The financial services and technology business Block, which is controlled by Jack Dorsey, has just finished the prototype design of its new 5nm Bitcoin mining chip. This was done with the intention of decentralizing the supply of Bitcoin mining rigs. The business noted that the development of Bitcoin mining ASIC rigs is both financially and technically hard, which has led to an excessive concentration of the ownership of specialized mining silicon in the hands of a few number of enterprises. It is believed that miners and the Bitcoin network as a whole would suffer from the negative effects of this concentration.
In response, Block intends to make Bitcoin mining technology open source wherever it is feasible by selling standalone ASICs and other hardware components. This move is intended to enhance the size of the Bitcoin mining hardware ecosystem while also maximizing the amount of innovation that may occur inside it. Because of the actions taken by the firm over the previous few months, it will now be able to experiment with new designs, which will help the company bring Bitcoin mining chips to market that are both more efficient and less expensive.
As a means of accelerating this development drive, Block has made a significant purchase of ASIC chips from Intel, prompting the latter to stop accepting new orders for its Blockscale 1000 Series ASICs. This move was made in order to shorten the development cycle. Block expects that by purchasing these ASICs from Intel, it would be able to speed up the development of its own 3nm chip, which, upon its eventual release, the company says will be the most technologically sophisticated semiconductor to date.
The significance of ASIC development to the Bitcoin mining process is reflected in Block’s concentration on the development of these devices. ASICs are computerized devices that are tailored to accomplish a particular computational function. They are commonly used for mining proof-of-work cryptocurrencies like Bitcoin, which need a specific computational task to be completed. When individual components of a chip get smaller, it becomes possible to pack more transistors into a silicon die of the same size. This results in increased overall efficiency and a reduction in the amount of heat that is generated.
Although 5nm ASIC chips have been available for some time, the first 5nm ASIC was not released until 2021 by the Chinese mining company Canaan. Despite this, no company has yet made the ASIC chip designs that they produce open source. It is anticipated that Block’s dedication to open source technology will have a substantial influence on the Bitcoin mining business. This will result in additional alternatives being available to miners and will contribute to the network’s efforts to become more decentralized.
Move-to-earn Web3 running app STEPN has partnered with ASICS to release a limited edition of “STEPN x ASICS NFT Sneaker” Mystery Box Collection.
The NFT sneakers collection was launched exclusively on the Binance NFT Marketplace and hosted on the BNB Chain.
The collection has been co-branded by STEPN and ASICS. Over 195,000 participants and subscribed tickets have been garnered so far for the collection.
ASICS is a manufacturer of performance athletic footwear, apparel and accessories.
While the total trading value has exceeded US$10 million, the floor price has been maintained at over US$3,000 for the collection.
STEPN, Binance and ASICS have jointly decided to donate $100,000 from the sale proceeds of the NFT collection to a charitable cause.
STEPN would reward users with crypto via its app for walking, jogging or running and to participate, a user must purchase an NFT and start either walking, jogging or running outdoors to earn tokens. It also allows users to either spend their earnings within the Web3 ecosystem or withdraw the amount to an external account and cash out a profit.
The company has soared in popularity since its beta launch in December 2021 and topped the US$1 billion dollar market cap. STEPN has also maintained a steady increase in user growth and engagement as the total app downloads have exceeded 1 million.
In theirDecember report, Marathon Digital Holdings announced their total BTC holdings. And assured their investors that they were not selling any of it any time soon. This is particularly interesting considering the company bought “a record number” of S19s in December. Reportedly, they got a giant loan using Bitcoin as collateral. An operation we’ll see a lot more in the near future throughout the industry.
The report quotes Fred Thiel, Marathon’s CEO, in a celebratory mode. “2021 was a transformative year for Marathon as we increased our hash rate 1,790% and increased our bitcoin production 846% year-over-year to 3,197 self-mined BTC.” Staggering numbers that show the size of the Bitcoin mining business.
