Bitcoin mining in 2021: Chinese ban changed the balance of power

The ban on mining in China brought the United States to the first place on the Heshrait Bitcoin, the income of miners set new records, but at the same time, the industry encountered a shortage of semiconductors. We remember what 2021 was remembered for the mining sector.

Key

• China banned mining and lost the US Championship.
• Producers of mining equipment reported on record income, but their work is affected by the global deficiency of chips.
• A new player appeared on the map of the world – Salvador began to extract digital gold, but not everyone supported the use of geothermal energy sources.

China banned mining

At the end of May, the Deputy Prime Minister of the State Council of the PRC Li Hae announced the intention of the authorities to take measures to mining cryptocurrencies and trade in bitcoin. He called on the regulators to promote the real economy and establish more stringent supervision of the crypto industry.

For the first time, an official of such a high level directly proposed to ban the production of cryptocurrencies directly. Ecology could become a decisive factor – they plan to achieve carbon neutrality in Beijing by 2060. For China, this is more than an ambitious goal.

According to one of the studies from April, mining farms located on the territory of China on the horizon for three years could get ahead of the Philippines in terms of greenhouse gas emissions. Scientists argued that the industry would be released in 10th place in terms of energy consumption and emissions of carbon dioxide, leaving behind the largest Chinese cities and a number of leading regions of industry, including the production of electronics.

“Mining is nowhere to be taken into account as a separate source of carbon dioxide, which complicates the assessment of its influence on the carbon budget of the PRC. Politicians should solve this problem in the very near future, ”the researchers said then.

They proposed limiting the production of bitcoin at least in those regions where coal TPPs are the main source of electricity .

After the statement of Liu He, the topic of the official information agency of the Sinhua government was picked up, releasing the material with criticism of bitcoin and mining. The first reaction of the industry players appeared – according to the media, the BTC pool.TOP and HashCow Bitcoin mining Bitcoin for the benefit of stopping activities in China.

Then there were signs of the migration of the hashReit outside the country.

During the same period, other countries have seriously increased their shares. In Kazakhstan, it increased from 7.4% to 18.1%, and in Canada – from 4.7% to 9.6%.

The figure of Russia in relative expression added less – from 7.2% to 11.2%, but the country retained the third line in the ranking.

CCAF researchers noted that China’s dominance ended before the beginning of open repressions against mining. Already in March, his hashrate for the first time amounted to less than half of the general.

Kazakhstan against the background of the influx of miners began to experience a shortage of electricity, and by the end of the year industry players began to leave the country.

In November, the Foundry USA pool for a while went to the leaders in the hashReit. In the moment, his share reached 21%.

The emergence of a large number of companies traded on the exchange in the industry or striving to get into listing has become one of the consequences of mining in North America.

The status of a public company facilitates the involvement of financing, including from institutional investors. For example, the American Marathon Digital Holdings received at NASDAQ at the beginning of the year received $ 250 million by selling shares. In November, the company placed convertible bonds with a nominal value of $ 500 million. Lakes in the company are owned by such investment giants as Fidelity Investments, Vanguard Group and BlackRock.

Investments were actively attracted by private miners. In July, Genesis Digital Assets received $ 125 million in the form of joint -stock capital, and in September attracted another $ 431 million. Griid received a renewable loan of $ 525 million from Blockchain.Com.

Some experts are sure that the migration in the US has made mining more environmentally friendly.

Elon Musk revived the ecological discussion around mining

At the beginning of the year, researchers from CCAF reported that the annual energy consumption of digital gold mining reached 121.36 TVTHF, surpassing Argentina’s indicator. Since the end of 2015, the indicator has increased 66 times.

Bitcoin critics constantly indicate that the generation of electricity for mining leads to an increase in greenhouse gas emissions, contributing to global warming. Cryptocurrency supporters believe that the network uses renewable energy in many respects, and its influence on the ecology is exaggerated.

At the same time, according to the non -profit organization of the National Bureau of Economic Research from the United States, 10% of the largest miners control 90% mining capacities, and 0.1% (about 50 companies) account for 50% of the hash.

Such consolidation has systemic risks, since theoretically allows the organization of attack 51%. When the Bitcoin price falls, the power concentration tends to increase, experts added.

