With the entry of multiple countries, the monopoly of digital currency mining will be broken

Recently, cryptocurrency mining has attracted the attention of many countries, including Japan, Russia, Vietnam, etc. Countries and regions have entered the mining market one after another. Under this trend, the pattern of this field may undergo tremendous changes in the future.

With more than 70% of the computing power, China occupies the vast majority of the mining market

Take Bitcoin mining for example. The top six mining pools in terms of computing power are AntPool (13.5%), BTC.TOP (12.1%), BTC.COM (11.7%), ViaBTC (11.1%), FishPool (8.3%) and GuoPool (7.3%). In addition, with the addition of smaller mining pools such as Bixin (4.1%), BW Pool (2.8%) and BATPOOL (1.1%), my country currently accounts for more than 70% of the computing power of the Bitcoin network.

Screenshot from: Coin Dance

In addition, the Antminer produced by the Chinese company Bitmain has a great influence in the global mining market. According to the mining pool, they own about 56% of the world's mining machine technology, and their products are sold all over the world. It is understood that MGT, a New York investment company that started to get involved in the Bitcoin mining industry in July last year, purchased more than 1,000 Antminers from Bitmain again last month.

It can be seen that the current digital currency mining field presents a relatively obvious unipolar trend. However, due to the influence of various factors at home and abroad, this monopoly in the field may no longer exist in the near future.

Many countries enter the market and challenge the "leading company"

With the continuous development of the digital cryptocurrency field and the gradual increase in its acceptance by various countries, some countries have begun to pay attention to this emerging field. As an important link in the digital cryptocurrency industry chain, mining is naturally one of their focuses.

• Japan: Innate deficiencies are made up for later

Since the second half of this year, many Japanese companies have announced that they will soon launch cryptocurrency mining businesses. On September 7, Japanese Internet giant GMO said it would invest 10 billion yen (equivalent to RMB 580 million) to establish a digital currency mining center. Soon after, the country's entertainment giant DMM also released its future mining plan, launching a new mining pool "DMM Pool" next month and becoming one of the top ten mining pools in the world in 2018...

However, Japan, which is extremely short of energy resources and heavily dependent on imports, is not suitable for vigorously developing the Bitcoin mining industry. First of all, the competitiveness of electricity is far behind other regions. For this reason, some companies entering this field did not set up mining pools in Japan, but moved abroad, such as the Internet company GMO, which plans to set up a digital cryptocurrency mining center in the Scandinavian Peninsula in Northern Europe.

On the other hand, in order to improve its competitiveness, GMO is currently focusing on the development of 7-nanometer ASIC chips and said that it will enter the testing phase in the spring of 2018. It is reported that most mining machines, including Ant Mining Pool, currently use ASIC chips of more than ten nanometers; and although the seven-nanometer chip is small, it can accommodate more than 20 billion transistors, doubling the performance. However, this technology is not yet mature, and companies such as IBM, ARM, and TSMC are also conducting related tests and experiments. It is still unknown when it can be mass-produced. In other words, if GMO can take the lead in developing 7-nanometer ASIC chips in the future, the mining pool may be able to quickly rank among the top in the global digital currency mining industry.

• Russia: Positive policies promote development

Recently, Russia, which is actively entering the first echelon of the cryptocurrency and blockchain fields, has launched positive policies to encourage the development of this field. Not only does it accept Bitcoin as a payment method and plan to issue a national digital currency, it also plans to provide miners with a 50% discount on electricity.

Last month, Russia's largest energy company EuroSibEngergo and gas group Gazprom tried to get in touch with Bitcoin miners to negotiate the sale of their surplus electricity (Russia currently has 20 gigawatts of surplus electricity) to miners at a 50% discount. This means that the country's miners may be able to use electricity at 2 rubles per kilowatt in the future, which is about 2.2 yuan per kilowatt. This price level is lower than the average electricity price (about 30 cents) that a high-yield mine in the mountains of Sichuan, China needs to pay.

In addition, before this news came out, Putin's assistant Dmitry Marinichev also announced his involvement in cryptocurrency mining. According to him, Russian mining company Russian Miner Coin will launch an ICO event and raise $100 million to develop efficient mining equipment, thereby challenging China's position in the mining field. In Marinichev's view, Russia will likely seize more than 30% of the global cryptocurrency mining market in the future.

• Other countries: Using their power advantages to enter the market

In addition to the economic powers mentioned above, people in economically backward countries such as Vietnam and Venezuela have also begun to make a living by mining Bitcoin. Although the technical level of these regions is not high and most of the mining equipment used needs to be purchased overseas, they have an inherent advantage and extremely low electricity prices. Take Venezuela, for example. Under the socialist system of President Nicolas Maduro, the country's electricity subsidies are very high, basically equivalent to free. However, compared to grabbing a share of the total network computing power, regions such as Venezuela enter the market more for survival - in the context of a social background where basic necessities are in short supply and inflation is very serious, encrypted digital currencies established outside the government system provide people in the region with opportunities to make a living.

Internal and external troubles may disrupt the market structure of one dominant player

As the digital cryptocurrency market continues to expand, multinational companies are entering the mining field with different attitudes and capital. Although most plans are still just "paper talk", the trend of the digital currency mining market from unipolarity to multipolarity is gradually emerging.

In addition to these "external troubles", the Chinese digital currency market seems to be facing certain "internal troubles" recently. On September 4, the "Notice on Preventing the Risks of Token Issuance and Financing" issued by the People's Bank of China, the Internet Finance Association and other seven ministries and commissions dealt a heavy blow to the Chinese digital currency market, from the suspension of platform ICO business to the withdrawal of various tokens, to the suspension of Bitcoin and other trading businesses by large exchanges such as BTCC, OKCoin and Huobi... Recently, the Chinese government's digital currency regulatory activities are coming to an end, but there are rumors in the circle that "after ICO, Bitcoin and other transactions, mining pools will become the next target of attack." Of course, the authenticity of the news remains to be verified, but to some extent, this has brought certain uncertainties to the domestic mining market. Therefore, under the double attack of internal troubles, the possibility that this dominant mining pattern will be broken is increasing.