Finally, Bitcoin mining machines are in short supply again

This article is from CoinDesk, original author: Wolfie Zhao

Odaily Planet Daily Translator | Moni

The recent exciting bull run has rekindled the demand for new mining machines in the cryptocurrency market, and some mining machine manufacturers have begun to produce more mining equipment to meet the needs of miners. At the time of writing, the price of Bitcoin on CoinMarketCap has exceeded $11,400, up nearly 200% since February this year.

Steven Mosher, head of global sales and marketing at Canaan Creative, said the current rise in bitcoin prices has led to a surge in demand for mining machines, and supply is beginning to be in short supply. Canaan Creative is the manufacturer of Avalon mining machines. Although Steven Mosher declined to disclose the company's mining machine orders, he said that the inventory of the entire mining machine industry is currently declining, while demand is rising. He said:

“It feels like we’ve returned to the third and fourth quarters of 2017, when demand for mining hardware was three times the supply.”

The price of Bitcoin doubled between July and September 2017, and then quadrupled in the fourth quarter of that year to reach an all-time high of nearly $20,000.

TokenInsight, a research firm focused on cryptocurrency mining and trading analysis, said that the average payback period for new mining equipment has dropped significantly due to the rise in Bitcoin prices over the past few months. TokenInsight estimates that the average payback period for mining equipment was about 120-280 days before, but it has dropped to 60-150 days in the second quarter of 2019.

Cryptocurrency market is interested in new mining machines

In order to seize this bull market opportunity, Canaan Creative launched a new mining machine model last month, the AvalonMiner 1041. It is said that the computing power of this new mining machine can reach 37 TH/s and the power consumption is about 2,361 watts per hour. In comparison, the maximum computing power of the old model Avalon 851 is only 14.5Th/s and the power consumption is 1450 watts per hour.

Steven Mosher added that since many large customers purchase in bulk, the delivery time of the new mining machines has been scheduled until October.

Similarly, crypto mining machine manufacturing giant Bitmain also launched improved versions of the AntMiner S9 mining machine last week, namely AntMiner S9 SE and AntMiner S9k. According to Bitmain's official website, the first batch of new mining machines may be shipped in August this year.

It is worth noting that the market demand for mining machines with greater computing power and higher prices is also very high. The WhatsMiner M20 mining machine launched by Yang Zuoxing, former chip design director of Bitmain, has attracted more and more purchasing demand. The next batch of M20 mining machines is now almost sold out and the delivery time will have to wait until at least October.

In addition, Yang Zuoxing also revealed another important reason for the current shortage of mining machine market: limited chip supply. It is precisely because there are not enough chips that the supply/output of mining machine industry is difficult to meet the demand. He said:

“The growth of Bitcoin’s computing power cannot keep up with the pace of price jumps, and the current mining machine production capacity is a bottleneck.”

Bitcoin hash rate increases

In fact, the recovery in demand for mining machines is also reflected in the total computing power of the Bitcoin network, which recently reached an all-time high.

According to data from mining pool BTC.com, the computing power on the most recent day (June 25) was 65 million TH/s, while the seven-day average computing power was 58 million TH/s. Since the price of Bitcoin fell at the end of last year, the 14-day average network computing power has once dropped to 36 million TH/s. If compared based on this number, the current cumulative computing power of the Bitcoin network has increased by about 80%.

Assuming that all this additional mining power comes from commonly available mining equipment on the market (such as AntMiner S9 or Avalon 851 with an average mining power of 14 TH/s), this means that at least about 2 million mining equipment have been deployed in the cryptocurrency market in the past few months.

According to BTC.com estimates, Bitcoin mining difficulty will increase by about 6% at the beginning of the next adjustment cycle, reaching an all-time high of 7.8 T.