Posted on

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.

Posted on

Japan: SBI Group Sets Up Spin-Off to Manufacture Crypto Mining Chips

SBI will consult with a mining electronics entrepreneur Adam Traidman after forming SBI Mining Chip Co., Ltd.

Japanese financial giant SBI Group has created a dedicated subsidiary that will manufacture cryptocurrency mining chips, the company confirmed in a notice on March 22.

SBI, which has launched spin-offs covering various aspects of the cryptocurrency industry, now says it wishes to expand its influence in the mining sector through the creation of SBI Mining Chip Co., Ltd. (SBIMC).

The company will join industry stalwart manufacturers, chief among which is Bitmain, which released its latest product this week.

“The SBI Group strongly promote [sic] on a wide range of businesses based on the digital asset, including cryptocurrency exchange business and other blockchain related businesses,” the notice reads, continuing:

“The Group has practiced its cryptocurrency mining business […] overseas and has now decided to expand its business scope to the manufacturing of mining chip itself and development of mining systems, through SBIMC.”

The latest project meanwhile will see guidance from Adam Traidman, a seasoned Silicon Valley entrepreneur in semiconductors and associated electronics.

“The SBI Group will promote efficient, reliable and sustainable mining operations to develop a sound and solid cryptocurrency market,” the notice promises.

To date, SBI had only mined crypto Bitcoin Cash (BCH) via its subsidiary, beginning and ending the practice last year after concerns arose.

In September 2018, Jihan Wu, co-founder Bitmain and head of the mining pool SBI was using, claimed that the company was seeking to subvert its operations to benefit Craig Wright, the notorious entrepreneur who became a central figure in Bitcoin Cash’s contentious hard fork two months later.

Posted on

Report: Bitmain Plans to Set Up 200,000 Crypto Mining Machines in China

Leading crypto mining hardware producer Bitmain is reportedly planning to install 200,000 units of mining equipment in China to benefit from cheap hydroelectric power.

Cryptocurrency mining giant Bitmain is reportedly planning to set up 200,000 units of mining equipment in China to benefit from low-cost hydroelectric power in the country, crypto media outlet CoinDesk reported on March 21.

A source from China familiar with the matter reportedly told CoinDesk that Bitmain will install 200,000 units of their own mining machines to take advantage of cheap hydroelectric power costs during the summer following the excessive rains in southwestern China. The mining equipment is estimated at around $80 million to $100 million.

The crypto mining giant has reportedly entered into negotiations and started making deals with local mining farms to host its equipment. According to the source, Bitmain is looking to deploy its new machines like AntMiner S11 and S15 along with some older models like the AntMiner S9i/j.

The news comes in the wake of Bitmain’s decision to close its development center in Israel and fire local employees last December, and to reduce its operations in the Netherlands in January. Gadi Glikberg, head of the Israeli branch and Bitmain vice president of international sales and marketing, ostensibly linked the closure to the recent crypto market collapse:

“The crypto market has undergone a shake-up in the past few months, which has forced Bitmain to examine its various activities around the globe and to refocus its business in accordance with the current situation.”

As for the closure of its operations in the Netherlands, Bitmain said that the move was part of its longer-term roadmap of cost-saving measures. Bitmail reportedly suffered as a result of decreased profitability of Bitcoin mining in recent months, with Bitcoin (BTC) currently circling $4,000.

Also in January, news broke that Bitmain had reportedly suspended its mining operations in Rockdale, in the United States state of Texas. Steve Young, a Milam County Judge, issued a statement reporting that all Bitmain employees but two engineers and the director of human relations had been laid off, and all operations had been suspended.

Posted on

Mining Giant Canaan Seals ‘Hundreds of Millions of Dollars’ in New Funding: Report

The mining giant has yet to confirm the news officially, which appeared in a Chinese finance newspaper.

Chinese cryptocurrency mining manufacturer Canaan Creative has completed a multimillion-dollar funding round, local finance news outlet Securities Times reported on March 11.

Canaan, which has not officially confirmed the report, is rumored to have raised an unspecified sum from as yet unknown backers.

The size of the investment, according to the Times, which cites “informed sources,” lies in the hundreds of million of dollars, while the company’s worth is reportedly now in the billions of dollars.

“From the point of view of market capitalization, after the current round of financing, Canaan’s valuation is worth billions of dollars,” the publication added, likewise without naming specific figures.

The cash injection comes at a timely juncture for the cryptocurrency mining industry. As Cointelegraph reported in November, the market, led by fellow Chinese stalwart Bitmain, has suffered considerably as a result of the ongoing Bitcoin (BTC) bear market.

Beginning last November, Bitmain began downsizing its operations, withdrawing from some areas and firing staff.

