH) and Ethereum Classic (ETC).
In a press release today, BTC.com announced that it would be adding the option for users to contribute Graphics Processing Unit (GPU) and Central Processing Unit (CPU) computing power for both ETH and ETC.
The Dutch- and Chinese-based BTC.com provides Bitcoin miners across the world an open-source mining pool and wallet to allow them to pool their resources together. Backed by Bitmain, the leading manufacturer of crypto mining equipment, BTC.com claims to have produced 21% of all Bitcoin mined in the last year.
Bitmain Adds Ethereum Mining Pool to its Ethereum ASIC Miner
Bitmain had already begun competing in Ethereum mining with the introduction of its Antminer E3 product, an Application Specific Integrated Circuit (ASIC) based machine specialized for Ethereum’s mining algorithm. With its involvement in BTC.com and the new Ethereum mining pool, the company will now also be able to pull in revenues from GPU mining on the world’s second largest cryptocurrency by market capitalization.
Like its parent, Bitmain, BTC.com has big ambitions for the market and wants to contribute a significant amount to the Ethereum mining network with aims of reaching 12% of hashrate (computing power) within a year.
The current top miner by hashrate over the last 30 days according to data from etherchain.org is the Ethermine Ethereum mining pool with just under 30%. Given the clout that BTC.com has garnered in the Bitcoin mining pool, it has serious potential to disrupt this distribution.
Top Ethereum Mining Pools by Hashrate – Past 30 Days
Ethereum Mining Changes Coming Even Ahead of Proof of Stake
The entrance of BTC.com and Bitmain into the Ethereum mining pool market comes at an interesting time for the cryptocurrency as it plans for its next major update.
An upcoming upgrade to the Ethereum protocol, named Constantinople, will cause a hard fork on Ethereum and is likely to take place in October or November this year. A hard fork is an update to the underlying protocol that makes the old version incompatible thus requiring all users to update to the new code.
The exact content of the Constantinople upgrade is still being debated but includes several changes that could significantly affect Ethereum miners. Some of the Ethereum Improvement Proposals (EIPs) under consideration for Constantinople would incorporate changes to the mining reward per block and delays Ethereum’s ‘time bomb’.
The Ethereum ‘time bomb’ is a piece of code within the protocol that will trigger an exponentially increasing difficulty of mining over time. Basically, if the time bomb triggers it would eventually make mining Ethereum impossible and make the entire blockchain unusable. The developers included this nasty little bit of code into the protocol to put pressure on themselves to transition from the high electricity use that is currently used to secure transactions using Proof of Work (PoW) to Proof of Stake (PoS).
Whereas Proof of Work requires that computing power is performed by ‘miners’ to prove transactions are valid, Proof of Stake requires that validators lock up their own coins to give them the right to check validity of transactions. Then if a validator is proved to be cheating in that verification, in Ethereum’s proposed PoS protocol they would lose their locked up coins.
Ethereum has long planned to transition from Proof of Work (PoW) to Proof of Stake consensus mechanism that would completely do away with the need for mining. Progress on the updated PoS protocols has been positive (as documented in an epic Vitalik tweet storm) but additional time is still needed for massive transition and so delay of the time bomb will happen.
Although Ethereum’s transition to PoS is not on the immediate horizon, BTC.com believes that it can continue to operate as a ‘staking pool’ when that transition does take place.
How long Bitmain and BTC.com have to plan for their contribution to a PoS-based Ethereum could very well be be based on the discussions that happen tomorrow during the Ethereum Core Developers Meeting to decide which EIPs make the Constantinople cut.