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Report: Bitmain to Launch 200,000 Crypto Mining Rigs in China

Bitmain Bitcoin Mining China 2019

According to a report published by CoinDesk on Mazar. 21, cryptocurrency mining conglomerate Bitmain is looking to launch up to 200,000 new mining rigs in China, at a conservatively estimated cost of $80 million.

The move will allow Bitmain to take advantage of the relatively cheap hydroelectric power in China during the summer of 2019, with CoinDesk also reporting that the expensive deployment of equipment may end up being more cost-effective for the company than outright selling their inventory. CoinDesk also reports that the decision by CoinDesk is positive for the industry and miners, sending a signal of a “broader shift in the market, with miners preparing to invest again following last year’s contraction in capacity.”

Bitmain, which holds the distinction of being the largest manufacturer of cryptocurrency mining equipment by market share, can take advantage of the excess hydropower in China’s southwestern province for cheap mining costs relative to the broader market. According to sources in the region familiar with the situation, Bitmain has “already started discussions and making deals with farms to host its equipment so that it can be fully prepared.”

The report also includes information that Bitmain will be primarily deploying its newer model mining rigs, the AntMiner S11 and S15, which retail for around $500 and $1000, respectively, per unit. It is also unclear according to the sources which proof-of-work cryptocurrency Bitmain will be targeting to mine for. As CoinDesk points out, even at $80 million in projected costs to deploy the equipment in the new region, the move represents a “non-negotiable opportunity cost” considering Bitmain’s primary revenue source is from mining equipment sales as opposed to actual mining.

However, the company is caught in a difficult position due to the ongoing bear market that has extended into the beginning of 2019. While the company could attempt to selloff the bulk of their 200,000 intended units for deployment, the marginal profits that could be made from mining in the presence of cheaper electricity may provide the better sunk cost. CoinDesk calculates that, using conservative estimates, Bitmain may be able to secure a monthly profit of $7.7 million.

CoinDesk also reports that Bitmain’s scaling up in mining operations could send a strong signal to the broader market, particularly as cryptocurrency mining and coins prices continue to linger at relative lows. Estimated reports found that over 600,000 Bitcoin miners shut down operation in 2018 due to the falling con prices no longer proving profitable relative to mining costs, leading to the market being flooded with second-hand rigs being sold at a discount.

Despite the decline, Bitmain and other miners deploying to China in the upcoming wet season to take advantage of excess hydroelectric power could bring about a sharp increase in Bitcoin’s hash rate, with some estimates putting it at 70 quintillion hashes per second (EH/s), well above the all time network high of 60 EH/s.

Renewed mining interest in conjunction with building crypto adoption that has already started in 2019 could lead to a reversal in both coin prices and increased competition to capitalize on the market while prices are still depressed. With increased mining competition for Bitcoin, the selling price for newly minted coins should also rise, which could have a broader effect on BTC pricing.

The post Report: Bitmain to Launch 200,000 Crypto Mining Rigs in China appeared first on Ethereum World News.

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Former Beverage Company Turned Bitcoin Miner Eyes Customer Loyalty Market

Cryptocurrency–The tale of Long Blockchain Corp. continues to grow in and outside of the crypto space.

Originally branded as Long Island Iced Tea, the former beverage company made an abrupt turn in early January when it was announced that the company would be pursuing Bitcoin mining operations. Preceding the shift in focus to crypto mining, the company rebranded from the aforementioned drink title to Long Blockchain Corp, which brought about a tailwind in the stock price as shares rose 500 percent. Critics of Long Blockchain Corp. have accused the company of capitalizing on the blockchain craze, particularly as it reached a pinnacle in late December/early January, similar to the investing-with-abandon approach that plagued the dot-com era.

Now the company has returned to the headlines, announcing that it will be changing gears once again to tackle the market of customer loyalty. In part due to the the falling price of Bitcoin and declining profitability in crypto mining, LBCC has made the pivot away from the short-lived venture into cryptocurrency. In February, the company received a delist notice from Nasdaq related to the companies low market capitalization, with an appeal that took place in March. Beginning April 12, LBCC was formally removed from the stock exchange, leading some to question the original shift into the crypto mining industry. In addition, the company was one of several to spark a remark from SEC Chairman Jay Clayton in January, when he commented on the sudden phenomenon of companies adding blockchain to their title and reaping capital rewards despite little additional input.

In addition to the current CEO of Long Blockchain Corp. stepping down, the company has outlined a plan to run the loyalty operation through a subsidiary named Stran Loyalty Group. Freshly minted CEO Andy Shape spoke in the press release on the evolving market of customer relations, and how they intend to combine technology with loyalty programs to provide innovation to the industry,

“Consumer brands and corporations realize that loyal customers not only purchase more goods but that they also purchase more often. Creating stronger loyalty with customers who are engaged in loyalty programs through advancements in technology is the key to future growth and massive scalability.”

The company has not fully denounced itself from cryptocurrency, keying in on a previously mentioned design of “distributed ledger technology” as a way to gain advantage over competitors,

“The Company’s goal is to use the initial loyalty business as a catalyst to implement disruptive technology solutions, including distributed ledger technology, into the loyalty industry while realizing immediate revenue and credibility from traditional loyalty contracts,”

In addition, the press release appears to leave room for a potential exit and/or pivot to a different venture, again, by stating that the company cannot guarantee profitability through their current endeavor,

“There can be no assurance that the Company will be successful in developing such technology, or in profitably commercializing it, if developed.”

While Long Blockchain Corp. failed to make a significant impact on the world of Bitcoin or cryptocurrency mining, it may serve as an example for other companies looking to pivot into the space of cryptocurrency.