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As for their plans, the report says:
“The Company last sold bitcoin on October 21, 2020, and since then, has been accumulating or “hodling” all bitcoin generated. As a result, Marathon currently holds approximately 8,133 BTC, including the 4,813 BTC the Company purchased in January 2021 for an average price of $31,168 per BTC.”
Of course, they’re not alone. NewsBTC documented the trend throughout the whole year.
Most Miners Are Holding Strong
One of the first persons to spot the trend was Lex Moskovski. In February, the analyst reported on “the first day since Dec, 27 when Miners Position change turned positive.”
Approximately four months ago,NewsBTC used data to find a possible explanation:
“Data shows that miner profitability has dropped in comparison to the last time that bitcoin was at this price. The profitability for bitcoin back in April at $50K had been 40% higher than it is right now when bitcoin hit $50K again. This means that miner profitability is hitting the lows at all-time highs.
This drop in profitability has seen miners refusing to sell the BTC they are rewarded with for mining blocks. Instead choosing to hold these coins in wait for much higher prices.”
Miner profitability might be decreasing, but, the business is still a long way from turning red. Especially for a giant operation like Marathon. Ina recent interview that NewsBTCreported on, Fred Thiel said.
“Thiel expressed that, factoring operational mining costs (energy plus hosting), Bitcoin’s breakeven rate is roughly $6,500, meaning that the digital coin would need to drop at least 80% for Marathon to face challenging difficulties.”
Less than three months ago,NewsBTC reported on another set of datathat showed the same phenomenon:
“As pointed out by a CryptoQuant post, BTC miner reserves continue to trend sideways amid the coin’s strong move up. The “miner reserve” is a indicator that shows the total amount of Bitcoin that miners are currently holding in their wallets. An increase in the metric’s value suggests miners think the coin’s value will go up in the near future, hence they are stocking up on it.”
BTC price chart for 01/05/2021 on FX | Source: BTC/USD on TradingView.com
The Marathon Mining Company’s Future
The company’s recent billion-dollar investment is a play for the future. Especially considering just when those machines will arrive.
“On December 23, 2021, Marathon announced that it had entered into a contract with BITMAIN to purchase a record number of ANTMINER S19 XP (140 TH/s) bitcoin miners, all of which are currently expected to ship from BITMAIN between July 2022 and December 2022.”
The chip shortage is real, people. If an order this size can only be fulfilled in six to twelve months, something’s up. Also, by the looks of it, the ASIC manufacturing business might be even more profitable than Bitcoin mining.
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Bitcoin entrepreneur and podcaster John Carvalho might be on to something. Ina recent episode of the Tales from the Cryptpodcast, he posed his theory on why did China shot itself in the foot by banning Bitcoin mining early in the year. We at NewsBTC have been racking our brains trying to come up with possible reasons for the bizarre decision.
Are theymaking way for their CBDC? Is the CPCcutting the wings of Chinese Billionairesin all areas? Were they alreadylosing the hashpower battle? Is China having energy problems? Is thisan ESG issue? Were theyclosing the exit ramps before the Evergrandecollapse? IsBitcoin just too dangerous? Why would theyretire from a Billion Dollar Businessthat they controlled? Why? WHY?
It has been a long time since I last joined TFTC to chat.
I had a great time discussing misc Bitcoin and “good morning tweet” topics.
Check it out! https://t.co/TVbOEjHWFD
— John Carvalho (@BitcoinErrorLog) November 2, 2021
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The interviewee summarizes our position with one phrase, “I refuse to believe that China is stupid.” According to Carvalho, they’ve made too much money in the mining business alone, and they also control the ASICs manufacturers. Not only that, mining machines inflate the value of chips. And they control that business too, alongside Taiwan and South Korea. Why would they shoot the goose that laid the golden eggs? It just doesn’t make sense… unless…
Carvalho’s Mind Blowin Theory
Warning: the following text is full of speculation and assumptions. “I can easily be wrong,” was one of the first things Carvalho said. He doesn’t have any proof that this is what happens and neither does NewsBTC. Let’s take it as a thought exercise. This is how Carvalho would “play the game,” though. And if he could come up with that plan, so did the CCP leaders.
