For cryptocurrency mining companies, the future is either not guaranteed or completely non-existent. Large chip manufacturers primarily control the business of crypto mining. Consequently, the smaller players find it hard to keep up with the competition. Unfortunately, when chip manufacturers finally exit the market, machine manufacturers may be unable to withstand the pressure.
Canaan, one of the leading machine manufacturers, has reportedly engaged the United States Securities and Exchange Commission in a bid to seek funding from US investors. The top three crypto mining machine manufacturers are Bitmain, Canaan, and Ebang.
The giants seek to be listed on HKEx
Interestingly, last year, the three giants indicated their willingness to be listed on the Hong Kong Stock Exchange. The listing was meant to enable the firms to issue an initial public offering (IPO) to raise funds for expansion purposes. A look into their financial records shows a picture of companies exceeding their traditional counterparts. For instance, their annual revenue growth rate exceeds 300 percent.
Unfortunately, there’re many unpredictable events in the virtual currency mining machines sector. For example, the future of cryptocurrency remains to be speculation, followed by regulatory pressures. Additionally, chip manufacturers are slowly but steadily introducing investors to chips used in artificial intelligence (AI)
Crypto mining business is not sustainable
According to the Hong Kong Stock Exchange, the three giant machine manufacturers could not be listed because their “business was not sustainable.” Although the mining machinery industry is uncertain, the future for pure machine driven business is non-existent.
In 2017, for example:
“Canaan delivered 294,500 sets of mining machine, with a market share of 20.9% in terms of delivery volume, ranking second in the world. Bitmain ranked first in the world with a 66.6% market share. Ebang was third.”
Notably, those values considerably reduced in 2018. Before the entry of specialized cryptocurrency mining equipment, Bitcoin was being mined with video cards. Nvidia, a manufacturer of high-end graphics cards, benefited from the demand. Specialized mining machines from the giants, however, overtook graphics cards.
Nvidia refusing to join the wave
Surprisingly, instead of Nvidia making attempts to enter the crypto mining space, it prioritized gamers instead of miners. The graphics card manufacturer implied that mining machines are not a sustainable business, but gamers would “continue to contribute to the company’s revenue.”
According to a researcher, Ma Tianyuan:
“For mining machine manufacturers, the entry of digital currency into the mainstream society is both an opportunity and a challenge. Capacity and chip are the core competitiveness of mining machine manufacturers, which can limit the entry of small players, but traditional chip industry giants can break through these thresholds and even achieve overtaking in corners. After the giants personally leave the field, mining machine manufacturers will face tremendous pressure.”
Interestingly, even the manufacturers see no future in the crypto-specific machine. Canaan, for example, in its prospectus noted that funds raised through an IPO would be used for “ASIC (application-specific integrated circuit) chips for developing artificial intelligence (AI) algorithms and applications.”