Mining

2019’s Bitcoin Miners Are 5x Faster Than Predecessors

13/12/2019 by Idelto Editor

Data Shows 2019's Bitcoin Miners 5x Faster Than Predecessors

High-powered bitcoin miners and next-generation semiconductors go hand in hand and as process node technology grows, SHA256 hashrate follows. Coinshares’ recent bi-annual mining report highlights that newly introduced mining rigs have “as much as 5x the hashrate per unit as their generational predecessors.” Advanced chip technology has grown relentlessly and it’s significantly bolstered ASIC device manufacturing. Moreover, news from the International Electron Devices Meeting (IEDM) held on December 7-11 shows that the semiconductor industry is moving beyond the 7nm, 5nm, and 3nm processes and expects to design 2nm, and 1.4 nm chips by 2029.

Also Read: Lightning Network Wiki Page Faces Removal for Lack of Notability

2019’s Bitcoin Mining Rigs Produce Far More Hashrate Than Last Year’s Models

As far as the bitcoin mining industry is concerned, the ASIC device manufacturing industry is growing fast. Today’s devices produce far more hashrate than the mining rigs produced years ago and a number of them produce far more hashpower than last year’s models. Coinshares Research published a report this week that highlights how today’s mining rigs have “5x the hashrate per unit” compared to the earlier-generation units produced. News.Bitcoin.com covered the rising hashrates per unit from devices sold in 2018 and the hashrate increase in 2019 has been exponential. For instance, in 2017-2018 many mining rigs shifted from the 16nm semiconductor standard to the lower 12nm, 10nm and 7nm processes. On December 27, 2018, top bitcoin mining machines produced an average of 44 terahash per second (TH/s). Top 2018 machines included the Ebang Ebit E11+ (44TH/s), Innosilicon’s Terminator 2 (25TH/s), Bitmain’s Antminer S15 (28TH/s) and the Microbt Whatsminer M10 (33TH/s).

2019's Bitcoin Miners Are 5x Faster Than Predecessors — Two of the top producing bitcoin miners manufactured in 2019.

In December 2019, a number of mining devices now produce 50TH/s to 73TH/s. There are high-powered mining rigs like Bitmain’s Antminer S17+ (73TH/s), and the S17 50TH/s-53TH/s models. Innosilicon has Terminator 3, which claims to produce 52TH/s and 2800W of power off the wall. Then there’s rigs like the Strongu STU-U8 Pro (60TH/s), Microbt Whatsminer M20S (68TH/s) and Bitmain’s Antminer T17+ (64TH/s). At today’s prices and an electrical cost of roughly $0.12 per kilowatt-hour (kWh), all of these high powered mining devices are profiting if they mine the SHA256 networks BTC or BCH. At the end of the Coinshares Research mining report, the study discusses many of the next-generation miners available, alongside older machines being sold on secondary markets or still being used today. The report covers machine logistics and prices from manufacturers like Bitfury, Bitmain, Canaan and Ebang. Each mining product is given an “Assumption Rating Strength from 0 – 10,” the report notes.

While Bitcoin Miners Leverage 7nm to 12nm Chips, Semiconductor Manufacturers Have a Roadmap for 2nm and 1.4nm Processes

In addition to the notable performance increase with 2019 mining rigs compared to models produced last year, the semiconductor industry’s recent IEDM event shows ASIC miners will likely continue to improve as the years continue. The five-day conference underlined the growth of 7nm, 5nm, and 3nm processes within the industry, but more innovation is on the way. Slides from Intel, one of the top semiconductor manufacturers in the world, indicates the company plans to accelerate its 10nm and 7nm processes and expects to have a 1.4nm node by 2029. This week saw the first mention of the 1.4nm infrastructure in an Intel slide and anandtech.com says the node would “be the equivalent of 12 silicon atoms across.” The IEDM event slideshow from Intel also shows a 5nm node for 2023 and a 2nm node within the 2029 timeframe as well.

Right now the ASIC mining rigs produced by manufacturers like Bitmain, Canaan, Ebang, and Microbt mostly leverage 12nm, 10nm, and 7nm chips. The 2019 units that utilize these chips are producing upwards of 50TH/s to 73TH/s per unit. This means as 5nm and 3nm processes fortify in the next two years, mining devices should improve a great deal as well. It’s hard to conceptualize how fast mining rigs packed with 2nm and 1.4 nm chips will perform, but they will likely be significantly faster than today’s machines.

