Mao Shixing, the co-founder of one of the largest mining pools in the world, F2Pool believes the future is bright for mining businesses and sees the mining industry eclipsing only mining services as the demand for computing power exponentially increases.
Crumble in the Mines
Last year was not a favorable year for miners, both for individuals and large pools. Bitmain, the largest manufacturer if bitcoin miners in the world found itself in a quagmire of losses in the latter quarter of 2018, and had to swiftly move to cut off some of its expenditures, laying off a good percentage of its staffs.
Bitmain which saw a respectable revenue rake-in of $3 billion in the first six months of 2018, barely made more than $200 million in the latter part of the year, a return which affected it significantly. The company was not alone in the mining industry, as graphics card largest manufacturer, Nvidia lost millions and saw its shares take a plunge after crypto miners shut down mining machines amidst overbearing costs.
A lot of crypto miners across the world complained of marginal costs exceeding their income, and shut down mining operations to cut out their losses. The decreasing hashrate and reduction in price, of course, did not help matters too.
Mining Revolution in China
Regardless of the general slump, some mining pools in China are weathering the storm out and sticking to their guns. With one of the cheapest electricity rates in the world, the majority of the world’s bitcoin mining takes place in China. However, the cheap cost of electricity in China does not mean miners cannot lose investments and be in debts. Shixing confirmed that about 600,000 to 800,000 bitcoin miners in the world shut down their operations due to the bear, and rising costs of cryptocurrency mining. The founder said:
“The electricity costs in China are between 0.26 RMB (.04 USD) and RMB 0.38 (around .06 USD) per kilowatt. This is only the cost of electricity itself, not including other mining costs like labor.”
According to Shixing however, confidence is gradually being restored in the mining industry thanks to the increasing price and also increasing hashrates.
Computing Power Moulding the Future
The co-founder of F2pool in response to the sustainability of the mining industry predicts computing power services that F2pool currently provides exceeds mining activities and points out that the need for increasing computing power is increasing exponentially, especially in a world that is gradually becoming dependent on Big Data and Artificial Intelligence.