According to Carvalho, every cycle China manipulates the Bitcoin price to get more BTC. They sell, use the collateral to short Bitcoin, and reaccumulate when the bear market arrives. This time, though, China was facing a more mature and sophisticated market. Their FUD techniques were not working. People weren’t falling for their tricks. So, they had to turn it up a few notches.
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The main ASIC manufacturer, the Chinese company Bitmain, had a new generation of miners ready. So, the CCP “decided to create a demand for the aftermaket and combine it with the FUD.” As they usually do, they sold their Bitcoin and made their shorts. Then, China banned Bitcoin mining and the whole country turned off the ASICs. The world perceived the ban as real, just “look at the hashrate.” This is the first time this happens. Then, China sold a small portion of its ASICs to the USA.
According to the latest stats, the USA now provides the biggest percentage of Bitcoin’s hashrate… or does it? “Everybody has this narrative where China has stupidly left mining and giving it to the US,” Carvalho said unconvinced. A few months after the China ban, American mining companies are suddenly on everyone’s radars. But, is this really what’s going on?
If The Theory Holds Up, China Will Come Back To The Mining Game
This is price manipulation on another level. China figured out a way to get more Bitcoin both against traders and against buyers of ASICs in outside countries. They got rid of the old equipment, and Bitmain will provide new machines soon enough. Then, China’ll buy back their Bitcoin, and turn their next-gen ASICs on. According to Carvalho, maybe they already did, and they’re just not signing blocks or signing their blocks differently. If this is true, they’ll unban Bitcoin mining soon enough, and spin a “the resurrection of Asian mining” narrative.
The Tales From The Crypt host, Marty Bent, is not convinced. He argues that we have to separate CCP from the individual Chinese miners. It’s worth noting that Bitcoin mining is Bent’s field of expertise. He is himself a miner and is involved with some mayor Bitcoin mining companies.
According to Ben, there definitely have been mining farms that operated in mainland China and moved to the US. And sizable operations, at that. He thinks that maybe the Chinese didn’t move all the hashrate to the U.S., but they definitely moved “a material ammount.” He also believes that, even after the ban, there’s definitely hashrate still in China.
According to Carvalho, there’s anecdotal evidence that contradicts the theory, but it’s only anecdotal. “We don’t have enough information about China,” he says. Bent agrees and adds that, due to the permissionless nature of the Bitcoin network, we can never truly know what’s happening. However, “foreign buyers are getting access to new gen miners.” At least to the preorders. Take that for what it’s worth.
BTC price chart for 11/08/2021 on Bittrex | Source: BTC/USD on TradingView.com
Conclusion And Other China Theories
According to Carvalho, using web traffic measuring tools, you could check that traffic to the Chinese mining pools is roughly the same as before the ban. The signing of blocks is manipulatable. “The only reason we know who mines what is because they say they mined it,” he says. What does this mean? Are the Chinese already mining with? Is there an increase in unsigned blocks? Or are they just signing them as non-Chinese entities? They could’ve been planning this for a long time, setting the pieces in place.
The TFTC host poses an alternative theory. This one’s based onhis conversation with Edwar Evenson from Braiins, who lived in China. According to Evenson, this year marked the 100th anniversary of the CCP, and the theme of the celebration is “harmony.” And, sadly, they consider Bitcoin mining as unharmonious. That’s the reason they banned it. Once the anniversary passes, they’ll quietly allow it back.
Maybe, but according to Carvalho, the Chinese quietly returning to mining is exactly what would happen if any of the two theories are true. He admits that, to confirm his theory, serious research that he can’t perform needs to be done. So, he leaves it open to the public to step up and do it. NewsBTC did its part by publishing this article. It’s your turn now.
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