The "mining pool giant" obtained blockchain service registration, which caused controversy. Previously, many mining pools had completed the registration.

Source: Securities Daily

Author: Xing Meng

On October 30, the Cyberspace Administration of China released the fourth batch of domestic blockchain information service registration lists, including 285 services. Once the list was released, it caused widespread discussion in the industry. Unlike the previous focus on the top traditional companies in the blockchain circle, the "CoinIn Mining Pool" in the mining circle that was on the list this time caused quite a stir.

As one of the largest Bitcoin mining pools in the world, the Bitcoin computing power controlled by the Biyin Mining Pool cannot be underestimated. It is precisely because of its reputation that the Biyin Mining Pool's registration has attracted attention from the industry. The entry of the "giant" has also caused the voice of "legalization of mining" to spread in the industry.

It is worth noting that the filing of mining pool services should not be over-interpreted and does not mean that the regulatory authorities have recognized it. Some industry experts said that although the country has not explicitly banned mining pool business, the filing of mining pool services is only a registration, not an administrative license.

All three batches of blockchain registrations have mining pool-related services

Yu Weiren, president of Gyro Research Institute and vice president of Shenzhen Information Service Industry Blockchain Association, explained to the Securities Daily reporter that a mining pool is a method of combining small amounts of computing power for joint operation. In this mechanism, miners are gathered through the mining pool protocol, and the mining hardware remains connected to the mining pool server, so that they can jointly carry out mining operations and distribute the mining proceeds according to the computing power.

Before the Biyin mining pool, the names of mining pools had appeared in the registration lists of previous batches.

The Securities Daily reporter sorted out public information and found that in the second batch of domestic blockchain information service filing lists, three mining pool services, namely "Bee Mining Pool", "Elephant Mining Pool" and "Mining Pool Service", appeared. The main companies that applied for them were Wuhan Qukuai Technology Co., Ltd., Shanghai Songhua Information Technology Co., Ltd., and Hangzhou Yuanjing Internet Technology Co., Ltd. In the third batch of domestic blockchain information service filing lists, the "BTC/BSV Mining Pool Service" service applied for by Fuzhou Boquan Network Technology Co., Ltd. was listed.

It can be seen that mining pool-related services are listed in the second, third and fourth batches of blockchain filings. However, due to the lack of reputation of the relevant mining pools, the inclusion of the first two batches of mining pools in the list did not attract much attention in the industry.

In this regard, Li Lianxuan, chief researcher of OKLink Research Institute, told the Securities Daily reporter that the size of computing power directly determines the size of the voice in the Bitcoin network, so these mining pools have a great voice in the entire Bitcoin ecosystem.

Regarding the registration approval of the Biyin mining pool, Yu Weiren believes that, in essence, the mining pool is similar to an emerging financial technology used in virtual digital currency transactions. Its main purpose is to provide technical services to transaction participants, miners. The mining pool has been repeatedly approved for registration based on this reason.

Mining pool blockchain service filing is only a registration

The registration of the Biyin mining pool will put the mining pool business that is outside the supervision into the forefront.

“Our country’s policy on mining pool business (mining) is not to encourage it, but there are no laws or administrative regulations prohibiting citizens from mining.”

Ding Feipeng, director of the criminal department of Beijing Luning Law Firm, told the Securities Daily reporter that the filing of mining pool business is the regulatory authority's obligation to fulfill the "Blockchain Information Service Management Regulations". Filing is not an administrative license, nor does it represent the attitude of the filing authority, it is just a registration.

Li Lianxuan believes that according to the requirements of the "Blockchain Information Service Management Regulations", blockchain information service providers should indicate their registration numbers in prominent locations on their websites and applications that provide services to the outside world. Registration is only a registration of the relevant circumstances of the subject's blockchain information service, and does not represent the recognition of its organization, products and services. No organization or individual may use it for any commercial purpose. Therefore, the fact that a mining pool has been registered does not mean that the industry is completely legal.

Cryptocurrency mining has always been controversial in my country. On April 8, 2019, the National Development and Reform Commission issued the "Guidelines for Industrial Structure Adjustment (2019, Draft for Comments)", which listed virtual currency "mining" as an industry to be eliminated, but this item was deleted when the directory was officially released.

In this regard, Li Lianxuan said that this shows that domestic companies engaged in mining services can engage in legitimate operations as long as they comply with local land, environmental, electricity and taxation policies. However, the special feature of mining pool services is that some of the settlement methods of mining pools may have legal risks of illegal fundraising or illegal absorption of public deposits.