Moreover, the majority of mining companies are using chip processes by the Taiwan Semiconductor Manufacturing Company (TSMC). The Taiwan semiconductor foundry plans to accelerate processes just like Intel and it’s possible that TSMC might be ahead of the game in that regard. Despite which semiconductor firm creates better chips faster, the improvements within the chip industry as a whole will most definitely bolster bitcoin mining rigs being built over the next two decades.

What do you think about the growth of high powered bitcoin mining rigs between 2018 and 2019? What do you think about the improvement of 7nm, 5nm, 3nm processes and the possibility of 2nm, and 1.4nm chips by 2029? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Image credits: Shutterstock, Wiki Commons, Fair Use, Bitmain, Innosilicon, and Pixabay.

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Mining Report Shows 65% of Bitcoin’s Hashpower Stems From China

12/12/2019 by Idelto Editor

As the end of 2019 approaches, Coinshares Research has published its bi-annual mining report that contains informative research and observations about the bitcoin mining industry. Since Coinshare’s last report published in June, BTC’s hashrate grew by 50 exahash per second (EH/s) and the firm believes a decent portion of the power stems from China.

Also Read: Bakkt Launches Bitcoin Options in US, Futures in Asia

China Captures 65% of BTC’s Processing Power, Province of Sichuan Commands 54%

With crypto market prices seemingly in a slump, one would think that BTC miners would slow down. However, this hasn’t been the case this year, and despite the turbulent markets, BTC’s hashrate has grown monstrous. On December 12, Coinshares Research revealed some new statistics on the state of bitcoin mining today and a lot has changed since the last report. Of all the consensus algorithms, BTC’s proof-of-work (PoW) miners dominated by both security spend and total revenue. Moreover, the network’s processing power jumped by 50EH/s since the firm’s last bi-annual mining report.

“Since our last report of June 2019, the hashrate has nearly doubled, from approximately 50 EH/s to almost 90 EH/s, having peaked at more than 100 EH/s,” Coinshares’ report details. “During this period the Hashrate grew somewhat slower than the 5-year average — a period which roughly corresponds to the start of the ‘industrial era’ of Bitcoin mining — but significantly faster than both preceding 6-month periods.”

The Bitcoin mining trends research notes that the rising hashrate is due to a combination of stronger BTC prices since the $3,000 range lows and next-generation bitcoin miners. Coinshares says that next-generation mining rigs produced by Microbt, Bitmain, Canaan, and Ebang produce “as much as 5x the hashrate per unit as their generational predecessors.” Between November 2018 and June 2019, Coinshares Research saw capital transfers and bankruptcies in the mining industry but the last two quarters have seen “expansion.”

“What we have seen is some movement of previous-generation hardware to Iran and the establishment of Kazakhstan as a major mining region,” the study underlines. With prices on the rebound, next-generation bitcoin miners, and new mining territories, Coinshares still sees a lot of mining in China. “We have reasons to believe the lion’s share of the newly deployed hardware has been predominantly installed in China,” the company’s research reveals. The report adds:

Regardless of the reasons, the effect is that the current Chinese hashrate ratio is likely higher than in June 2019. While we expect this ratio to fall again as latest-generation hardware further makes its way into the non-Chinese market, at the time of writing, as much as 65% of Bitcoin hashpower resides within China – the highest we’ve seen since we began our network monitoring in late 2017.

According to Coinshares, the remaining 35% of BTC miners stem from regions like Washington, New York, British Columbia, Alberta, Quebec, Newfoundland and Labrador, Iceland, Norway, Sweden, the Siberian Federal District of Russia, Kazakhstan, Georgia and Iran.

Industry-Wide Renewables Penetration Stands at 73%

Coinshares’ last report noted that 74% of the world’s bitcoin mining operations are driven by renewable energy and since then data has scarcely changed. The researchers’ new estimate for industry-wide renewables penetration stands at 73% today. Coinshares assumes that it depends on location but certain areas such as New York State and Texas utilize renewable energy.

