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Binance gets into the mining business

Updated: Aug 31, 2024
Published: Apr 1, 2020
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With April’s fools exchanges have used this opportunity to pass around jokes, like Bitfinex’s energy drink, but not Changpeng Zhao. The Binance CEO is serious about his business and announced via Twitter that Binance will be expanding into the mining sector.

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At the moment, Binance Finance offers staking, lending, savings and loans to users. This suite is turning Binance into a one-stop-shop, especially once they release Binance Mining.

Mining is a very competitive industry that is currently monopolized by whales and large mining pools. The 4th largest happens to belong to one of the main mining rig manufacturers: Bitmain, they currently produce over 10% of all Bitcoin blocks.

The mining industry is one that has adopted economies of scale, the larger the pool the higher its efficiency. Consequently, that means that smaller shops with lower efficiencies tend to be forced to close down when prices turn negative quick (March 2020) which gives out even more market share to the big boys. Binance, being the largest exchange by traded volume are able to enter this sector fearlessly to offer yet another product to their customers.

Recently Binance has been expanding at a very large rate. First their acquisition of the top Indian cryptocurrency exchange WazirX and now both their CMC acquisition for a whopping $400 million and their entry to the mining industry.

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