Mining equipment manufacturers reported on record sales

According to the results of the third quarter, Canaan announced the record revenue of $ 204.5 million. A year by the year, the growth of the indicator amounted to 708.2%, and in relation to the previous quarter grew by 21.8%.

According to the results of 2020, the manufacturer of mining equipment recorded a loss worth $ 33 million. But already in three months of 2021 he received a profit of $ 72.5 million.

The company also reported on cash reserves in the amount of $ 263.2 million – their volume has increased by more than three times from the beginning of the year, mainly due to customer advances.

EBANG received $ 18.3 million income in the first six months of the fiscal year – plus 65.7% a year by the year. The loss for the period decreased from $ 6.96 million to $ 4.26 million.

Microbt and Bitmain did not disclose financial results. Among the known large sales in the latter:

and 24,000 units Antminer S19J – The9 Ltd; – Riot Blockchain; line s19j – Core Scientific; – Marathon Digital Holdings; – Greenidge Generation;
• Order for $ 650 million (~ 55 000 S19J Pro, based on the spa price) – Phoenix Technology Consultants.

Bitfarms bought 48,000 miners from Microbt with a supply schedule from January to December 2022, and Core Scientific complemented the park 6000 devices from Canaan.

Of large manufacturers, only Bitmain presented a new model of bitcoin major during the year.

Antminer S19XP is built on the basis of 5-nm chips, has a computing power of 140 Th/S with energy efficiency of 21.5 J/TH. The current flagship S19J Pro has 110 Th/S and 29.5 J/Th, respectively. Presumably, the start of S19XP supplies is expected from July to September 2022.

Pandemia provoked a logistics crisis and chip deficiency

In the fall, the supply of deliveries due to the global crisis in logistics was reported by American companies waiting for large batches of equipment. Riot Blockchain called the problems “insignificant”, however, Marathon Digital admitted that they resorted to air transportation for the delivery of devices.

Experts also drew attention to the deficit of the chips, which arose due to a decrease in production volumes and changes in the supply schedule during the pandemic period. The lack of semiconductors influenced the manufacturers of miners.

Experts suggest that the deficit will remain in 2022, which will affect the supply of equipment and its prices.

Meanwhile, non-core companies also announced plans for the production of bitcoin production devices, such as Square’s payment company Jack Dorsie and working in the field of marine logistics Sino-Global Shipping America.

Against the background of the popularity of mining, more and more companies from other spheres were included in the industry. In January, the quotes of Chinese The9 traded on the NASDAQ took off by 140% after the announcement. Following the plans to engage in cryptocurrency mining, public companies Urban Tea and Powerbridge Technologies unveiled, and the Japanese financial conglomerate SBI Holdings announced the launch of a mining pool.

The authorities of some countries showed interest in the industry. The Government of the Haiber-Pakhtunchi province in Pakistan decided to create two enterprises for Bitcoin mining.

Salvador began volcanic mining

After the legalization of Bitcoin in October, the Salvador authorities launched a minig farm at a geothermal power plant near the Tekapa volcano. It installed 300 devices on it.

President Nyb Bookel proposed the production of the first cryptocurrency on environmentally friendly volcanic energy on June 10. Then he announced plans to attract cheap electricity to the country.

Salvador imports from a quarter to a third of the electricity consumed, and tariffs for both the population and for business are higher. In addition, miners prefer to have farms in a cooler climate, Хакер, взломавший and Salvador is in the tropics.

Experts agreed that geothermal energy in the country has prospects, but its development will require years and millions of investments. At the same time, the environmental friendliness of volcanic energy caused questions – drilling wells for access to underground heat can damage the aquifers, which in Salvador deficiency.

conclusions

Most likely, the influx of miners in the United States will continue – there are sufficient capacities in low tariffs and suitable climatic zones. Market players are actively building infrastructure, and the instructiveization of the industry helps to attract investments and the loyal ratio of regulators.

For Western companies, the observance of sustainable development principles (ESG) is important, which has already improved the environmental friendliness of mining. This trend will remain, given the goals of many countries in carbon neutrality.

Bitmain escaped forward in the technological race of manufacturers, but the deficit of the chips and the possible continuation of the crisis in global logistics affect the duration of the supply. Competitors who also have to catch up with the leader in terms of energy efficiency of devices also suffer from the same.

Given the high demand for equipment from North American companies, the emergence of new manufacturers, primarily in the United States.