“Conversely, however, we also know anecdotally that miners in Kazakhstan – where there does exist a small amount of renewable energy – are all mining on coal,” the researchers suggest. The combination of global mining location estimates and regional renewables penetrations gives Coinshares researchers the impression that the “Bitcoin mining industry is heavily renewables-driven.”

The 15-page report indicates that there was significant growth in the latter half of the year as far as bitcoin mining is concerned. Further, high-powered mining rigs have bolstered the network’s overall hashrate even more so. “Hardware efficiency keeps rising in line with its 5-year trend — an exponential increase where efficiency increases by an order of magnitude(‘does a 10x’) roughly every four years,” the study notes. Coinshares’ report concludes that BTC mining is acting as a “global electricity buyer of last resort” and because of that the industry “tends to cluster around comparatively under-utilised renewables infrastructure.”

What do you think about Coinshares’ bi-annual mining report? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any products, services, or companies. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Image credits: Shutterstock, Coinshares, Pixabay, Wiki Commons, Fair Use, and Bitmain.

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IDEG Reports Launch of New Bitcoin Trusts in Asia With Coinbase as Custodian

12/12/2019 by Idelto Editor

According to a recent press release from IDEG Investment Limited, “Asia’s First Bitcoin Trusts” have been launched “as a traditional and comfortable way for ‘old money’ to invest in digital assets.” The two trusts, Asia Bitcoin Trust I and Atlas Mining Trust I, reportedly allow for investors to gain wrapped exposure to bitcoin and to participate in mining profit sharing, respectively. The total size of the trusts, according to IDEG, stands at $200 million, with Coinbase Custody acting as custodian for both.

Also Read: Bakkt Launches Bitcoin Options in US, Futures in Asia

New Trusts for the Asian Market

IDEG, a “trading platform that bridges the worlds of fiat currencies and digital assets” made a formal press announcement posted to ACN Newswire Dec. 8, stating: “IDEG Investment Ltd, a professional digital asset management company, announced on Nov. 27 in Hong Kong the launch of Asia Bitcoin Trust I and Atlas Mining Trust I, two trusts designed as a traditional and comfortable way for ‘old money’ to invest in digital assets.”

While some are calling IDEG the ‘Grayscale’ of Asia, Asia Bitcoin Trust I will be an actively managed investment vehicle, unlike the passively managed Grayscale Bitcoin Trust. According to IDEG CEO Kevin Yang, “We’ve been in the quantitative trading business for a long time. Some of our core members have been trading digital assets since 2013 … As the investment manager of the Trust, IDEG will apply a range of hedging and arbitrage strategies in order to gain more Bitcoin for the investors and meanwhile effectively control the risk of drawdowns.”

IDEG Founder Raymond Yuan stated:

It’s time for the institutional investors to include digital assets in their asset allocation strategies. Our positioning is to be a bridge to connect traditional investors and digital assets with the highest transparency and the highest security in the industry.

Getting Old Money Into Crypto and Mining

The two investment vehicles focus on different areas. Asia Bitcoin Trust I focuses on actively managed bitcoin investment, providing “accredited and institutional investors compliant, secure, and professionally wrapped bitcoin exposure supported by selected service providers.” Atlas Mining Trust I aims at helping institutional and legacy money enter into bitcoin mining profits.

According to Yuan: “The mining business is quickly evolving, with more and more institutionalized miners stepping in. The keys to mining efficiencies in hardware, infrastructure and electricity costs. Individual miners are dropping out because institutional miners like us can improve in almost every aspect, including capex, opex, operation, and risk management.”

Coinbase Custody as Custodian

The press release reports that Coinbase Custody, “the world’s largest digital asset custodian holding over 900,000 Bitcoins, will act as the custodian for both trusts.” Other sources have reported receiving separate confirmation of this claim. News.bitcoin.com has reached out to Coinbase Custody as well, not yet receiving confirmation at press time.

Acting as trustee, Hong Kong-based Profound Trust Company Ltd, “a trust company with more than 1000 clients in Asia,” is also part of the project, according to the release. Whether IDEG’s new investment vehicles can mimic Grayscale’s success remains to be seen, but CEO of Profound Trust Lu Qi is hopeful: “Nowadays as more and more institutions and sophisticated investors seek exposure to the blockchain and digital asset market, they demand compliance, security, and professionalism. We seek the highest standards in these aspects. The two trusts are designed to offer such investment vehicles for investors.”

