Slush Pool Talks Hash Rate Out of China, Mining Centralization
The stability of the business environment in the U.S. is an important factor to Bitcoin mining hence some Chinese miners want to mine in the U.S. despite the slightly higher price of electricity. Pavel Moravec, the co-CEO at Braiins Systems (Slush Pool) said on the latest edition of Hashr8 podcast that the stability is key as it helps mining operators plan their business properly.
“The fact that it is in the US and they can predict what can happen better than in China is forcing them to diversify in this direction,” he said. “So, I agree that we’ll see more and more hash rate in the U.S. and Canada. Venezuela is somewhat interesting. It’s (like a) small China in South America from the government perspective. I’d better have China and Venezuela than just China…more mining in Iran as well, why not?”
Bitcoin mining as well as its centralization in China became topical again recently after a report claims Bitcoin miners in China control up to 66% of global mining hash rate. The report revived the mining centralization debate after cooling off for a while and also set the talking point for what 2020 may bring for mining operations as energy incentives from the U.S., particularly in Texas, are reportedly going to encourage new miners.
That capital could be deployed in South and North America hoping to better decentralize mining with new pools springing up in different parts of the world, Moravec thinks there is no strong link between the location of pools and the source of their hash rate. He cited how they have been approached severally to help move hash rate out of China because the miners know the risk of having all the hashing power in one place.
“They want to diversify as well which doesn’t mean they will change their pool operator,” he says. “It can go in both directions: some pools can get their hash rate from China and some Chinese miners can put a lot of hash rate outside of China and still use Chinese pools. So these two things are not necessarily the same thing.”
However, despite agreeing that Bitcoin mining pools are seemingly more centralized, he is not worried of a likely 51% attack though some Chinese pools may be influenced by certain individuals. He explains:
“I don’t think, in the current state, anybody has a reason to attack the mining industry. What we understand from talking to other pools or bigger miners (is that) everybody just needs to do the business in a stable way. Nobody wants to influence Bitcoin price because everybody in the mining industry is obviously seeking to sell their coins. So any disruption in this will be devastating for miners. So, I am not afraid of mining centralization. If it is one or three smaller pools mostly influenced by some other people, it doesn’t matter. The fact is, there is few people strongly influencing a lot of pools in China but we don’t have really detailed information.”
He added that most of the pools operating from China are just names and their number is slightly misleading as some of them are basically proxy pools created on a main pool infrastructure run by the same people. He doesn’t expect the number of main pools to increase in the future because there is a threshold to be met and there is a need to “have a reasonable amount of hash rate for the pool to work as it should.”
On the coming block reward halving and the stress that goes with it, Moravec said they are not clear what the price would do, how much of the current Slush pool users would survive, electricity prices etc. It’s mostly a guess game using some indications they can collect, he said.