Category Archives: ASICs

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Bitmain Targets Development in Revamped 2019 Business Model

Bitmain Targets Development in Revamped 2019 Business Model

Bitmain appears to be in the process of repositioning itself towards development to make 2019 a far more successful year after the disappointments and layoffs of 2018 as cryptocurrency mining came under pressure.

The Beijing mining giant recently referred to last year’s negatives and positives in its latest roundup, but now seems more focused on how to turn things around after rationalizing its business model, not only through the already much hinted administrative changes at the head of the company but also by targeting development. A company blog has recently clarified its direction in 2019, suggesting that:

“Our mission is to produce hardware and software, as part of our commitment to contribute towards the security and stability of a multitude of cryptocurrencies. We look forward to continuing this effort this year, and contributing to a distributed, decentralized world that empowers everyone.”

Bitmain’s recent blog post sees the cryptocurrency industry stabilizing this year, echoing many analysts’ suggestions that institutional investors will revitalize the markets, and clearly envisages a role for ASICs, simplifying cryptocurrencies in a way that encourages their adoption as both a useful and a usable asset.

The company is not alone in hoping that sensible regulation will lead to greater adoption of crypto finance, although such moves will clearly have to wait in the US, where the SEC is running a skeleton staff due to the prolonged government shutdown.

According to the blog, now that the company has undergone significant staff cuts, there is a feeling at the top that a new leaner operation will support Bitmain’s aim to build a more sustainable and scalable business, and suggests that “part of that is having to really focus on things that are core to that mission and not things that are auxiliary”.

Time will indeed tell if consolidated focus and renewed energy in a scaled down company does make 2019 Bitmain’s year of development.

 

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Ads for Used Rigs Up 25% as Russian Mining Takes a Hit

As Bitcoin tumbled to new lows on cryptocurrency exchanges last week, Russia saw a significant rise in the number of second-hand mining rigs available for sale.

Online Russian marketplace Youla reported a 24% increase of used rig sales in that week, indicating that many of the country’s amateur cryptocurrency miners where ceasing their mining activities and liquidating hardware to recoup losses.

Another disturbing fact for Russian investors looking for indications of a future lift in market fortunes is the number of searches online for video cards which Youla suggests have dropped by 25% on its own platform.

Clearly, the profitability of mining due to the direction of the market, again a reflection of Bitcoin’s current low value, is impacting on the sales mining equipment and GPUs. However, Youla has noticed an increase in searches for specialized equipment such as ASICs-based rigs which are suited to mining cryptocurrencies that require more hashing power.

The fall in the value of cryptocurrencies has consequently affected hardware pricing, with rigs that might have sold for USD 3,500 in January now achieving prices some 37.5% less as demand falls. Although small-scale mining by amateur miners is clearly being hit hard, companies are developing more financially viable ways of operating.

Crypto mining in Russia is becoming a big industry on an individual level but more importantly for the government, at an industrial scale also. This is now driving operators towards locally run Russian mining pools. A majority of these larger facilities currently work with Western and Asian mining pools, increasing the need for Russian firms to work within the restriction imposed by overseas pools often including prohibitive tax regulations.

Russia has become popular with overseas companies due to its low energy costs, with another recent drop in electricity rates recently from RUB 5-7 rubles (USD 0.075-0.125) to 4-5 rubles (USD 0.06-0.075) per kW in the last year. Prices are half that amount in some areas, making the country one of the cheapest in the world for energy.

 

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