What are your thoughts on the launch of these new investment vehicles? Let us know in the comments section below.

Images courtesy of Shutterstock.

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Bitcoin History Part 21: Miners Pour One out for Satoshi

10/12/2019 by Idelto Editor

There are a few ways of looking at bitcoin mining. As an ostensibly selfish enterprise, wherein miners are seeking to extract precious coins for profit. And as a community of individuals who envisage a better way of generating, handling and using money, and are motivated to secure the Bitcoin network. The truth is probably somewhere in between. Whatever the case, greed was not the motive for the bitcoin miners who took it upon themselves to claim less than their allotted coinbase reward. Why would anyone do such a thing?

Also read: Bitcoin History Part 20: BTC Reaches $1

The First Miner to ‘Pour One Out’

Paying homage to the legends who have gone before is not unusual. It nevertheless came as a surprise when Bitcointalk user ‘midnightmagic’ decided not to claim his coinbase reward for BTC block 124,724 as a token of respect to Bitcoin’s departed founder. Midnightmagic publicized his tribute on June 8, 2011, about six months after Satoshi’s final Bitcointalk message.

Coinbase rewards are awarded to miners of a valid bitcoin block, and until they were halved on November 28, 2012 they stood at 50 BTC. While each node verifies that miners don’t attempt to claim more than they are allowed, the software does not prevent them from claiming less than their earned share. Midnightmagic spoke for many when he wrote that he viewed this “as a freedom in the protocol, not a drawback.”

He added, “To make absolutely sure that I was doing it on purpose, I set the reward value to 49.99999999, which meant that I inadvertently threw away the transaction fees which I could have allocated to myself. I did it as a tribute to our missing Satoshi: we are missing Satoshi, and now the blockchain is missing 1 Satoshi too, for all time.”

Underpaying oneself to symbolically honor a shadowy figure who got the ball rolling on Bitcoin may seem like an odd move. But midnightmagic didn’t want to claim credit for the idea, saying years later that he merely implemented something Bitcoin developer Matt Corralo had “lobbed over the wall at me.”

A Tidal Wave of Poured Liquor

Midnightmagic may have been the first but he certainly wasn’t the last. Miners have foregone their coinbase rewards at various block heights, with the most generous being 12.5 unclaimed BTC (the full block reward) at 501,726. Another miner tipped half of his reward, a sum totalling 6.25 BTC, in Satoshi’s direction at block height 526,591. The most intense patterns of such behavior occurred at heights 162,000, 180,000-230,000 and 530,000, with over 1,200 anomalies recorded.

Of course, BTC is not only lost when miners purposefully claim less than they are entitled to. Due to an early glitch in Bitcoin (later rectified by BIP-30), it was possible to create a coinbase transaction which duplicated a previous coinbase, thereby causing the coins created by the older coinbase to be irreversibly overwritten. These duplicate coinbase transactions wiped 100 BTC from Bitcoin’s ledger before the 2012 fix was put in place.

What would Satoshi have thought of miners deliberately reducing the number of spendable coins in existence? We can only speculate. While many factors affect Bitcoin’s actual circulating supply, from lost keys to coins sent to the genesis address, unclaimed rewards speaks to the enduring depth of feeling towards the enigmatic Nakamoto. Tipping their 40 ounce towards the kerb by reducing their coinbase reward is a gesture of miner gratitude, indelibly recorded onchain.

Bitcoin History is a multipart series from news.Bitcoin.com charting pivotal moments in the evolution of the world’s first and finest cryptocurrency. Read part 20 here.

Images courtesy of Shutterstock.

Did you know you can verify any unconfirmed Bitcoin transaction with our Bitcoin Block Explorer tool? Simply complete a Bitcoin address search to view it on the blockchain. Plus, visit our Bitcoin Charts to see what’s happening in the industry.

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Bitcoin Mining Operations Offer New Strategies Before Reward Reduction

10/12/2019 by Idelto Editor

Bitcoin Mining Operations Offer New Strategies Before the Reward Reduction

As the reward halving approaches, bitcoin miners are preparing new strategies so customers can reap the most profits from their hashrate services. On December 3, the mining operation Poolin introduced a hashrate auto-switch feature so clients can automatically switch between BTC and BCH mining. Moreover, a few days later at Bitmain’s annual customer appreciation meeting, the company’s CEO Jihan Wu explained the firm is offering three strategic mining offerings.

