Ethermine is Ethereum’s largest mining pool. It is followed closely by SparkPool, an Ether mining pool launched in China in 2018 and controls over 22% of the cryptocurrency’s has rate as of Monday.
Due to China’s ongoing crypto crackdown, the world’s second-largest Ethereum mining pool is expected to suspend its operations. SparkPool made an official announcement that it had suspended access to new users on Monday in mainland China. They noted that this was a response to the new measures initiated by Chinese authorities to combat crypto adoption in the nation last Friday.
Gradual Suspension of Services
After these new restrictions, SparkPool will keep shutting down its services with plans of suspending all existing mining pool users both in China and abroad. The announcement noted that these measures are not meant to hurt the users, instead they intend to safeguard the users’ assets in response to regulatory policy requirements. The organization also added that “Further details about the shutdown will be sent out through announcements, emails, and in-site messages.”
SparkPool was launched in China in early 2018 and has kept gaining traction to emerge as one of the world’s largest Ether mining pools, alongside its competitor at the helm, Ethermine. As of Monday, SparkPool’s mining power made up 22% of Ethereum’s global hash rate. This is slightly behind Ethermine’s 24% share.
The Chinese Government’s Negative Stance on Crypto
SparkPool’s decision to suspend operations came after the Chinese government reinforced its suppression of crypto. Last Friday the government declared all crypto-related transactions illegal within China’s borders.
Binance and Huobi, two of the largest cryptocurrency exchanges subsequently suspended new account registrations from users in mainland China. The two are however still servicing users in Hong Kong.
Beijing’s latest crypto ban came from China’s central bank as it intensified its crypto crackdown by targeting offshore exchanges with ties to mainland China. The banks issued warnings of investigating anyone involved in providing support to any offshore exchange. It further reiterated that “Any foreign digital currency exchange that provides services to Chinese citizens through the internet is engaging in illegal financial activities.”
SparkPool’s suspension of services come at a time when Ethereum is switching from a proof-of-work consensus mechanism to a proof-of-stake protocol in 2022. This is a step in the long-scheduled upgrade called Ethereum 2.0. After Ethereum 2.0 takes effect, Ether miners will have fewer choices since the new model will render their mining equipment obsolete.
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