Both Bitmain and Canaan have so far attempted but failed to clinch an initial public offering (IPO) in Hong Kong, with reports subsequently revealing that Canaan could undergo the process in New York in Q2 2019.

Posted on

Bitcoin Mining Revenue Begins Slow Recovery After 18-Month Lows, New Report Shows

Diar finds that signs of recovery follow dips in mining revenue to their lowest since August 2017.

Bitcoin (BTC) mining revenues have begun climbing after falling to their lowest levels in 18 months, statistics from cryptocurrency industry newsletter Diar confirmed Mar. 4.

Capping a troubling year for miners, February saw revenue drop to amounts not seen since August 2017 — when Bitcoin was at the start of its most recent bull run.

Mining income totalled $195 million in February 2019, down from $210 million in January and a fraction of the $951 million all-time highs seen at the height of the bull run in December 2017.

“To make matters slightly more difficult, miners running optimal equipment and who have secured wholesale electricity prices have seen their gross margins squeezed requiring a massive deployment of hash power in order to stay afloat,” Diar added.

As Cointelegraph reported, the last two months of 2018 were not financially beneficial for miners. A sudden price downturn of around 50 percent in the crypto markets in mid-November sparked temporary chaos, with warnings from China’s mining community in particular that network performance would soon suffer.

The following month began seeing a return to form, difficulty adjusting to suit current conditions and subsequently retracing losses.

Diar confirmed the progress, also noting that gross margins for those running Bitmain’s Antminer S9 have improved versus a month ago.

Bitmain itself has meanwhile felt the impact of the market slowdown, with Cointelegraph reporting on a spate of downsizing moves which have entailed job losses and exits from some jurisdictions.

Associated companies with exposure to the mining sector, such as hardware manufacturer Nvidia, have also warned about revenue viability due to market turbulence.

Posted on

Nvidia Faces Class Action Lawsuit Over Losses After Diminished Mining GPU Demand

GPU producer Nvidia is facing a class action lawsuit over the losses reported by the company when demand for GPUs by miners diminished.

Graphics processing unit (GPU) producer Nvidia is facing a class action lawsuit over the losses reported by the company when lower crypto prices diminished demand for GPUs by miners. Schall law firm announced the lawsuit on Dec. 24.

The complaint states that “the Company made false and misleading statements to the market.” Namely, according to the announcement, Nvidia “touted its ability to monitor the cryptocurrency market and make rapid changes to its business as necessary.” Shall states that the GPU producer also declared:

“Any drop off in demand for its GPUs amongst cryptocurrency miners would not negatively impact the Company’s business because of strong demand for GPUs from the gaming market.”

As Cointelegraph recently reported, after the cryptocurrency mining crash, Nvidia was the worst reported performer in S&P 500. After a massive sell-off of its shares, the stock price of the company fell by 54 percent.

In mid-November, an analysis by Susquehanna — a United States -based global trading and technology firm — observed that mining Ethereum (ETH) using graphics processing units was no longer profitable.

In the Susquehanna analysis, the profit per month for GPU Ethereum miners hit $0 by Nov. 1, down from nearly $150 in July 2017.

Earlier this week, Japanese firm GMO Internet announced that they would be leaving the mining sector, citing extraordinary losses over the year.

Posted on

GMO Internet Exits Bitcoin Miner Production After Recording ‘Extraordinary Loss’ in Q4

The company said that tens of billions of yen in lost profits led it to the decision, which will also see it move its mining center.

Japanese internet giant GMO Internet Group is quitting the Bitcoin mining hardware sector, Cointelegraph Japan reported Dec. 25 referencing a public document.

Citing “extraordinary loss” in Q4 this year, GMO, which began its foray into Bitcoin mining in 2017, said that it will “no longer develop, manufacture and sell” miners.

“After taking into consideration changes in the current business environment, the Company expects that it is difficult to recover the carrying amounts of the in-house-mining-related business assets, and therefore, it has been decided to record an extraordinary loss,” the document reads.

GMO will further relocate its mining operation “to a region that will allow us to secure cleaner and less expensive power supply.”

The news makes GMO the latest casualty of the 2018 Bitcoin (BTC) bear market, with falling prices taking their toll on mining profitability.

As Cointelegraph reported, scenes from China showed mass dumping of hardware, followed by news of redundancies from major player Bitmain.

After closing down its Israeli operations, this week, new reports suggested that Bitmain was preparing to fire up to half of its 2500-strong workforce.

GMO’s consolidated losses for Q4 totalled 35.5 billion yen ($320 million), while the unconsolidated loss tally will be around 38 billion yen ($334.5 million).

The company said that the losses had not impacted its “financial integrity.”

Conversely, in November, the company had reported “historical” performance of its cryptocurrency projects in Q3, which included mining hardware sales. Profits had totalled 2.6 billion yen ($22.8 million).