Sparkpool and Beepool, the second-largest and fourth-largest Ethereum mining pool respectively have announced indefinite close down amid China’s crypto regulations. Sparkpool was the first to announce the closing down of its pool by September 30 in China’s Hangzhou city. Beepool took the same step and announced on Tuesday that all its operations is suspended. This decision has come in response to China’s decision to make crypto trading a punishable offense.
Although China has restricted the trading of cryptocurrencies, crypto owners in the country can still hold on to their crypto assets for now. Although many users have spoken against the decision, Sparkpool has supported its decision, stating it was the only way to ensure the crypto assets of Chinese users are safe on its servers.
For months, the mining crackdown has been aimed at Bitcoin (BTC) mining, which has resulted in a mass migration of mining companies from the country. In recent times, it seems that the Chinese government’s attention has moved from Bitcoin to Ethereum.
The decision by Sparkpool and Beepool to stop operations in China may have a negative impact on Ethereum’s hash rate, which is a key indicator of a crypto miner’s performance for the network’s security. More than a quarter of Ethereum’s hash rate is accounted for by BeePool and SparkPool combined.
With the Ethereum 2.0 launching soon, more mining equipment will become obsolete and miners isolated since the network is switching to the proof-of-stake. Until recently, the majority of the world’s Bitcoin miners were concentrated in China. The government has been tightening down on cryptocurrencies, though, and now appears to be focusing primarily on the environmental consequences of it. Many countries, notably China, Russia, and Morocco, are concerned about the large energy consumption and greenhouse gas emissions that come with mass crypto trading.