Weekly Blockchain Industry Report-23rd Issue: Bitcoin mining is experiencing a new arms race
(September 15th–September 21st, 2018)
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Market Overview
This week, the daily average global cryptocurrency’s market capitalization was $200.103 billion, representing a 1.44% increase from last week. Among them, the Top 5 cryptocurrencies’ market cap increased by 2.96%;The daily average transaction volume was $11.87 billion, representing a 0.29% increase. Meanwhile, the Top 5 cryptocurrencies’ transaction volume increased by 7.45%. Among all of them, XRP and EOS had a very strong performance, they experienced a maximum price increase of 78.04% and 21.22% individually. Meanwhile, BTC, ETH and BCH also had a good time, the maximum price increase of BTC within this week reached 5.55%.
Among the top 10 cryptocurrency gainers this week, most of the projects were in the direct application field. Bob Repair, a token in E-Commerce industry, experienced the greatest increase in price by 234.69%.
Analysis of Top 200 Market Cap Projects
Until 12:00 p.m. of the releasing date, the market capitalization of the top 200 projects increased by 4.4% compared with last week. Based on our classification of 4 categories: cryptocurrency and payment, basic chain and protocol, vertical chain and protocol, and vertical industrial application, only the projects of the vertical industry sector decreased while projects in other 3 fields increased in price. Among them, cryptocurrency and payment sector experienced highest price increase.
Through further classification of the vertical chain and protocol and the vertical industrial application sectors, it was found that Transportation sector experienced market cap increase as high as 25.94%, but Education field’s market cap decreased by 28.01%.
Analysis of Newly Listed Projects
According to latest announcements from more than 30 exchanges including OKEx, Binance, Huobi, Bitfinex, Bithumb, ZB.com, Upbit, HitBTC, Bittrex, Poloniex, there are 9 newly listed cryptocurrencies and 14 newly listed trading pairs. Among them, XTZ/BTC and LTC/USD increased in price by 10.96% and 10.15% individually.
Analysis of Closed Public Offering Projects
There have been 40 closed public-offering projects this past week, with the soft cap totaling nearly 187 million USD. Among these projects, IoT projects have the largest soft cap, exceeding 5 million USD.
Important News on Global Governmental Policies this Past Week
France: Finance Minister Bruno Le Maire said recently that the French stock market regulator AMF now has the authority to issue licenses to companies to raise funds through ICOs. The legislation aims to protect the interests of contributors.
The United Kingdom: The UK Financial Conduct Authority (FCA) will update the Regulatory Activities Act, including initial token offerings within its regulatory scope as a matter of urgency, and aligning investor protection measures with those of the United States.
China: The People’s Bank of China (PBoC) issued a new announcement on September 18 to remind investors of the risks associated with ICOs and cryptocurrency transactions.
The EU: In a letter to members of the European Parliament, President Mario Draghi of the European Central Bank said that the ECB currently has no plans to issue any central bank digital currency.
Ukraine: The Ukrainian parliament has proposed a bill that would tax residents’ crypto-related profits. Legislators propose a 5% tax on individual and corporate profits from cryptocurrency trading.
Japan: Japan’s Financial Services Agency recently held the fifth cryptocurrency seminar to discuss provisions related to the launch of a new coin. These provisions prohibit the use of cryptocurrencies that are problematic in terms of user, investor, and public protections.
Keeping Up with the Blockchain Giants
September 15th
The US-based technology company Ripple announced its partnership with Saudi Arabia’s largest bank, National Commercial Bank (NCB).
September 16th
The South Korea-based food delivery platform Shuttle Delivery announced that they now accept Bitcoin Cash for door-to-door delivery in Seoul. They are not the only catering service to accept BCH. Takeaway.com, which links more than 30,000 restaurants in Europe and Vietnam to BCH users, also accepts it.
September 17th
NASDAQ, the world’s second largest stock exchange, announced on Friday that it is acquiring Cinnober, a trading solutions provider based in Sweden.
September 18th
In a news release on Tuesday, September 18, the US pharmaceutical company Verseon confirmed that it has become the latest medical institution to experiment with blockchain technology. Its main product is a self-developed drug discovery platform based on physics.
September 19th
Fujitsu Laboratories announced that it has developed a blockchain extension technology called ChainedLineage that securely uses data from different companies and individuals to confirm its provenance and processing history, improving the reliability of cross-industry data distribution.
September 20th
Hu Xi, Vice CTO, Vice President and Chief Architect of Ant Financial, announced today that Ant Financial Cloud has officially upgraded into Ant Financial Technology, and that it has been fully opened to the public. It provides comprehensive digital financial solutions for the industry. Its cutting-edge technologies, including blockchain, are open to the public.
September 21st
According to Cointelegraph, the Swiss financial giant Crypto Valley Venture Capital has launched a blockchain incubator called SwissInfo, with planned investment of $100 million.
Hot topic of this week: Bitcoin Mining Experiencing a New Arms Race
On September 19, Shenzhen MicroBT Electronics Technology Co., Ltd. held a product launch event for its new Bitcoin mining machine Shenma M10, based on the sha256 algorithm. Shenma M10’s computing power reaches 33T hash/s, and its power consumption ratio is 65W/T, 35% less than Bitmain’s Antminer S9, the current mainstream device. Products of the world’s second-largest Bitcoin mining machine manufacturer Canaan Creative, the Avalon Miner A9 based on 7nm tech, will also start shipping on September 20. Its power consumption ratio is about 80W/TH. Having dominated the market for 2 years, the S9 is now facing strong challenges. A new arms race has officially begun in the mining industry.
Evolution of Bitcoin Mining Chips
Since the Bitcoin mining algorithm has not changed for many years, the mining industry has naturally and gradually moved towards scale and centralization. Top players are constantly striving to optimize costs and improve efficiency. The former is mainly the result of reducing electrical and management costs, as a result of scale. The latter mainly refers to the continuous decline in chips’ power consumption ratios. From CPUs, GPUs, and FPGAs, chip manufacturing has eventually evolved into ASICs.
Mining Machines’ Main Performance Parameters
The most important technical indicator when measuring the performance/price ratio of a mining machine is the power consumption ratio, which is generally expressed by W/TH (Watts/terahash), representing the power cost of performing 10¹² hash operations. There are usually two ways to reduce the ratio. One is to optimize each part of the existing chip production process. The effect of this method is limited. The other, more fundamental solution is to reduce the width of the wire connections between triodes on the chip. In theory, the finer the width, the lower the power consumption, and the better the performance will be. However, the width is also limited by physics. The smaller the width, the more significant quantum effects become, making manufacturing much harder.
Potential Market Impact
Antminer S9, Bitmain’s current flagship product, first went on sale in June 2016. This mining machine, independently developed by Bitmain, uses 16nm chip BM1387. The initial computing power of Antminer S9 was 11.85T, and its power consumption ratio was about 100 W/TH. At that time, it was the lowest power-consumption chip in Bitcoin mining history, which directly laid the foundations for its near-monopoly position in the market.
In the more than two years since the S9 was released, however, Bitmain has not introduced any new mining chips, except for optimizing the S9’s computing power to 14.5T. Such a gap is rare for a leading company in a fast-growing industry. With competitors chomping at the bit, it needs to respond with new products as soon as possible in order to maintain its current market position.
The development of the mining industry can be compared to what the Red Queen said in Through the Looking-Glass: “It takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”
