Will Crypto Miners Equipped With 16nm Chip be Knocked out After Bitcoin Halving?
The fate of a mass of outdated crypto mining machines will be rewritten after the bitcoin block rewards being reduced from the current 12.5/block to 6.25/block as the halving comes.
Many crypto miners in China holding old mining machines, in the face of the increasing difficulty of mining and the shortage of 7nm machines, are hoping for the price pump after bitcoin halving and the low-cost power in the upcoming wet season in southwest China.
So, what is the current situation of the last-generation 16nm miners? Will the wet season in southwest China rescue the outdated 16 nm miner? How can the old miners minimize the loss of the ‘disaster’?
Surrounded by formidable competitors
According to the latest data of f2pool, by March 3, 2020, machines with 16nm chip Whatsminer M3, Avalonminer A741, EBIT E9+, Antminer T9+ have reached the shutdown price in accordance with the output of 0.00001624btc/t/day by electricity charge of 0.38 Chinese yuan/kWh.
Among the machines equipped with a 16 nm chip, only Antminer S9 series are struggling to survive, as the proportion of its electricity cost has reached 92%.
According to a survey of the third-party evaluation agencyTokenInsight at the end of 2019, more than 25 machines need more than 700 days to cover the cost under the difficulty of mining at that time among 43 machines of major Chinese crypto miner makers including Bitmain, Canaan, Whatsminer, EBIT and Innosilicon.
If take the 540-day life of ASIC miner into consideration, nearly 58% of the miner will not be able to cover the cost. Without exception, all of them are equipped with 16 nm chip.
Moreover, the rapid delivery of high-performance mining machines with 7Nm and 8nm chips since the beginning of 2019 pumps the computing power and difficulty of the whole network, reaching the historical highs of 123EH/s and 15.3T respectively. And the birth of 5nm chip with more powerful performance intensifies the competition. As Bitmain’s 5nm chip testing succeeded, Canaan will also follow Bitmain’s pace, becoming the world-second crypto miner maker to be equipped with the 5nm chip in Q1 2020, according to 8btc’s previous report.
When asked about the proportion of high-performance miners equipped with 7nm or 8nm chip in the whole network, Jiang Zhuoer, founder of BTC.top said.
That is to say, it only took over a year for the new-generation mining machines to reach 40% of the whole computing power. As the domestic coronavirus gradually gets controlled and the resumption of mining machine manufacturers, 7nm mining machine will be delivered quickly, the hash rate and mining difficulty will be pushed up again. At that time, the profit margin of 16 nm miners will be further reduced.
Is the elimination of 16nm miners after halving inevitable?
It may be a good solution to export updated mining machines for cheap electricity. In early February, Barry Silbert, founder of Grayscale Investments, the world’s largest crypto assets management company, said:
“What I’ve seen recently, perhaps in the past three to six months, is a real shift that’s happening that a lot of bitcoin mining is trying to move to the United States and Canada outside of China.”
Compared to the thermal power cost of over $0.06/kWh in China, an average electricity rate of $0.03/kWh in some central Asian countries like Kazakhstan and Uzbekistan is attractive for Chinese miners, according to 8btc’s previous report.
Taking newly Antminer S17 pro as an example, when the cost of the miner and the mining farm remain unchanged, the daily gross profit of the machine is 37.85 Chinese yuan as the electric charge is 0.4 Chinese yuan/kWh. While the gross profit increase to 47.81 Chinese yuan when the electricity fee is 0.19 Chinese yuan/kWh, about 26% increase.