TokenInsight’s newly released Q3 2019 Crypto Mining Industry Research Report shows that both mining difficulty and network hashrate in the third quarter rose to their highest level in 12 months with the completion of deliveries of mining hardware futures orders in the first two quarters.
Mining difficulty increased by 6.26% on average per adjustment period in the third quarter while network hashrate increased by 72%. At one point in the third quarter, mining difficulty and network hashrate reached an all-time-high of 12.76 and T109 ET/s respectively.
The report suggests that BTC price might rise at a faster rate than mining difficulty in the near future as the price-mining difficulty ratio is relatively low by historical standards due to the increased mining difficulty.
Given the placement and delivery of orders of 7nm-chip hardware, BTC mining difficulty and network hashrate are likely to maintain their uptrends until a third block reward halving, which takes place around May 14th, 2020, according to the report.
Although mining hardware models with high power efficiency in the third quarter didn’t perform as they had in the second quarter, TokenInsight’s research showed that they handled downside risks much better than other mainstream models available in the third quarter.
Bitmain’s Antminer T17+ was the first choice among high power efficiency mining hardware in the third quarter. However, T3–43T from Innosilicon, which was the best performing hardware in the second quarter, completely lost its competitive edge to new models in the market in the third quarter with it’s playback cycle increasing by more than 500 days.
✅ Both mining difficulty and network hashrate witnessed their biggest increase in 12 months in the third quarter following the completion of delivery of futures orders of mining hardware placed in the first two quarters of 2019. Mining difficulty increased by 6.26% on average per adjustment period and network hashrate accumulatively rose by 72% in the third quarter of 2019, representing greatest increasing rates in the past 12 months. At one point in the third quarter, mining difficulty and network hashrate rose to an all-time-high of 12.76 and T109 ET/s respectively.
✅ Profitability of 16nm-chip mining hardware including Antminer S9 series shrinked sharply, thanks to unstable BTC prices and pressures of block reward halving. However, miners are unlikely to discard their S9 hardware for maximizing their revenue until the next block reward halving around May 14th, 2020. Meanwhile, manufacturers like Bitmain are gearing up to release 7nm-chip mining models in the near future. Considering the placement and delivery of orders of 7nm-chip hardware, TokenInsight’s research shows that BTC mining difficulty and network hashrate are likely to maintain their uptrends before the third block reward halving next year. However, their increasing rates will not exceed the rates in the third quarter of 2019 despite the uncertainty surrounding BTC prices.
✅ New mining hardware with power efficiency below 50J/T were released by manufacturers like Bitmain and Canaan in the third quarter. Among mainstream models of mining hardware, Antminer S17+ overtook Innosillicon T3–43T to become the most profitable high power efficiency model of the quarter. Under the current BTC price and mining difficulty, Antminer S17+ has the shortest payback period of 230 days. Mining hardware models with high power efficiency are gradually gaining a stronghold in the mining hardware market as network hashrate climbs.
✅ Profitability suffered from the sharp rise in mining difficulty. At the current BTC price and mining difficulty, a majority of mining hardware have difficulty generating enough revenues to cover their purchasing costs. For mining models which are able to cover their costs, their payback periods have been greatly extended in the third quarter. Antminer S17+ has the shortest payback period of 230 days while Whatsminer M20S-~45T has the longest cycle of 668 days. Only Bitmain and Canaan delivered some of the profitable mining hardware in the third quarter.
✅ Besides static profitability analysis, TokenInsight conducted dynamic analysis of the profitability of various mining hardware models. We integrated results of our projection models for BTC price and mining difficulty into dynamic profitability analysis. As per the dynamic profitability model, a vast majority of mining hardware pieces are capable of paying back their procurement costs.
✅ Among cloud mining contracts analyzed in this report, RRMine’s contract with a lockup period of six months has the lowest unit computing power cost of $0.0973 per day.
✅ On November 21, 2019, the AvalonMiner maker Canaan Creative was officially listed on the NASDAQ under the ticker symbol “CAN”, becoming the first bitcoin hardware company to go public. Canaan’s successful listing signifies the beginning of a new era in the cryptocurrency mining industry and indicates that cryptocurrency and blockchain technology are gaining more acceptance and recognitions in traditional financial markets.
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