More Chinese Bitcoin Miners Turn to Whatsminer for High-Powered Machines
Bitcoin mining farms in China have been phasing out their machines with the latest high-powered ones, mostly from Whatsminer instead of Bitmain, according to local miners.
As the bitcoin halving draws near which could drive the increase of mining difficulty, fewer mining machines delivering low hashrate will be able to continue for lack of profitability. Miners have to make the choice – to mine with new high-powered machines, or struggle with their old models.
For most Chinese miners whose electricity rates are in the 0.35 yuan – 0.37 yuan (around $0.05) range, they have already been replacing those inefficient machines with top mining rigs since September when rainy season comes to an end.
As a result, the bitcoin hashrate and mining difficulty saw another spike even after the end of the wet period (usually lasting from May to October) in southwestern China and the price of bitcoin dropped to a low around $6,500 at some time. Thanks to the running of these high hashrate machines, the hashrate of the entire bitcoin network has been keeping in the 85-100 EH/s range since September.
The old gives place to the new
Wang Chunlei (pseudonym), a bitcoin miner reseller based in Sichuan, a mountainous province in southwestern China known as the “capital of bitcoin mining” for it produces 50% of global hashrate, said he has sold 30,000 outdated mining rigs from August to December.
“In November, I sold 7, 000 units of 14.5T S9j, of which the first batch was sold at 800 yuan ($113) per unit, while the second batch of the same model sold for 690 yuan ($98) merely days later.”
Zhang Jun, who runs a medium-sized bitcoin mining farm in Yunan (neighboring Sichuan), told us that Bitmain had just phased out 10,000 14.5T S9j from one of its mining farms in Inner Mongolia to the second-hand markets, sold at the price of 700 yuan ($100) per unit.
A new round of reshuffle
According to his observation, 70% of rigs in mining farms are new and high-powered, among which Whatsminer accounts for nearly 50%, Antminer takes up about 16.7%, and the remaining 33.3% is split by Innosilicon, Avalon and Ebit miners.
Prior to it, Bitmain had been dominating the market with a 70% market share thanks to its flagship S9 models. While the company seemed to be unprepared for the turnaround of the crypto market in April. Its shortage of production capacity drives lots of its clients to turn to other producers.
According to previous local reports, Whatsminer has racked in 6.7 billion yuan (roughly $1 billion) from miner sales this year. Investors of the company confirmed that and disclosed that its market share has been about three times of Antminer. That might have irritated Bitmain’s Micree Zhan to fight back by suing its founder Yang Zuoxing of allegedly intellectual property infringement.
Based on the current bitcoin price at $7,438 and the hosting electricity price at 0.36 yuan ($0.05), Whatsminer’s 70T M20S model could generate $6.16/day with the payback period being 318 days, by comparison, Bitmain’s most profitable 64T S17e has a daily profit of $5.86.
The upcoming bitcoin halving is pushing miners to upgrade their machines with high-powered machines. To grab the market share of millions of high-powered mining rigs in the next 4-5 years after the halving, the competition among these major players is just beginning.