In recent years, the cryptocurrency mining sector has gained increasing financial momentum. For example, market research firm Technavio recently released astonishing data that the global mining hardware market is projected to grow by a whopping $ 2.8 billion between 2020 and 2024. This astonishing increase is due to the growing popularity of mining clusters, most of which are currently concentrated in China.
Additionally, companies like Btc.top have been trying in the past few months to redefine the concept of Bitcoin (BTC) acquisition, for example using a technology called “co-mining” that allows users to remotely mine cryptocurrencies. By purchasing a certain amount of retail electricity from a third party. According to Btc.top, the new technology will help mitigate many of the risks currently associated with popular cloud mining products by giving users more financial and operational flexibility.
Jiang Zuor, CEO of Btc.top, told Cointelegraph that the company will make it easier for individuals and institutional clients to participate in cryptocurrency mining because of the company’s “infrastructure, strategic industry partnerships and low electricity tariffs.”
The concept of co-mining is not entirely new
Although the use of Btc.top for co-mining is hailed as an important step forward for the crypto mining sector, it should be noted that many local miners and companies in China are already using this business model. One of the main advantages of using this service tire is that cheaper electricity can be obtained. In addition, profits are based on the ASIC model and farm efficiency – while the subsidized leverage for revenue is risk and profit sharing. Thomas Heller, Global Business Manager at F2Pool Mining Pool, commented on the topic to Cointelegraph:
Many of these types of mining operations are located in the Sichuan region of China, where hydropower is abundant. However, one of the downsides is that Sichuan is prone to many natural disasters like earthquakes and floods. “”
Additionally, it should be noted that Btc.top is currently charging its users around $ 0.033 per kilowatt hour to make their mining easier. However, it appears that electricity costs can continue to fluctuate dramatically during the rainy season in Sichuan – the closed province in southwest China where the company owns its farms. This is important because users will be billed for the electricity their devices use for the entire duration of the program according to a pre-defined contract. Although this model seems profitable due to lower electricity prices, such inconsistencies are always present for any miner working in this field.
In response to the above concerns, Zhuoer said his company started a mining service in China in March, long before the rainy season cut electricity prices. He also added that most of Btc.top’s customers in China are large miners who are already enjoying the benefits of subsidized energy prices, adding, “After the end of the rainy season, which is expected to be in October, these prices are up probably where it was in March, which is already some of the lowest even for industrial-scale miners. “”
Continued dominance of the Chinese market?
It is unlikely that China will lose its current dominance – in terms of retail trade rates – in at least the next few months due to the prolonged wet season in Sichuan. Although the United States, and Texas in particular, saw significant growth in their existing mining infrastructure, Heller does not expect the same speed and ease of growth that has been achieved in China. Once the hydropower season is over, some miners will move from China to the United States, Kazakhstan and the Middle East, where electricity prices are cheaper.
However, Didar Bekbaov, founder of the Xive Energy Mining Market, added that recently, more and more traditional investors are moving into mining in countries like the United States, Canada, Russia, and Kazakhstan. In his opinion, “The only way anyone can compete with China in the next five years is in software and services. Hardware is out of the question.”