Absolute Centralization: Binance-Controlled Smart Contracts and Bitcoin Mining

April 28, 2020 3:37 PM UTC

 

Nearly a year ago, Binance released the Binance Chain and it was received with both fanfare and spite. The exchange flexed its exposure to force IEO projects to issue coins on the BEP-2 standard, removed ETH trading pairs, and proposed to ERC-20 coins the opportunity to potentially receive a Binance listing, should they swap to BEP-2. 

Despite every effort to aggress against Ethereum, CZ had claimed that Binance has no interest in competing against Ethereum. 

Now, Binance has left no cards unfolded as it has announced a new chain that can handle smart contracts, along with every other facility ETH 2.0 aims to provider, like staking and high TPS. According to Binance Officials, the new blockchain (Binance Smart Chain) will present an advanced space to DApp developers. 

However, the crypto community has marked a diverse stance over the Binance new initiative. Some experts state that the new blockchain is similar to existing chains, so it will not impose any impressive change over the crypto space.

Whether or not the Binance Smart Chain is an innovative development is debatable, but there’s complete agreement that Binance is exerting every effort it can to monopolize every aspect of the cryptocurrency space.

Twitter Holler: Binance Launches Pool to Centralize Mining

On April 27, Binance introduced its mining pool called Binance Pool. 

According to the firm’s announcement, until May 31, Binance Pool will charge no fees for operation. Later, the firm will set a 2.5% fee rate. During the press briefing, Binance also stated that larger miners can contact the firm to expand the zero fees period.

Binance’s new mining pool employs both the consensus algorithm Proof-of-Work and Proof-of-Stake. Moreover, Binance Pool is linked with the rest of the firm’s services, including staking, lending, and trading. The integration will allow miners to send block rewards between the Pool and the firm’s multiple platforms.

Lisa He, head of Binance Pool, said, “We aim to establish a comprehensive platform for miners that will bring more possibilities to the mining industry by bridging traditional mining to financial services.”

Binance CEO Changpeng Zhao told, “As an integral part of the global crypto market, empowering miners will therein enable significant growth and scale in the larger industry.”

Binance Pool Claims to bring Decentralization in Mining Sectors

The crypto community has expressed concerns regarding Binance Pool. The community speculates that Binance’s pool will further lead toward the centralization of the Bitcoin hash rate. HsakaTrades, a Twitter user, posted Bitcoin’s hash rate chart: “This hash distribution chart is soon going to be composed of just one color.”

Lisa He responds to the crypto community concerns that Binance’s mining initiative will bring a decentralization in the mining sector. “In 2018, the mining pool of a mining machine manufacturer owned nearly 51% hashing power of the whole Bitcoin network, and the security of the Bitcoin network was doubted,” she further added:

“With industry players like Binance continuing to enter the mining space and contribute computing power to the industry, the mining industry is actually getting more decentralized than it was two years ago. The largest pools have less than 20% of the computing power of the whole network, and the assets on the Bitcoin network become more secure.”

It might be too early to predict how the Binance pool will impact the crypto community but it seems that CZ and its members would keep moving ahead. While attending the BlockDown 2020 conference, Changpeng Zhao highlighted his confidence in the development of blockchain. However, his belief in the decentralized space seems to be driving him towards making it increasingly centralized.

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