2018 was not an exceptional year for bitcoin and crypto- industry at large but it has changed the complete dynamics of the crypto mining industry. While the industry has seen a few calamities because of the dropping prices, it has also reduced the dominance of popular mining pools and has led to emergence of newer names.
Unknown Bitcoin Miners Share Increase From 6% to 22% in 2018
2018 has taken sheen of the crypto mining industry as the mining giants saw the wheel of fortune swinging against them. The large mining pools that began the year on the highs saw the biggest drop not just in operations but also in revenues. The year that was expected to get in a few IPO’s of crypto mining and take these players to newer highs ended on a somber note as many giants struggled to survive. Such has been the impact of 2018 on crypto miners that the revenues that surpassed $1.2Bn at the start of 2018 closed off the year 83% down bringing in only $210Mn in December (Diar research).
While nearly all major miners continued to suffer, this period gave rise to some unknown miners who increased their contribution. According to the data provided by Diar Research,
“Unknown miners closed December having solved a whopping 22% of the total blocks up from 6% at the start of last year. The Bitcoin network is currently less likely to experience an attack given the fact the BTC.com controlled pools have lost dominance over the network.”
According to the report, at the beginning of 2018, Bitmain led pools, as well as ViaBTC, in which the behemoth hardware company has invested in, controlled 53% of the networks hash power which has now come down to 39% at the start of 2019.
While the decline in hash rate has been mammoth in its terms, the top 33 pools still continue to hold massive 55% increase in pooled resources last year as the networks hash power grew unabated hitting 275% in August versus the start of 2018 before it began to peter out.
While the larger guys are slowly losing their grip on the hash rates, this is a possible positive sign for Bitcoin’s network security as smaller miners now join the larger pools which have been consolidating their operations resulting in a decline in mining pool dominance
While the contribution of smaller miners is rising, they still sit on fringe lines. The recent rise in bitcoin prices to 4000 levels have made hardware like Bitmain’s AntMiner S9 viable again, the gains would still be minuscule. A BTC price of around USD 5000 will keep them better placed in combating electricity costs to make sustainable profits.
Will small miners increase their share further in 2019? Do let us know your views on the same.