The Corona disease outbreak in China could have a long-lasting impact on Bitcoin network mining at a time when computing power is estimated at 65%.
Although Chinese miner manufacturers are aware of the increased demand for new equipment before the halving time in May 2020, they estimate the epidemic could limit the growth of Bitcoin mining power if the situation does not. be resolved in the near future. According to Kevin Shao, general manager of Canaan Creative's blockchain branch, it is difficult to expand or produce new machines.
He thinks the miner can maintain the current level of computing power, but still lacks new mining machines.
So far, almost every Bitcoin miner manufacturer in China (Bitmain, Canaan, MicroBT and InnoSilicon) has delayed production and delivery. Bitmain and Canaan are the world's two leading mining tool manufacturers, announcing their post-sale service postponement until February 10.
Meanwhile, customers are eagerly waiting to receive a new, leading mining model to expand existing mining facilities and replace old machines in preparation for the Bitcoin halving event expected to occur on. May 2020.
"One of the business activities most affected is the production of mining machines”, Abe Yang, executive director at PandaMiner said.
Founded in 2013, the Shenzhen-based company produces mining machines and provides computing services with 9 mining farms.
"Not only us, most manufacturers miner has been affected by plant disease Their headquarters are in cities like Dongguan and Shenzhen in Guangdong province. During the holiday, it lasts until the 10th/2, almost the entire production operation are paralyzed, " Yang said.
Meanwhile, the blockade of Wuhan city has a direct impact on InnoSilicon, as its headquarters is located at the outbreak of a disease outbreak.
“TThe current delay does not affect these work because of time extension A few days off. However, if Disease continue prolonged longer, maybe things will be different ", Shao said.
According to data from BTC.com, the difficulty of mining Bitcoin is a measure of the difficulty to compete the mining reward on the Bitcoin network, having increased by 6.57% and 7.08% respectively on January 2 and 15 / first.
The growth rate decreased to 4.67% on January 28 and is estimated to decrease to only 3% in the next 3 days. Bitcoin mining difficulty adjusts every 14 days - increasing or decreasing positively correlates with more or fewer participants competing online.
"The time of Corona virus outbreak coincided with the Bitcoin halving event. These force majeure factors are obviously affecting the maintenance as well as the supply of new mining equipment. Therefore, recovery of Bitcoin hashrate growth will be delayedWang Xin, marketing director of producer WhatsMiner, said in an interview.
Demand increased
The hash power has more than doubled from about 50 EH / s over the same period last year when the Bitcoin market price exceeded $ 9,000.
"Miner Smost econd-hand was Older models like Bitmain's AntMiner S9 are aimed at approx time help Faster payouts now carry a greater risk when they enter the outage phase first halving shelf, compared to more powerful new models like WhatsMiner M20 or AntMiner S17MicroBT's Wang said.
Based index f2pool's profit, models like the most widely used AntMiner S9 will have a 30% profit margin with Bitcoin's current price and $ 0.05 of electricity cost per kWh.
However, the lower number of new miners may be good news for those who have invested in active equipment.
According to Canaan Shao, the current miner has a more stable mining reward because there won't be many competitors entering the market due to the lack of new mining machines.
But he added that the disease will affect existing mining companies in that the supplier of the mining machine cannot provide timely after-sales service to repair the equipment.
Logistics problem
Wang said assembly plants have delayed business schedules, citing the Chinese government's extension of the Chinese New Year. Domestic businesses were ordered to close until at least February 10.
This is also not the only problem that occurs in the cryptocurrency world. Reuters reporting on Monday that iPhone sales could be affected by the Corona virus, if a health emergency cannot be prevented in the near future.
Shao said one of the company's concerns is to slow down logistics operations. In addition, "while we can implement all plans to cope with the disease, logistics is something we cannot control."
Local infrastructure currently prioritizes distribution of supplies and supplies to people infected with the virus instead of less important delivery activities.
As a result, some customers who have pre-ordered may not receive the device on time and may have to wait longer if the disease continues.
Even if all employees return to work, they cannot assemble the miner if the supplier does not deliver the necessary parts.
"If the supplier does not ship the parts on time, the miner manufacturer cannot assemble the production either."
As such, companies can take advantage of inventories to run their own machines that provide computing power to customers without actually selling them if they have the parts needed to complete the assembly. .
"However, the service is not sustainable if the disease continues to break out because we will eventually reach maximum capacity without new machines, resulting in a lack of computing power.”, According to Yang.
Farm operators
Mining farms remain unaffected for the time being, but a prolonged outbreak will cause serious damage.
Yang asserted that PandaMiner can maintain operations for its existing farms, but will significantly delay the construction of the new farm.
Two-thirds of the company's employees did not come home to celebrate the Chinese New Year and instead were working in the mining areas. However, for those who have gone home, it will take several weeks to return to work.
Many cities now require a 2-week quarantine for people returning from other areas before starting work.
For example, the Xinjiang Autonomous Region has many mining farms due to cheap electricity prices that have implemented stringent policies to quarantine not only returnees from Hubei and Wuhan provinces, but also any province, any other region.
"We ask staff to return to Xinjiang as soon as possible to get started Isolate 2 week and embarked on work job”.
The company's mining farm in Guizhou is subject to stricter policies, allowed for employees to work on site and can only keep a few to maintain operations.
Sichuan Province, which controls more than 50% of Bitcoin hashrate, also requires a 2-week quarantine.
Yang complains that the lack of on-site staff has negatively affected the operation of the mining farms.
It is the staff's responsibility to ensure that the mining machines are connected to the Internet and have a stable power supply. Staff will also repair the broken circuit board and other hardware to keep it running.
"We usually have at least 10 employees to maintain a mining farm. With with very few employees, we can hardly keep as many machines running as before”.
According to Yang, in some extreme cases when the local government banned all employees from working on site, the company needed to negotiate with the government for two or three people to work.
Minh Anh
Bitcoin Magazine | Coindesk
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