4 companies control the Bitcoin Mining industry
A published today the annual report of the token insight forecasts that by the end of 2020, 98 % of the market share of the Bitcoin-Minener of only four companies will focus. It is estimated that Bitmain, MicroBT, Canaan and Ebang will displace the Rest of the competition by a further 3 per cent on their current combined market share of 95 per cent.
Johnson Xu, an Analyst at token insight, describes that the increased market share was due to a network effect. He explains:
The four leading companies have had in the past always a strong market; in the future, makes this a strong market in the dominant positions of the four leading companies are reflected.
He said that you will not find too much competition from elsewhere, because the Miner hardware industry has a barrier to such a high entrance fee. Companies need to spend a lot of money for research and development, as well as for the global logistics and Marketing, in order to survive in it.
In the report token insight forecasts that the market share of Bitmain from 55-58% in 2019, to 63% in the year 2020, and the Canaan of 10%-15% in 2019 to 18% in the year 2020.
The optimistic estimate of the report on the future of Bitmain based on the fact that the estate was cut off by the end of business the area of AI, said Xu. He said this was due “to the high cost and low profitability”.
As soon as Bitmain consolidated its resources and his business has better restructured power market share due to its market and its brand image rise
, he said.
Xu noted that the forecast of tokens insight on the increase in the market share of Canaan is attributed to a successful IPO in the year 2019, the “will directly lead to a greater awareness of its brand identity”.
The market share of MicroBT a decrease of 20-25% in 2019, 10% in 2020. The arrest of the MicroBT-founder, have damaged the brand image of MicroBT, said Xu, which is why the report estimates that the market will shrink in proportion.
Bitcoin Halving and the effects
The report also predicts that there will be after “halving” of Bitcoin Cloud-Mining-products – when in the middle of may 2020 is halved, the supply of Bitcoin that will be issued as a reward for the Miner. This is due to the fact that Cloud Mining-buy products, “easy”, if you want to learn more about the mining industry, and that they are “barrier-relatively low entry than the actual Hardware manufacturers,” said Xu. The customers only need to rent Cloud-Mining-Pools, and those who operate Cloud-Mining-Pools, need to buy the miners only – and not brand-new build.
Xu also believes that the outbreak of Coronavirus, the epidemic that swept through China, infected tens of thousands, hundreds killed and the country’s economy to a standstill brought – “certainly impact on the Bitcoin-mining operation will have”, especially in the first half of the year.
The Virus has already closed some of the miner locations, and Xu expected that the producers of Mining Hardware will delay the delivery of a new Miner. He added that the companies in the industry to delay their working hours or to work remotely, in order to protect the employees against the Virus.
If the Coronavirus is from the uprooted, the economy of the Bitcoin-Ming, in the end, this could trigger a unexpected gap in the Mining industry. Since two-thirds of the Hash Rate in China is concentrated, this could be for the wider crypto-economy is destabilizing and the theory of the “safe Harbor” to the test.
