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Bitcoin mining: efficiency is key

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Increased difficulty, obsolescence and manufacture of new equipment with greater hash power. It is the circle that fuels competition among Bitcoin mining hardware manufacturers. Efficiency, meanwhile, is the battlefield in that circle.

Achieving better efficiency means taking the lead in the “arms race.” Those companies that do not achieve the optimal performance of their ASICs will be left behind, as indeed Canaan Creatives, one of the main manufacturers, is lagging.

Today, there is a highly centralized oligopoly. A handful of companies control the production, distribution, and even the rate and electrical consumption of the entire mining business of the main cryptocurrency in the world.

Who is winning the “arms race”?

The almighty ones on the market are Bitmain, MicroBT, Ebang, Canaan and Innosilicon. Right now, these Bitcoin mining equipment manufacturers are betting on efficiency to gain (or regain) ground.

In a report published by BitMEX Research, the picture of the competition and the state of the big manufacturers are analyzed. The predominant place is occupied by Bitmain. This Hong Kong-based company dominates 46% of the market. It should be noted that this domain is dramatically declining.

For its part, the relatively new MicroBT covers 37% of the market, constituting a threat to Bitmain. In the next sales batch, the new balance will be defined. The most efficient Bitcoin mining machines will be the engine of it.

The two giants launched into the market with their most powerful versions. Bitmain with the S19 and T19 series, while MicroBT did it with the M30S +. The former have already sold out their initial lot, while the latter are being highly demanded by the growing United States market.

On the other hand, the Canaan Creatives company continues to fight against adversity. Its most advanced miners, the AvalonMiner 1166 and 1146 pro, are clearly inferior to their hashed rivals. At the same time, the company continues to lose strength in the stock market, after continuous collapses from May 14 until now.

Percentage of market share of the main mining hardware manufacturers. Source: BitMEX
Percentage of market share of the main mining hardware manufacturers. Source: BitMEX

What is the efficiency of Bitcoin mining machines?

Efficiency can be summed up in the simple Watts by Terahash (W / T) formula. It indicates that the lower the electricity consumption by Terahash, the greater the efficiency. On the contrary, if the number of watts is high in this relation, the efficiency of the equipment is low.

For example, the already reviewed S19 and M30S + from Bitmain and MicroBT respectively, have an efficiency below 30 watts per Terahash. In this way, as the graph expresses, low electricity consumption is one of the most important parts of the “arms race” of the most important manufacturers. Therefore, this has been decreasing and everything indicates that this will continue.

Competition has fueled the continued efficiency of Bitcoin mining hardware.
Competition has fueled the continued efficiency of Bitcoin mining hardware.

Ecological benefit

This trend to improve efficiency with Bitcoin mining equipment consuming less and less electricity benefits the environment. The usual accusation that Bitcoin mining is a “threat”, as the alleged exaggerated consumption of energy increases carbon emissions, remains on the plane of exaggeration according to multiple studies.

One of these studies was presented in November 2019. It was carried out by researchers from Aalborg University, Denmark. In the published article, they dismiss the allegations and highlight the role of progressive efficiency of teams dedicated to Bitcoin mining.

“Unlike previous studies, it has been found that the production and purpose of such equipment will lead to a smaller contribution to the total impact. While Hashrate is expected to continue to increase, energy consumption and the environmental impact of TH mined will tend to decrease, “the study concludes.

The other important aspect of this continued development of ASICs is that it will force inefficient mining companies to withdraw. All this leaves a pretty encouraging picture about the future of Bitcoin mining in terms of efficiency. It all comes down to a line where power consumption has an inverse progression to hashing power.

Data to consider

  • Bitmain’s internal problems caused its market influence to plummet from 75% to 46%.
  • Between 2017 and 2019, MicroBT advanced from $ 7 to 35% in the market.
  • Bitmain’s S19 series has a hashing power between 95T and 110T per second, while the MicroBT M30S + has a power of 100T.
  • The current global consumption of Bitcoin is 69.03TWh, which represents 0.33% of world energy.

Reliable sources

The information in this content has been extracted from reliable sources detailed below:
1- Content managed professionally by the authors of CryptoTendency.
2- External sources: Investing.com, Bitmex.com and Vbn.aau.dk.



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