Bitcoin Mining Unit Manufacturer MicroBT Nibbles at Bitmain’s Market Share

Bitcoin miner maker MicroBT has rapidly expanded market share by selling over half a million units in 2019, chipping away at rival Bitmain’s dominance.

MicroBT sold about 600,000 units of its flagship WhatsMiner M20 series last year, Vincent Zhang, sales head of the Shenzhen-based company, said in an online panel hosted by Chinese mining pool Poolin on Thursday in a WeChat group.

These products generate a computing power of about 60 terahashes per second (TH/s) on average, he said. That means the newly delivered 600,000 units may have contributed over 30 exahashes (EH/s) of hashing power to the bitcoin network in 2019. (1 EH = 1 million TH).

Amid bitcoin’s price jump throughout 2019, the network’s two-week average computing power more than doubled from just 40 EH/s around the end of 2018 to nearly 100 EH/s in December. That’d mean close to half of bitcoin’s computing power growth in 2019 may have come from equipment delivered by MicroBT.

Zhang didn’t specify the precise average unit price of these batches, as they could fluctuate depending on bitcoin’s price over the year. But the firm’s various models in its M20 product line are generally priced between $24 to $30 per terahash, meaning the firm has brought home a high nine-figure revenue in U.S. dollars for 2019.

Bitcoin’s current computing power stands at 110 EH/s. That also means MicroBT may account for around 30 percent of bitcoin mining power sold right now, making it one of the largest and fastest-growing miner makers in the world.

Situation in flux

Meanwhile, crypto research firm Coinshares estimated in a report on Dec. 12 that Bitmain’s dominance of sold bitcoin hash rate was about 65 percent at the time, already down from 75 percent in 2018.

But this number may already be slightly outdated as bitcoin’s computing power has since then grown by yet another 20 percent, jumping from 92 EH/s in mid December to about 110 EH/s at the moment.

Hangzhou-based Canaan Creative, maker of the Avalon miner, which went public in the U.S. in November, estimated in its IPO filing that it accounted for around 20 percent of bitcoin computing power sold for the first six months of 2019. The firm has yet to release its full-year results.

That said, Bitmain’s mining equipment still dominates the market, resulting from the successful sales of its AntMiner S7 from 2015 to 2016 and later its S9 model from 2017 to 2018.

According to Bitmain’s IPO filing in September 2018 in Hong Kong, the firm delivered about 500,000 bitcoin miners in 2015 and 2016, and further sold 3 million units from the beginning of 2017 to June 30, 2018, amid the crypto market’s bull run.

Halving looms

While S9s – with an average 14 TH/s computing power – are still the most widely used miners, they are facing an increasing risk of becoming obsolete as bitcoin’s halving event approaches in May, which will reduce bitcoin’s mining rewards from 12.5 bitcoin per block to 6.25.

CoinDesk reported earlier this month that mining farms have been procuring the latest and most powerful miners to expand their facilities or replace older models in preparation for the upcoming halving.

While Bitmain its latest AntMiner S17 series last year to rival MicroBT’s WhatsMiner M20 product line, the latter has significantly outrun Bitmain in terms of mass production and shipments.

The two firms are also racing to deliver even more powerful machines in 2020 ahead of the halving event, namely, the AntMiner S19 and WhatsMiner M30. That said, the actual production quantity of these products still largely depends on the supply of wafers from semiconductor companies such as Samsung or TSMC, which, according to Zhang, is “very limited.”

Coronavirus’ impact

Meanwhile, as the coronavirus outbreak in China delays manufacturing and logistics, bitcoin’s computing power growth has stagnated for the time being. In fact, data from mining pool BTC.com estimates that bitcoin’s mining power is poised to decrease by 1.78 percent in about eight days.

Zhang said in the WeChat group that MicroBT has resumed its production.

“Currently, part of the logistics has also gone back to work. … So now the supply of miners is not a big issue but not every mining farm is physically accessible,” he said.

“Large scale of investments may be affected because investors may not be able to do physical due diligence on facilities,” Zhang said.