Binance may launch mining pool business in 2020

In an exclusive interview with Binance CEO Changpeng Zhao in Planet Daily today, Zhao Changpeng said that Binance, which has never been involved in the mining industry, is likely to launch its own mining pool this year, and bluntly said: 2020 will be a very interesting year.

The following is a forwarded interview about the mining pool:

Odaily Planet Daily: This year, many exchanges have transformed from a single business to a comprehensive trading platform that integrates spot, OTC, leverage, lending, futures and even options. There are still players entering the contract exchange track. Some people say that this is "drinking poison to quench thirst" and accelerating the draining of existing traffic. What do you think?

Changpeng Zhao: I don’t think so. In fact, the number of users is increasing, and there is no situation of draining out the existing traffic.

Trading is always a user demand, and it will not be squeezed out just because of the increase in products. After all, no business forces users to use it. Only when the product is valuable, has a market, and users have demand will they use it. Of course, it is not ruled out that some users are just following the trend, but this cannot deny the value of the product.

In general, comprehensive trading platforms are actually beneficial to users. However, it is also difficult to provide a platform with comprehensive services, which requires very high technology and operational standards. Binance has been doing this for more than two years before it gradually acquired these capabilities.

Odaily Planet Daily: This year, we have also found that the business of exchanges has become more and more extensive and connected, killing two birds with one stone (running mining pools and running nodes). What do you think of this phenomenon?

Changpeng Zhao: Currently, Binance does relatively little in terms of mining. We are also planning to launch our own mining pool in 2020, but it is not 100% confirmed yet.

I think exchanges have great advantages in operating mining pools. They can use their existing transaction fee business to support the development of mining pools. Some exchange mining pools are fee-free, which is very attractive to users. Users can directly store the coins they mine in the exchange, and can charge fees for future transactions.

However, we can also see that exchanges are doing better than POW mining pools in POS mining pools. This is mainly because POS is still relatively new and it is easier to pledge through exchanges; while POW mining pools have been developed and optimized for a long time, and the pattern has been formed, so it is indeed difficult for new mining pools to compete. But as time goes by, I believe the gap between POW mining pools will gradually narrow.

My judgment is that in the future, the leading exchange mining pools will be ahead of other mining pools.

Odaily Planet Daily: Many exchange mining pools have also issued mining pool coins. What do you think of this phenomenon?

Changpeng Zhao: If an exchange mining pool wants to issue coins, it must first consider its own business volume. It is logically reasonable for mining pools to issue coins as a user incentive. However, whether the coins issued by mining pools have sufficient liquidity and usage to support their prices is a big problem. If the mining pool's business volume is not large, the pressure to maintain the coin price will be great.

Secondly, I think it is not necessary for the exchange mining pool to issue coins. It is better for an ecosystem to share one coin. Let's take the problem to an extreme. Suppose the exchange has 100 sub-businesses. Is it better to issue 100 coins or share one coin? I think it is definitely better to have only one coin. Because the liquidity of this coin will be very good, more people will use it, and the network effect will be doubled. The value of this coin is far greater than the value of 100 coins. Although issuing a new coin sounds like there are many new ways to play, in fact the total value of the ecosystem is that big.

For example, Binance has acquired many companies before. Some companies issued coins before the acquisition, and we chose to keep them. However, for some companies that did not issue coins, we no longer issue coins, but let them use BNB. In the cryptocurrency ecosystem, we will definitely still promote BNB.