The price of coins hit a new high, but now there is a shortage of electricity and mining machines

The price of the currency hit a new high, but the mining difficulty fluctuated slightly

The recent record high in Bitcoin prices has attracted many people's attention to the mining industry. However, in terms of the adjustment of Bitcoin mining computing power and difficulty, except for the 8% increase in difficulty on November 19, the mining difficulty has fluctuated slightly until now. The small increase in mining difficulty indicates that the increase in mining machines in the market is not large. What is the reason for this?

1. Shortage of mining machines caused by electronic components

Generally speaking, mining machine companies will release new mining machines every year, and this year is no exception. In addition to Bitmain's Ant S19 series, mining machine manufacturers such as Shenma have launched mining machines with lower energy efficiency ratios. Although it is said that after the new mining machines come out, they will be distributed on a large scale, but in fact, except for Bitmain's Ant S19 series, other mining machines have not been shipped in large quantities, mainly due to the shortage of core electronic components.

We have seen that the Ant S19 series of mining machines were released relatively early this year . Even now, they are very competitive in terms of energy efficiency. Therefore, they have had an obvious impact on other mining machine brands. At the same time, a large number of miners have been booking S19 series mining machines in the first half of the year. Although the Bitmain incident has had a certain impact, it does not seem to be a big problem at present.

Other mining machine brands either have a lower cost-performance ratio than S19, or the research and development of new products is still in an immature stage, which has resulted in relatively small shipments of other mining machines.

That is to say, the current shipment volume of Ant S19 is still acceptable. On the other hand, the main reason for the shortage of other mining machines is the shortage of electronic components. Due to the new crown pneumonia, some foreign electronic component manufacturers have not started work enough in recent years and their production capacity has not been increased. These electronic components will have an impact in all walks of life, especially those with high requirements for long life.

We all know that electronic components have a certain lifespan. The higher the grade, the more expensive it is. Mining machines have very high requirements for lifespan due to continuous work. Although there are some electronic components that meet the requirements supplied domestically, there are still some that need to be imported from foreign manufacturers. This naturally causes a shortage of these long-life electronic components.

As for ordinary civilian electrical appliances, since their requirements are relatively low, there is basically not much gap in this part of electronic components, which means that high-end electronic components are in short supply. Another reason for the shortage is that long-life electronic components are generally used in key fields such as military, aerospace, and heavy industry, which do not pay too much attention to the cost of electronic components. However, mining machines need to pay attention to cost, which is also one of the reasons for the shortage of production capacity.

In addition, for the chip industry, some mining machine companies use the production capacity of SMIC, which will be affected by US sanctions at the end of the year. Samsung and TSMC's orders have always been full, so this is naturally a lot of pressure on mining machine companies, and the latest mining machines may be shipped more slowly.

2. Domestic power shortage

The shortage of electronic components may not be the main reason. After all, there are always alternative solutions. However, for mining, the most important thing is the supply of electricity. This is the core. Unfortunately, this winter, there was a power shortage in some parts of the country, which may cause a shortage of electricity supply.

At present, the main areas of power shortage are Zhejiang, Hunan, Jiangxi and other places. The main reasons for the power shortage in the south are currently three factors:

( 1) Trade friction between China and Australia, rising coal prices

Simply put, the country is no longer allowed to import Australian coal. As a result, the coal used in the south for heating with electricity cannot be used. Thermal power is generally concentrated in the northern region. In the past, in addition to supplying local electricity, part of the thermal power generated in the north was transported to the southern region for power supply. However, since Australian coal cannot come in, the recent coal price has risen sharply, which has also caused a shortage of electricity.

Domestic issues on trade friction between China and Australia

China News Network reported that the domestic coal transaction price was more than 500 yuan, but on December 17, the warehouse price had risen to around 800 yuan.

However, after checking relevant information, we learned that Australian coal actually accounts for about 3% of China's total annual coal consumption, which means that this proportion is very small. Moreover, after stopping imports of Australian coal, China has also stepped up imports of coal from neighboring countries. In other words, the coal shortage is not actually particularly serious. The coal problem is not actually the main cause of the electricity shortage, but it also has a certain impact.

(2) Energy shortages are emerging around the world

Digital currency mining is not just a Chinese thing. Similarly, this year's cold climate is not just a Chinese thing. Not only Russia, but also European countries, the United States and other places are currently experiencing a cold winter. For each region, the power supply will be more or less affected, especially in the event of another outbreak of the new coronavirus at the end of this year.

The COVID-19 pandemic has led to insufficient work and energy shortages in both the United States and Europe, resulting in a corresponding electricity shortage in the winter. This is the same as the electricity surplus in the first half of the year. Relatively speaking, mining activities will naturally be affected to a certain extent. At least, areas with surplus electricity are unlikely to see new mining activities, and power dispatch across the country is also ongoing.

(3) Electricity consumption of new energy vehicles

In recent years, the government's subsidies for new energy vehicles have led to a gradual increase in new energy vehicles. This will naturally cause a large number of people who used to use fuel vehicles to switch to new energy vehicles. The biggest change is that they are now using electricity. Fuel-fired power generation is almost non-existent in the industry and is only used for a small number of backup power generation. Therefore, the increased electricity demand can only be replaced by hydropower or coal-fired power generation, which will naturally increase electricity consumption.

(4) As the climate gets colder, Russia cuts off power when supplying electricity to China

In addition to the trade frictions between China and Australia, there is a piece of news circulating online that because the climate in Russia is particularly cold this year, Russia has cut off the supply of electricity to China. It just so happens that the areas that use Russian electricity are concentrated in the south, which naturally caused power shortages in the country.

Because the main heating method in the north of China is coal burning, while the main heating method in the south is electricity, the power demand in the south is greater than that in the north every winter. At the same time, the south is also the most economically developed region in the country, so the sharp increase in industrial and residential power consumption naturally leads to power shortage. This year's winter in the northern hemisphere is colder than last year, so the northern neighbor Russia will also be short of electricity and heating, so power outages are also possible.

Finally, although there are currently no reports in the country about the impact of the shortage of electronic components or electricity on mining, especially the annual transfer of mining machines from Sichuan to Xinjiang and other places for mining operations, we can actually see some clues from the difficulty of Bitcoin mining. The price of the currency has doubled to 20,000 US dollars from 10,000 US dollars some time ago, but the increase in mining difficulty is relatively small. This is naturally unreasonable, but with the continuous release of production capacity, I believe that in the future, more and more people will naturally participate in mining, and this mining abnormality will gradually return to normal.