Chinese Mining Pool Poolin Acquires North American Competitor NovaBlock

BTC.com’s years-long first place position is threatened by rival bitcoin mining pool Poolin.

China-based mining pool Poolin, which contributes the second-largest amount of hash rate of any single entity on the Bitcoin network, has acquired NovaBlock, a North American pool with offices in St. Jose, California and Calgary, Canada. The takeover will net Poolin an additional 1,681.83  petahashes per second (PH/s) in mining capacity, per data from BTC.com, further increasing its hash power dominance.

In a recent announcement, NovaBlock, which launched in 2019, outlined the planned hash migration, which will take place today. According to BTC.com, Poolin manages a hash rate of 21,909.37 PH/s, so the addition could bring it up to around 23,591.2 PH/s. The world’s largest bitcoin mining pool would still be China-based F2Pool, which has a hash rate of 27,918.42 PH/s.

Poolin is headquartered in Hong Kong and has offices in Beijing, Chengdu and Changsha, China, as well as in Singapore and Berlin.

“I’m guessing Poolin forecasts there will be significant hash rate growth here in North America, and they want to position themselves to have exposure to it,” said Ryan Porter, BitOoda’s head of business development, in an interview with Bitcoin Magazine. “Prior to the acquisition, NovaBlock controlled 1 percent of the Bitcoin network hash rate. There is now a growing field of competitors entering the North American mining pool space, and a number of global mining pools that are expanding their product offering, so the acquisition puts NovaBlock into an incumbent that could keep them competitive and bring stability.”

In its announcement, NovaBlock noted that “Poolin is looking to expand their reach into growing regions like North America.”

As the bitcoin mining industry in North America continues to grow (the number of North American mining pools has more than doubled in the last year, growing from three to seven), it’s possible that more major pools in China will follow Poolin’s lead and look to acquire mining participants based in the U.S. and Canada.

There is growing recognition that U.S. regulators may be increasingly turning their attention to the mining space and the role of Chinese pools. Ethan Vera, co-founder and CFO of Seattle-based mining pool Luxor, told Bitcoin Magazine that miners may be looking for more accountability and stability than Asian pools have to offer.

“North American miners will increasingly want to sell their hash rate to a counterparty that is based in the same legal jurisdiction,” Vera said. “Service license agreements, legal recourse, high profitability and good data and stats are top of mind for institutional miners in 2021.”

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With some of its highest hash rates ever, the Bitcoin mining industry has weathered a harsh 2020 and increasingly moved away from China.

In a comment on Bitcointalk.org, a member called Newbie expressed a preference for working with a pool closer to home:

“I was going to try NovaBlock out later this year to see what the profit was going to be but now maybe not,” Newbie wrote on February 6, 2021. “I was mainly drawn to the concept of a North American pool with ownership and control centered in North America.”

With bitcoin reaching new all-time price highs, interest in mining is only bound to increase.