Binance wants to consolidate more hashrate of the Bitcoin network from Russia and Central Asia in its pool by deploying a physical server node at the BitRiver mining site in Bratsk.
As reported by Binance and BitRiver, the initiative will allow BitRiver ASIC miners who decide to switch to Binance to get a better connection and direct routing to the mining pool.
In turn, Binance will have access to clients who manage devices hosted on BitRiver. At the moment, the total capacity of the enterprise for the production of BTC is 70 MW / h out of the full capacity of 100 MW / h.
According to the Cambridge Bitcoin Electricity Consumption Index (CBECI), the current average monthly hash rate from miners in Russia is 6.08% of world BTC production, and from miners in Kazakhstan - 3.14%. At the same time, the hash rate from Chinese miners decreased from 75% recorded in Q3 2019 to 71%.
Currently, nine of the ten largest BTC mining pools by hash rate are either Chinese companies or they are owned by cryptocurrency exchanges whose owners are tied to China.
Assuming on average BitRiver customers are using modern ASIC miners, such as Bitmain's AntMiner S17 or equivalent, the total hash rate of BitRiver farms could exceed 1,000 Px / s. While this hashrate may only account for about 1% of BTC's total computing power, the deal underscores Binance's strategy of taking over miners across regions.
“Binance Pool offers a very competitive fee structure for institutional miners who are clients of our data center,” said Igor Runets, CEO of BitRiver.
He estimates that up to 50% of the hashrate of BitRiver customers' farms can be moved to the Binance Pool after the deal. Runets added that these customers will mostly leave the BTC.com pool run by Bitmain.
Both sides are not disclosing whether Binance will offer special fee terms to attract BitRiver customers. However, the below-market rate is one of the key steps Binance is taking to attract new miners to the pool. According to available information, Binance wants to establish similar cooperation with miners in Kazakhstan.
Recall that the Binance cryptocurrency exchange deployed a mining pool at the end of April and gradually accumulated 7,000 Px / s of the total hash rate of the Bitcoin network. Binance Pool is currently the eighth largest BTC mining pool.
Binance's pool implemented the Fully-Pay-Per-Share (FPPS) model and initially offered zero fees, and now charges less than 2.5%. But in some cases, the fees offered to major miner operators may be below 1%.
Meanwhile, other large BTC mining pools, such as F2Pool and Poolin, have also previously lowered their fees from 4% to 2.5%, although there are more favorable conditions for large clients.
The FPPS model means that the pool only charges an agreed subsidy fee on each block mined and then distributes subsidies as well as transaction fees to miners in proportion to their contribution. According to current data, since its launch, Binance Pool has mined 488 blocks with a total subsidy volume of over 3,000 BTC.