China’s Bitcoin ASIC has affirmed its manufacturing improvements and dominance
During the first month of 2020, Tokeninsight published its 25-page “Mining Industry Annual Research Report,” which covers the competitive bitcoin mining sector. Tokeninsight’s research points out the fact that Bitcoin hashrate increased by 80% in 2019, even though Bitcoin year-over-year average price dipped by 1.9%. The report also notes that more than 73% of the market share of ASIC mining hardware comes from China.
Tokeninsight is an independent organization that is created to provide accurate data, ratings, and analytics when it comes to the cryptocurrency ecosystem. The researchers have recently published the company’s annual mining industry report of 2019, and the firm’s predictive outlooks for certain aspects of the mining ecosystem in 2020. The report is based on public sources, data and information from industry heavyweights like Antpool, Viabtc, and Poolin as well. The study shows how BTC’s hashrate went over 100 exahash last year and continues to rise.
Overall of the report
The report indicates that the BTC’s yearly average hashrate increased sharply by more than 80% in 2019. Transaction fees on the BTC network were also lower and 2019 miners only accrued $160 million in fees, comparing to 2018’s $280 million. Tokeninsight compliment that single unit mining rigs produced by the world’s top ASIC manufacturers became much more efficient in comparison with 2018.
BTC’s network hashrate increased significantly, yearly average up 79.3% from 2018.
Tokeninsight’s report reads that the performance improvement of the mining hardware and the profitability of the Bitcoin mining segment are contributing factors. The average ROI of the mining industry is about 1 year, and the profitability is incomparable with the traditional industry.
The global bitcoin network hashrate distribution map. Source: Tokeninsight
Tokeninsight’s mining study stresses that China is the most dominant region of bitcoin miners. It reads that the Bitcoin network hashrate is mainly distributed in the following regions: China, the United States, Canada, Northern Europe, Russia, and Georgia.
Moreover, most of the electrical consumption used for mining are renewable energy sources, as 70% of the mining industry are renewables. Another discussion raised in the mining study is the future of BTC’s third halving in which the Bitcoin inflation rate will fall to ~ 1.7%, which is much lower than 4.8% – 6.2% (Gold) and 5% (M1) issue rate after the third halving.
The dominance of Chinese technology development
Other aspects from the report show that China takes over 73% of ASIC manufacturing worldwide, and the future of the cloud mining market is outside of China. By conducting several interviews and market surveys, the firm believes that it’s able to predict the market share of the top five ASIC manufacturers in 2020, including 63% market share of Bitmain’s, Microbt (10%) the second, Canaan (18%) the third, Ebang (7%) the fourth, and others (2%).
The report asserted that the distribution of SHA-256 ASIC mining hardware manufacturers is concentrated, and the top four manufacturers in 2019 accounted for more than 95% of the total market.
Tokeninsight says that the help of chip makers will strongly determine the success or failure of mining hardware manufacturers. And Samsung and Taiwan Semiconductor Manufacturing Company (TSMC) are the main suppliers of these chips. However, because companies like Apple and Samsung need the best chips for new smartphones, the next-generation chips will be limited.
At present, 5nm chips are already in the tape-out stage, and 5nm mining hardware may be released early next year. No matter what, even if it is TSMC’s 5nm, 7nm chips or Samsung’s 8nm chips, the chip supply will be a shortage, so mining hardware manufacturers have to compete with mobile phones for chips supply.
Tokeninsight predicts that in the future, mining pools will likely partner with independent third-party agencies due to its unwell structure. Right now, altcoins that do not apply the SHA-256 algorithm are still dominated by GPU and CPU miners mainly from Europe and the U.S.
The study’s 2020 prediction that mining pools will start integrating more types of altcoin mining and GPU/CPU to FPGA could be exploited by ASIC mining in the long run in the future. Tokeninsight hopes that cloud mining products will increase and reach a broader market in which mining farms located outside of China growing at a faster pace will be possible in 2020.
More than 70% of the mining industry leverages renewable energy.
Tokeninsight’s 2020 annual mining report shows the company believes comprehensive service providers dedicated to the mining industry will grow exponentially. Problems in the cryptocurrency mining industry have created a series of comprehensive mining service providers and they are trying to provide one-stop solutions for the industry.