Ethereum’s Second Largest Mining Operation to Close
In an effort to be ‘maximally compliant with regulatory requirements’ the world’s second largest Ethereum mining pool announced today that all operations are to halt at the end of the month.
Hangzhou based SparkPool released the information yesterday confirming all activities were to cease by Thursday 30th September.
This announcement closely follows Friday’s decision that all new users were banned from registering with SparkPool with immediate effect.
SparkPool Contribute 22% of Hash Rate
Since its inception in 2016, SparkPool has evolved to become the world’s second largest Ethereum mining operation by hash rate closely behind industry behemoth Ethermine. SparkPool currently contribute 22% of the entire Ethereum hash rate with a whopping 142 terra-hash per second.
SparkPool’s announcement follows a call from the State Council of China in May this year for local authorities to crack down on crypto mining activities and, while this had been somewhat of a success, a number of stealth mining operations have been slowly resuming work over the last few months.
China's Decision May Have an Impact
Many people believe the announcement was heavily influenced by the Chinese Central Government’s recent decision to declare all crypto related activity illegal with immediate effect (Thursday 23rd September).
Following the initial country wide clampdown in May this year, Bitcoin miners Poolin and BIT Mining have been looking for new premises and had ear marked North America and Central Asia as possible new sites.
While SparkPool could also have circumnavigated the ban by taking their mining operation overseas they evidently have chosen not to.
Global mining outfit, Huobi, declared on Sunday September 26th that all China based users will be unable to access their services by the end of the year.
The news did not come as a huge surprise to many industry leaders as China continue to crackdown on the cryptocurrency eco-system within the country. Consequently, SparkPool seem to have made the decision with the purpose of protecting client assets.
The impact on Ethereum network performance and price is yet to be seen.
Many proponents view the China ban as bullish for crypto as pushback from China has historically been good for the rest of the Western world. In 2009, China banned Facebook and YouTube from its shores closely followed Google and Wikipedia. All went on to see massive success in other markets.
SparkPool have not released any further information regarding their future plans at this point however given Ethereum’s continued port to a Proof of Stake non-mining mechanism SparkPool’s decision may be rather telling.
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Author: Mark Harridge
Mark Harridge first came across Bitcoin and began to use its peer-to-peer payment network in mid to late-2011. He quickly understood that this technology would change the world. Mark is passionate about crypto adoption, from a macro economic and institutional perspective, and the numerous factors that fuel the relentless march towards individual self sovereignty and the decentralised society of the future.