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CoinShares Research, Poolin Interview, & Canaan's Precarious Position

In the second release of our MinerMovements newsletter, the MinerUpdate.com team summarize the latest mining research and news developments while also sharing some memorable quotes from our interview with Poolin co-founder Chris Zhu.

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Mining Pool Rankings

Poolin, F2Pool, and BTC.com continue to mine the largest share of Bitcoin blocks. These leading pools had a collective hash rate share of greater than 47% over the past seven days as illustrated by BTC.com data in the above table. Recently launched mining pools 1THash and BytePool accounted for over 10% of Bitcoin hash rate during the past week. Both 1THash and BytePool are controlled by Chinese company Valarhash.

Bitcoin Hash Rate & Difficulty Level

The seven-day moving average of Bitcoin hash rate illustrated above by bitinfocharts.com is currently estimating the Bitcoin hash rate to be 98 EH/s. Raw values from bitinfocharts.com are estimating the higher figure of 111 EH/s. The Bitcoin difficulty level rose by 0.56% during the week with an average block time of 9 minutes and 57 seconds since the previous adjustment. Data from BTC.com is estimating that difficulty will increase by 3.27% at the next adjustment.

Bitcoin Price -

After a sharp decline in the first two days of trading last week, Bitcoin price reached a low of $6,410. It has since significantly rebounded and currently trades at $7,579 at the time of writing. Whether the market-wide average mining cost of production has any impact on where Bitcoin price finds its bottoms remains a hotly debated topic.

Miner Insights-

Majority of Bitcoin Miners Profitable at Current Prices According to CoinShares Research - In their latest research report covering the Bitcoin mining industry, CoinShares estimates the market-wide cost of production per bitcoin mined to be $6,100 highlighting that most miners are likely profitable at current prices. CoinShare’s figure for the amount of Bitcoin mining powered by renewables was roughly the same as their last research report with an estimated percentage of 73% powered by renewables.

Chinese Company Valarhash linked to 9% of Bitcoin Hash Rate - At an event in Chengdu on December 9th, Chinese company Valarhash launched four Bitcoin mining products revealing a link to over 9% of the total Bitcoin hash rate. Bitcoin mining pools BytePool and 1THash were among the products launched.

Mining Leader Interview Series-

We caught up with Poolin co-founder and COO Chris Zhu in Beijing last month. In what was an extremely interesting conversation, Chris detailed what Poolin did to rise to the top of the Bitcoin mining pool rankings while also outlining their business strategy moving into 2020. Chris also shared with us some interesting insights into the wider mining environment and his opinion on other matters including Bitcoin Cash and China’s work with blockchain technology. Here are some salient quotes from our conversation.

On the upcoming halving and why it may act as a self-fulfilling prophecy in the market-

My personal opinion is the halving fundamentally does not affect the price of bitcoin. But everybody thinks the event will make bitcoin price go up. So the price must go up.

On the price prospects of Bitcoin Cash -

I can’t comment on how the network will perform in the long-term as I know nothing about the BCH development community. But in terms of price, I believe BCH will continue lower and lower in terms of its BTC value. It’s a one-way trip.

On mining in China moving into 2020 -

When we mention mainland China, the hash rate dominance will definitely be lower. And it will continue to go lower and lower. Because many Chinese miners are moving their mining rigs overseas.

You can read the full Poolin interview here.

Quick Miner Movements -

Canaan is in a precarious position . After raising $100 million, a measly amount when it comes to Bitcoin ASIC manufacturing, Canaan’s next hardware release expected in February has poorer performance than mining rig models which Bitmain currently has on the market. The February batch of Avalon A11 mining rigs has a hash rate of 68 TH/s with a power efficiency of 47 J/TH while Bitmain’s Antminer S17+ has a hash rate of 73 TH/s and power efficiency of 40 J/TH. Both are similarly priced which raises the question of why any purchaser would wait until February for hardware which is less powerful and less efficient than hardware which they can purchase now. Canaan’s share price has been reflecting their vulnerable position in the market. The price declined 8.27% during trading last week and has depreciated ~62% since their IPO.

Bitcoin mining pool NovaBlock announced partnerships with financial services firm Secure Digital Markets and immersion cooling company Immersion Systems during the week.

Financial services firm GSR announced a partnership with Interhash. Interhash is a strategic partner of Canaan and the two firms have combined forces to offer a suite of risk management products to miners.

Best of the Rest-

Whats Halvening #3 - Every edge matters in the intensely competitive world of Bitcoin mining. In the race to increase hash power and reduce costs, immersion cooling is proving to be a promising innovation. In the latest What’s Halvening podcast, Cassie Clifton of Bitcoin Magazine is joined by Immersion Systems CTO Chase Blackmon. Their conversation covers some of the technicalities of how immersion cooling works while also detailing the incentives for miners in both warm and cool climates to adopt such infrastructure.

Crusoe Energy Plans 70 Bitcoin Mining Data Centres for 2020 - After recently raising $70 million in financing, Denver-based Crusoe Energy is planning the installation of seventy small Bitcoin mining data centres in 2020 with a total estimated power draw of 1 MW. Crusoe Energy specializes in installing Bitcoin mining data centres at shale drilling sites where the sites are powered by excess gas production which otherwise would be wasted through flaring.

MicroBT Founder Arrested for Alleged Embezzlement - Wolfie Zhao of CoinDesk updates us on the arrest of MicroBT founder Zuoxing Yang. Reports have surfaced that the arrest is related to the alleged embezzlement of the equivalent of $15,000 USD.

Bitmain Subsidiary has ~$670k in Assets Frozen - Zhao further notifies us of a Bitmain subsidiary, Shenzhen Century Cloud Core, having 4.7 million RMB in assets frozen by the order of Shenzhen Bao’An District Court. The plaintiff, Dongguan Yongjiang Electronics, is a Shenzhen-based electronics components provider who is currently in a trade contract dispute with the Bitmain subsidiary.

Ebang sues publicly-listed Chinese company Wholeasy - Zhao explains another development unravelling in China with Ebang suing publicly-listed Chinese company Wholeasy for $15 million in unpaid funds for the purchase of 100,000 Ebang 9+ mining rigs in March 2018. While the case is ongoing, Zhao’s article details how an app developer owned by Wholeasy got exposure to Bitcoin mining despite uncertain Chinese policy.

About MinerUpdate.com

MinerUpdate.com is the leading crypto-mining publication. Our aim is to bridge the gap between the East to the West in mining while delivering to our readers the latest insights and developments in the industry. Our publication is ad-free, bias-free, with no conflict of interest when it comes to delivering high-quality content. In October 2019, MinerUpdate hosted MinerSummit, the first English crypto mining event in China.

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