Mining Pools

Today, June 14, 2019, we released the second biannual list of Top 50 cryptocurrency mining pools.

We do this in conjunction with the Top 500 supercomputing list that is released twice a year, in June and November. That list has been a matter of national pride for the US, Japan, China, and many other countries.

Cryptocurrency mining is a specialized form of supercomputing, producing billions of dollars of economic value per year.

In the Information Age, money has become information. Bitcoin is energy converted to information and encapsulated as secure immutable transactions on a time chain. This is money in the Internet, that we call Money 3.0. Currently it is primarily a store of value, a sort of digital gold, but it continues to grow use cases as a medium of exchange, and unit of account.

Cryptocurrency mining operations are large-scale, run on clusters, but also consist of highly decentralized pools that anyone can join and contribute their equipment to the effort, for proportionate rewards. Most mining is done on custom ASIC computing rigs, highly optimized for the relevant crypto consensus algorithm.

Using statistics readily available on the hashing rates and block production rates for the large mining pools, we can tabulate the economic value produced by these pools.

We consider only mined coins, that is, those that use some type of Proof of Work algorithm such as Bitcoin’s Nakamoto consensus.

We do not consider coins created with other types of consensus mechanisms, since they require no significant supercomputer-class computation. This includes coins produced through premining, Proof of Stake, distributed Byzantine Fault Tolerance and the like since supercomputing resources are not involved.

While there are a number of lists that provide hash rates and block production rates for pools mining a single coin, our lists are the first aggregation of which we are aware.

This raises the question as to how to compare mined coins that have radically different hashing rates and whose consensus algorithms, although often similar to Bitcoin conceptually, differ in the details.

We settled on the economic value of the mined coins that are produced. This enables us to make comparisons across coins when rank ordering the list of mining pools.

We compare the dollar value of a day’s mining from a given pool, with that of other pools, across the top eight mined cryptocurrencies.

The top 10 mined coins have market caps above $0.5 billion dollars, and the #1 coin, Bitcoin, as of our snapshot taken on May 30, 2019, had a market cap of $154 billion.

When we rank order the top 50 mining pools we find that the top eight mined coins in economic value are: Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Zcash (ZEC), Bitcoin SV (BSV), Dash (DASH), and Monero (XMR). All of these except Monero are ASIC-friendly, and production is dominated by ASIC miners and clusters. Monero relies on GPUs.

For Bitcoin, Ethereum, and Litecoin we have used 30 day averages as of May 30, 2019 for block production and hash rates; for the other coins 7 day average data was available.

Table 1: Top 8 Mined Coins (all mining pools, not just Top 50)

Coin	Hardware class	Algorithm	New coins / day	Hash Rate	Hash units	Price 5/30/2019 US$	Economic Production per Day, Million $	Extrapolated Annual Production Million $
Bitcoin	ASIC	SHA256	1800	47.1	Exa	8701	15.662	5,717
Ethereum	ASIC	Ethash	13,600	172	Tera	284	3.862	1,410
Litecoin	ASIC	Scrypt	14,825	352	Tera	117.6	1.743	636
Bitcoin Cash	ASIC	SHA256	1800	1.36	Exa	469	0.844	308
Zcash	ASIC	Equihash	7200	4	Giga	86.9	0.626	228
Bitcoin SV	ASIC	SHA256	1800	2.03	Peta	222	0.400	146
Dash	ASIC	X11	1693	1.68	Peta	172.2	0.292	107
Monero	GPU	CryptoNight	1934	329	Mega	95.1	0.184	67
Totals							23.61	8,619

 

From Table 1  above, which is across all pools, not just the Top 50, we see that total annual economic value run rate (extrapolated from the recent average daily values) is about $8.6 billion. About 2/3 of the economic value created is from Bitcoin production alone, with about $15 million produced per day recently. Ethereum amounts to around one-quarter of that at almost $4 million per day. The next six coins add another $4 million daily. Overall around $24 million per day is currently being mined from all pools.

The locations of top mining pools can be multi-country. The next Table summarizes the major host countries for the Top 50 pools; China, the US, and Hong Kong account for 70% of the top 50 pools and almost all of the top 10 operators. China alone is responsible for nearly half of the annual value produced by the Top 50 pools. The Mixed category includes various combinations of US, China, the EU, Russia, or other Asian or European countries. This category has grown as Chinese operators begin to move to other geographies, as a result of pressure from the government to constrain cryptocurrency mining in China.

Table 2: Host Countries, Top 50 Pools

Country	# Top Pools	Daily M$	Annual M$
China	18	10.717	3911.7
US	11	4.77	1742.5
Hong Kong	6	2.77	1009.6
Mixed	12	2.69	980.4
Other	3	1.18	430.0
Totals	50	22.12	8,074

Table 3: Top 10 Pool Operators (aggregated across coins)

MultiPools	Coins	Number	Daily M$	Annualized M$	Country
BTC(dot)com	BTC, BCH	2	3.06	1115	China
F2Pool	BTC, ETH, ZEC, BSV, LTC	5	2.76	1007	China
Antpool	BTC, LTC, ZEC, BCH, DASH	5	2.38	868	Hong Kong
Poolin	BTC, ZEC, LTC, BSV	4	2.26	825	China
SlushPool	BTC, ZEC	2	1.62	592	US
BTC.Top	BTC, LTC, BCH	3	1.47	537	China
ViaBTC	BTC, LTC,BCH	3	1.34	488	US
Huobi.Pool	BTC, ETH	2	0.69	251	China
NanoPool	ETH, XMR	2	0.50	182	US, EU, Asia
Bitcoin(dot)com	BTC, BCH	2	0.34	124	US
Totals		30	16.41	5,990

We have aggregated, for the top 10 operators, their results across all of the top eight coins, and summarized in Table 3 above. Some operators mine two different coins, others mine as many as five of the top eight. These pools account for, when broken out by coin, 30 of the entries in our Top 50 list. 

The #1 operator is BTC.com based in China, and it produces $3 million a day of economic value. F2Pool, Antpool, and Poolin each produce over $2 million of cryptocurrency per day. These  large operators are responsible for $6 billion of the $8 billion annual production by the top 50 pools. Three of the five largest operators are in China, one is in Hong Kong, and one is in the US.

The winners in this race, for this second list, are Bitcoin, naturally, with BTC.com again as the top pool, and China as the host country for the most top mining pools, including both #1 and #2 positions. Hong Kong has the #3 pool. The US has the second largest number of mining pools.

The economic value of mining has increased substantially. In the first list of November, 2018 we looked at the Top 30 pools, responsible for some $5.5 billion of annual run rate of mining. This new list of Top 50 pools indicates $8.1 billion of annual cryptocurrency creation (even the Top 30 for this list amounts to well over $7 billion).

We intend to update this list again in November, 2019. Suggestions and comments may be sent to: stephen.perrenod@orionx.net

A presentation with the full Top 50 list is available at SlideShare.net: 

https://www.slideshare.net/perrenod/top-cryptosupers-201906v1-149547256

References:

Overall: coinmarketcap.com, coinwarz.com, cryptoslate.com

BTC: btc.com 

ETH: btc.com, etherscan.io

BCH: btc.com, cash.coin.dance 

LTC, ZEC, XMR, DASH: miningpoolstats.stream

Cryptocurrency topics: orionx.net/blog