Boiling 2020: China's crypto mining industry has experienced great changes and joys. Next year, 600,000 new units may be added. The variable is Bitmain

Preface: 2020 was a boiling year. From the 312 crash to the new high of Bitcoin, from the DeFi craze to the launch of Filecoin. "One bull market can make 10 years of money", but some people also suffered contract losses and caused tragedies. As we usher in 2021 amidst the clamor, don't forget that the freedom of choice is ultimately in our own hands.

2020 was a year of great sorrow and great joy for the cryptocurrency mining industry.

In the first half of the year, mining machine factories first stopped production due to the epidemic; then came 312, the price of Bitcoin plummeted to US$3,000, and miners who borrowed money were liquidated one after another; after that, the output of Bitcoin was halved, and pessimism spread in the industry. Bitmain carried out pre-layoffs before the halving in an attempt to get through the winter smoothly.

Unexpectedly, the price of Bitcoin suddenly skyrocketed in the second half of the year, and now it has even exceeded 27,000 US dollars. Ethereum's handling fees also skyrocketed due to the DeFi craze, exceeding 700 US dollars. For a time, mining machine manufacturers and miners made a lot of money. Bitmain's 19 series futures have been sold until the end of 2021. Canaan and Shenma have also launched the latest mining machines, and futures are also in short supply. Although Ethereum has started the POS process, there are still more than 10 mining machine manufacturers manufacturing the latest mining machines. Referring to the undercurrent of Ethereum mining machines, is Bitmain E9 true or false? At least 10 companies are ready to enter the market

The mining industry chain is relatively simple, mainly consisting of mining machines, mining pools and mining farms, as well as a small number of financial products surrounding mining. We will mainly talk about the major players in each field.

1. Bitmain: Despite the heavy blows from forks, tape-outs, and internal fighting, Bitmain is still alive and well. The reason for the good performance in the past year is the great success of the 19 series and the efforts of Wu Jihan's team. But with the start of the big split, Bitmain will return to Zhan Ketuan, and the uncertainty in the coming year will increase, which will also add many new stories to the industry. Bitmain's big split starts: Zhan Ketuan returns, Wu Jihan exits with cash from B pool Xiaolu (Bitmain series 26)

2. Shenma: Shenma focuses on the field of Bitcoin mining machines. Under the leadership of Yang Zuoxing, it is very stable. His latest post on WeChat Moments seems to have gotten rid of the dispute with Bitmain. However, one wave of troubles has not yet subsided, and Ebang has miraculously obtained the Korean patent of Asicboost. The patent holder sued Shenma Samsung in Korea. It seems that it has not caused much impact so far.

By the way, Shenma was born by chance. In addition to the fact that the talented engineer Yang Zuoxing left because Zhan Ketuan refused to grant him equity, there was also a fork that led to overseas and domestic Bitcoin supporters supporting Shenma to fight against Bitmain. Shenma's position in the field of Bitcoin mining machines is difficult to be challenged, but it will not expand new businesses.

3. Canaan: Canaan had an internal dispute similar to Bitmain in 2020. Fortunately, they compromised quickly and the dispute was resolved smoothly. They finally produced a high-computing mining machine that could challenge the Shenma M30S. The stock price once soared three times, but it has fallen back recently. Compared with the relatively stable status of the previous two, 2021 is a more important year for Canaan, and more businesses will be laid out.

4. Chips: The core problem facing Bitcoin mining machines is the lack of production capacity of high-end process chips. Currently, high-end processes mainly come from TSMC, Samsung and SMIC. Due to the surge in demand in the audio and video, 5G and AI industries, high-end processes are being snatched up, and the instability of mining machine production capacity makes it impossible for conservative wafer fabs to provide more production capacity. It is estimated that the high-power mining machines manufactured by the high-end process capacity obtained by the entire industry next year will not exceed 1 million units, and the conservative estimate is 600,000 units . Bitmain may account for a higher proportion of them because it can obtain 7nm and 5nm production capacity at the same time.

5. Ethereum mining machine: In the field of Ethereum mining machines, a large number of AISC and graphics card mining machines will appear in 2021. However, on the one hand, mining machine factories actively control production, and on the other hand, graphics card production capacity is limited. Therefore, mining machines will be in short supply before the middle of next year. Unlike Bitcoin mining machines, there are great risks in purchasing Ethereum mining machines, and the risks come from the progress of POS. Once POW is officially abandoned, all Ethereum mining machines will basically become scrap metal. This also indicates that the life of Ethereum mining machines is only 1-2 years (some mining machines can mine small currencies but the benefits are incomparable), and the life of mainstream high-computing power Bitcoin mining machines may be 3-10 years.

6. Mining pool: The biggest change in the mining pool field in 2020 is that Binance began to invest in this field, and took advantage of the suspension of withdrawals from OKEx mining pool to seize the other party's market share. It is currently stable in the third position, and even came to the second place. The first-ranked F2Pool and the second-ranked CoinIn are not quite the same. F2Pool is relatively stable and conservative, while CoinIn is relatively aggressive in expanding its financial and mining business. CoinIn wallet responded quickly to the DeFi liquidity mining trend, with good product experience and security, and received a lot of deposits.

7. Mining farms: Domestically, the policies in Inner Mongolia and Yunnan are unstable, while Sichuan and Xinjiang are mining-friendly areas. The consumption of hydropower in Sichuan is advancing rapidly, and it may account for half of the overall electricity consumption of Sichuan mining farms during the flood season next year. Refer to http://www.haimanews.com/kuaixun/3747.html. However, due to the addition of a large number of mining farms, there is an oversupply of mining farm positions. Overseas, Kazakhstan has added a lot this year, and the mining farms in the United States are in short supply due to the large-scale purchase of mining machines by institutions.

Outlook: For the mining industry in 2021, if the price of Bitcoin continues to rise (a high probability event), the number of new high-computing mining machines (100T) will be about 600,000-1 million, and the new computing power will be about 600,000-1000,000. The mining farms are still in Sichuan, Xinjiang, the United States, Kazakhstan, Russia and other places. The overall computing power increased by about 300,000 in 2020, indicating that the shipment of new mining machines will be about 400,000-500,000.

The follow-up of Bitmain's split is still a variable. Zhan Ketuan is destined to mass-produce and sell various mining machines. Whether he will eventually earn a lot of money to accelerate the listing or drag himself down is still in doubt, but the overall computing power will be expanded, and manufacturers trying to make small-currency mining machines should be careful. After Wu Jihan's split mining pool cloud computing power is integrated with Matrixport, will he continue to invest in the mining layout, or will he completely devote himself to finance, or even avoid competing investments and make mining machines? Everything is unknown. And his influence will have an impact on the industry and competitors no matter what he does.

If Binance can rise to the top in the mining pool field, it will completely make mining pools dominated by exchanges.