The crypto mining hardware industry is still dominated by a few players because the sector needs an innovative approach for new players, the CEO of Canaan, the second largest designer and manufacturer of Bitcoin mining machines globally has said.

Nangeng Zhang notes that with innovation being the cornerstone of any industry – with the Bitcoin hardware manufacturing sector not any different, the sector’s capacity of resilience starting from the invention of ASIC-based Bitcoin miners in 2013 till this day amid ongoing change to meet the industry’s needs cannot be overstated.

“The crypto mining hardware business necessitates a strong understanding of various sectors, combining industry know-how and academic research in areas such as software engineering and semiconductor development,” he said. “With this in mind, an innovation-based approach to development as well as a strong network of partners — established over the years — are both crucial to success.”

Despite a supposed declining interest in the mining process for individuals and small miners, the crypto mining industry generated an estimated $522 million for Bitcoin miners in November alone. It begs the question of the relevance of ASIC-powered Bitcoin mining equipment in today’s crypto mining environment.

Zhang points out that amid Bitcoin’s rapidly increasing prices – recorded a new all time high late last month, mining profitability has seen an uptick in recent months. He added that investment in ASIC-based mining machines — be it newer or older models on the market which can be reused — can still yield profits thus signalling a positive sign for the mining sector’s recovery. He said:

“While there are mining machines for other altcoins on the market, such as those specifically for Ethereum or GPU-based mining machines, ASIC mining machines continue to dominate. As the very first blockchain network, Bitcoin has seen the longest development time among all cryptocurrencies and the most users over the years. As a whole, it attests to the credibility of Proof-of-Work (PoW) as the most tried and tested consensus model in the past decade. With PoW essentially as a measure of proof of computing power, ASIC mining machines are poised to address this ever-increasing demand for power, due to their ability to offer the greatest computational efficiency. Over time, it’s my view that as the Bitcoin mining space continues to mature, ASIC mining machines will continue to play a role as the underlying foundation for all mining hardware technologies.”

As the underlying function that drives the Bitcoin network, mining plays a crucial role in the development of Bitcoin as an asset. He didn’t say if the mining sector contributed to the current rise in the price of Bitcoin but opines that many variables might have been responsible though the mining industry’s maintained support for the stable operation of the Bitcoin network has remained unchanged over the years. He adds:

“As a whole, the value of Bitcoin is that it’s irrevocably changed people’s perceptions and expectations of the global financial system. With the promise of enabling greater financial access and equitability, Bitcoin arguably represents a re-shaping of the future of the monetary system. However, this belief equally needs to be reflected across multiple levels of society — be it in terms of progressive regulatory recognition or commercialisation as an endorsement. A clear example of this would be PayPal’s move to allow users to be able to buy, hold and sell cryptocurrency directly from their accounts while enabling its network of over 26 million merchants to tap into crypto as a funding source.

“This is a promising move forward and it’s only just the beginning. As the mining industry continues to mature and as the computing power of the entire Bitcoin network continues to grow, we can hope to see ongoing sustainable levels of stability. This would provide the much-needed assurance that Bitcoin is primed for more commercial applications and transactions.”

He notes that Canaan looks to promising new overseas markets across Central Asia, Europe, and the United States where they plan to engage in potential partnerships with local businesses there to build up a global network as his company promotes the ongoing research and development of advanced mining machines distinguished by greater cost- and power- efficiencies.