Also read: Mining Chip Maker Ebang Next in Line to File for US IPO

Poolin’s Auto-Switch Feature

Bitcoin mining is extremely competitive, and currently there’s a lot of processing power pointed at the SHA256 consensus networks BTC, BCH, and BSV. Ever since miners could choose between the BTC chain and the BCH chain, the profitability between those two networks has varied. For instance, at the time of publication, it is 2.5% more profitable to mine on the Bitcoin Cash blockchain, but this metric can change often.

Similarly, the profitability between BTC and BCH can vary against BSV as well. Most miners process blocks on both the BCH and BTC chains, but a few operations mine all three chains depending on profit changes. Just recently, the mining operation Poolin announced a new hashrate auto-switch feature that will automatically connect to the most profitable chain between BCH and BTC. Poolin says that BSV will be included in the near future as well. According to Poolin, the hashrate auto-switch functionality will only work with cryptocurrencies using the same algorithm.

“We are thrilled to provide this feature that will increase profits for our miners, this hashrate auto-switch continues in the direction that Poolin has been forging, mainly, bringing excellence to this industry and customer-first service,” Poolin’s VP Alejandro De La Torre announced.

The hashrate auto-switch feature was discussed on crypto-centric forums and one person asked if the switching feature would “make block time variance worse.” “Not really since just 2.8% of BCH miners are from Poolin. It’s mostly annoying for Bitcoin since its difficulty won’t adjust as fast to switching miners,” a BCH supporter replied.

Bitmain’s Three Strategies

Following the announcement from Poolin, Bitmain’s Jihan Wu revealed three new strategies for customers at the company’s annual customer appreciation meeting. Regional reports from China say that the Bitmain CEO introduced “installment payments,” “option hedging” and “joint mining” services. With the installment payment system, big facilities that purchase 100+ mining devices can put 50% down. Let’s say they want to purchase 5,000 mining rigs, then only a 20% down payment is required. However, the buyer needs to settle up seven days before the items are delivered. Jihan Wu also told attendees about the option hedging plan that will protect the price of bitcoin. He said that Bitmain plans to purchase options from the company Matrixport in order to combat price dumping. Local reports detail that the Bitmain option product is called the “Bitcoin 2020 / 3 / 27 35000 CNY Put Option.”

In addition to the installment payments and option hedging, Jihan Wu spoke about offering a joint mining service that lasts 12 months. Reportedly, Bitmain will provide S17 mining rigs and pay the electrical costs, but the buyer needs to provide a facility and maintenance personnel. “The income during the cooperation period is settled on a monthly basis, which is distributed as 25% for the partners and 75% for Bitmain,” 8btc columnist Vincent He explained. “If the revenue cannot offset the electricity charge, no distribution will be made.”

Structure Changes and New Mining Services Will Be Offered Prior to the Halving

It’s likely that many mining operations will change their structure and offer new features as signs of this trend have been cropping up six months before the reward halving. On Halloween, Bitcoin.com published a video of professional miners from around the world explaining what they think will happen when the block reward shrinks. The film included mining heavyweights like F2Pool’s Global Director Thomas Heller, Hyperblock’s CEO Sean Walsh, and Genesis Mining CEO Marco Streng. Some of the miners’ predictions in the video showed why SHA256 mining operations are trying to profit with new types of provisions like hashrate auto-switching and joint mining services.

“If you look at six months before the halving and six months after the halving in both previous instances you see a massive upward surge in the price of bitcoin,” Sean Walsh remarked in the film. “It is a bit scary being a miner and knowing that your revenue stream is gonna get cut in half overnight, but the exchange rate will more than compensate for the reduction in our bitcoin denominated revenue.”

What do you think about mining operations offering new types of services just before the halving takes place? Let us know what you think about this subject in the comments section below.

Disclaimer: This article is for informational purposes only. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Image credits: Shutterstock, Blockchain.com, Coin Dance Cash, news.8btc.com, Wiki Commons, Fair Use, Bitmain, and Pixabay.

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