The next race of Bitcoin miners. How price hikes affect the industry?

In recent weeks in China cost of used equipment for the mining of cryptocurrencies has almost doubled. The reason for this clearly made the jump rate of the Bitcoin. Thanks to bullrun, which began in early April, the use of ASIC has become more profitable. Understand the situation in more detail.

According to a blockchain analysis company TokenInsight, 8 APR investment in most types of mining equipment was paid off in 200-350 days. The indicator is considered by dividing the price of the miner on a daily profit. However, the growth of BTC from 4,000 to more than $ 6,000 has resulted in a reduction of the payback period for some second-hand models for up to 200 days and less.

Analyst mining industry of TokenInsight Michael Jung commented as follows.

When the payback period dropped to less than 200 days, many miners saw new opportunities. It stimulates their demand for the purchase of used models, which leads to a jump in prices. Therefore, there is a high probability that soon the payback period will increase again.

These market changes have had an impact on business, and Darius Sharif Samani among them. He is an independent miner, which owns a rig in China and acts as an intermediary in the sale of equipment. As Samani told CoinDesk in March, he managed to buy “beushnye” Antminer S9 for $ 140. Hasrat this device from mining giant Bitmain is 13.5 teruhisa per second.

Since then, the price has jumped above $ 250, and upgraded version of the S9 Antminer that generates 14,5 TH/s is even more expensive — $ 280. Sometimes the price tag reaches $ 320. If prices continue to rise, the purchase of equipment for the majority may become unacceptable. Review Samani is.

Aside from a couple of farms with good financing, no one will buy new hardware and spend $ 23 for teraherz.

The contents

Not available or stockpiled for later?

Some wholesalers equipment for mining even claim that certain models are sold out. While Samani doubt that it’s true.

Long ago, I did not say that model sold out. Probably just waiting until the race starts the prices and everything will start to sell stocks.

Jun from TokenInsight shares these sentiments and adds that wholesale sellers and traders of used equipment tend to hold large stocks of devices.

Market expansion

Source: 2Биткоина

In addition to the latest price spikes Bitcoin, another factor in the growth of demand for the equipment can be of rapid onset of rainy season in China. During this period, the cost of electricity is reduced. Operators mining-farms in South-Eastern China predict that in summer, the region will work more than a million installations. It can cause a leap Hasrat network Bitcoin to 70 quintillion hashes per second.

It will be a new historical high. According to Blockchain.info the previous record was set in August last year – 60 aksaka per second. If an additional 10 EH/s will fall solely on the new models like the Antminer S17, which generate around 45 TH/s, then in the coming months, the network must receive 220 thousand new miners. However, this forecast is relevant only for stable Bitcoin prices.

But if all that power will come from the older models – Antminer S9 with the power of 14 TH/s, then the number of new machines on the network can reach 700 thousand units. At the moment, the total computational power of the largest market capitalization of cryptocurrency is on the order of 50 CS/s.

Supply and demand

According to co-founder of the Chinese cryptocurrency mining pool Poolin Chris Zhu, another catalyst of growth in demand for used equipment — the inflow of capital from beginners. This year it is expected a large number of new capital from those who do not mainil cryptocurrency during a bear market. They are much less cautious in terms of risk. One of the new players – mining-Fund of 44.5 million dollars from the Shanghai firms blockchain-investments Fundamental Labs. In anticipation of the summer she relies on the creation and maintenance of mining-farms.

Like Zhu, the founder of the Fundamental Labs Raymond yuan admits that this year farms will be more than available upon equipment on the market. As noted by Zhu, the world is becoming more so-called “farm futures”, the organizers of which attract customers before the start of construction of the trusses themselves.

These players hope to first collect the customers money and equipment as start-up capital to build infrastructure. This strategy is very unreliable, because they promise to build something out of nothing.

Yuan of Fundamental Labs also shared his opinion on this matter.

Operators mining-farms may overestimate the attractiveness of the rainy season, so that the total supply of seats available for equipment for mining farms exceeds the total supply of machinery for mining.

New models of miners

Source: 2Биткоина

While the major manufacturers of equipment for mining this year released a more powerful model, few of them managed to bulk delivery of ready products. For example, Bitewei (or MicroBT in the English-speaking area) in April released WhatsMiner M20S with the power of 70 Thes/s with a consumption of only 48 watts of electricity to the hash.

Founder MicroBT Sosin Yang told CoinDesk that 1000-2000 of these devices will be available for delivery in may. Orders more than 10 thousand units will have to wait until the end of summer. Similarly, the miners who bought the newest model InnoSilicon T3 with the computing capacity of 43 TH/s, will have to wait for supplies until June.

Bitmain recently introduced the Antminer flagship S17 and S17 Pro. The first shipment is scheduled for late may, although it is completely sold out. Apparently, Bitmain also holds some of their products S17, as on the website of the company advertised selling computing power of these machines through contracts for cloud mining.

Also read: Bitmain has revealed characteristics Antminer S17 and S17 Pro. What will be the new ASIC?

But no matter how powerful it may seem, these new machines, their payback period is still longer than the used devices. Especially considering their higher cost and lower cost of Bitcoin in comparison with a bull market in 2017. In conclusion, Jung notes the following.

Manufacturers of miners also rely heavily on the price of BTC, making decisions about scale of production. If the price of Bitcoin will not be able to stay above $ 8,000, manufacturers of mining equipment are unlikely to produce large quantities of new models.

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