Cryptocurrencies are the way of the future, according to some economists, but things are not looking optimistic for the digital coins, following China's ban on the crypto mining industry last year. After restrictions were imposed in Gansu, Hebei, Inner Mongolia, Qinghai, Sichuan, Yunnan, and Xinjiang province. Several companies including SparkPool, which is the second largest Ethereum mining pool in the world, had to cease their operations.
The company that got established in 2016 in Hangzhou has announced that it will comply with the enforcement of crypto mining bans in mainland China. However, it didn’t stop only it’s domestic activities, but suspending its international mining pool services.
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Contents
- Mining Pool for Digital Assets
- Global Crypto Mining Hub
- Change in the Leading Position
- Final Thoughts
- FAQs
Mining Pool for Digital Assets
The shutdown of SparkPool is a serious blow for the crypto network, as an Ethereum mining pool, the Chinese company contributed about 22% of the whole network hashrate. And according to some estimates, SparkPool Ethereum's pool incorporated nearly 70,000 miners.
The decision of the Chinese authorities to enforce regulatory changes is not hurting only Ethereum. SparkPool also provides pools for Beam and Nervos, two alternative proof-of-work blockchains. Both were shut down simultaneously with the Ethereum pool.
SparkPool supported its decision with a promise to protect the crypto assets housed on its servers and owned by Chines citizens. Although the regulatory requirements restrict producing and trading of cryptocurrencies, China is not confiscating or banning Chinese users from holding on to their assets.
Global Crypto Mining Hub
Until last year, China contributed substantially to the crypto market, with Hangzhou-based SparkPool being one of the multiple companies that made the country home to the world's largest number of crypto miners.
There are multiple reasons for the governmental crackdown on cryptocurrency mining. Some experts claim that the decentralized nature of blockchain technology is not something the authorities in China feel comfortable with, and that is the main reason for banning crypto services. The explanation that was offered signaled worries about environmental impact from cryptocurrency mining.
Processing the data for Bitcoin and other cryptocurrencies is dependent on huge energy consumption, which in turn produces more greenhouse gas emissions. This has been a concern for several nations and China has been the most especially vocal on the issue.
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Change in the Leading Position
Following the ban, crypto exchange Huobi, which is one of the largest trading venues that work with Chines customers, announced that it will also retire the current China-based user accounts and will not be allowing new users to join the exchange.
The ban has impacted the value of crypto securities, but at the same time, other countries around the globe are experiencing growth in their share of the Ethereum network.
Logically the investment in crypto mining in China has declined to zero, and we should know that previously about 75% of global Bitcoin mining was done in China. Currently, the leading position in cryptocurrency mining is held by the United States.
Final Thoughts
The crypto crackdown in China is nothing new, the government has previously expressed disfavor about the digital asset, and has implemented regulation, but last year it tighten the grip and declared cryptocurrency activities illegal.
Previous bans focused on some aspects of cryptocurrency-related activities mostly investment-based. This time authorities are ramping up surveillance relating to crypto activities and enforcing more serious penalties on a person involved in illegal operations.
Because of this China's companies working in the cryptocurrency industry will have to suspend their mining activities or transition the infrastructure internationally, and that why circumnavigating the strict regulations.
FAQs
What Happened to SparkPool?
After the ban on crypto-trading imposed in China, the mining pool SparkPool ceased its activities in China and internationally.
Where Is SparkPool Located?
Ethereum mining pool SparkPool is based in the Chines city of Hangzhou.
What Is the Best ETH Mining Pool?
It depends on how you classify the best, are you considering the number of users, the speed such as hash rate, or market percentage. Some perceive Ethermine as the best ETH mining pool.
What Is Spark Pool?
SparkPool is a global Ethereum mining pool, initially named Ethfans.
