{"id":18823,"date":"2019-12-30T18:21:57","date_gmt":"2019-12-30T18:21:57","guid":{"rendered":"http:\/\/ci027cfe66501026c3"},"modified":"2025-01-27T20:56:06","modified_gmt":"2025-01-27T20:56:06","slug":"hashing-ahead-look-bitcoin-mining-2020","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/business\/hashing-ahead-look-bitcoin-mining-2020","title":{"rendered":"Hashing Ahead: A Look at Bitcoin Mining in 2020"},"content":{"rendered":"<div id=\"bsf_rt_marker\"><\/div><figure><img decoding=\"async\" src=\"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/01\/hashing-ahead-a-look-at-bitcoin-mining-in-2020.jpg\" title=\"\"><\/figure>\n<p>The December 2019 report on the Bitcoin mining network from <a href=\"https:\/\/coinsharesgroup.com\/assets\/resources\/Research\/bitcoin-mining-network-december-2019.pdf\" target=\"_blank\" rel=\"noopener\">CoinShares Research<\/a>, a division of the digital asset management firm, presented an industry in good health at the end of the year, with a hash rate that had almost doubled in the previous six months, a new generation of more powerful and efficient technology on the market and the continued use of sustainable, renewable energy.<\/p>\n<p>The report indicated that, at this year\u2019s average bitcoin price, fee ratio and block frequency, miners were on their way to making $5.4 billion in total revenue for 2019, down slightly from 2018, but significantly up from $3.4 billion accrued in 2017.&nbsp;<\/p>\n<p>\u201cUnlike the period leading up to our previous report, these last 6 months have been relatively calm in terms of large-scale structural changes,\u201d per the report. \u201cWhereas the period between November 2018 and June 2019 witnessed a large number of bankruptcies and capital transfers, the development of the last 6 months has been mainly one of expansion.\u201d<\/p>\n<p>As the bitcoin mining sphere builds on this positive momentum from the end of 2019 and heads into 2020, factors like the increasing hash rate, new hardware, the <a href=\"https:\/\/www.bitcoinhalving.com\/\" target=\"_blank\" rel=\"noopener\">upcoming reward halving<\/a> and more will determine how the industry, and Bitcoin in general, grows.<\/p>\n<h2>Good News for the Bitcoin Mining Hash Rate in 2020<\/h2>\n<p>CoinShares reported a \u201chuge increase\u201d in the mining hash rate which nearly doubled in the last six months from approximately 50 exahashes per second (EH\/s) to almost 90 EH\/s, having peaked at more than 100 EH\/s.&nbsp;<\/p>\n<p>The report attributed this increase to a combination of the availability of a new generation of more powerful, efficient mining equipment and strong average bitcoin prices.<\/p>\n<figure><img decoding=\"async\" src=\"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2025\/01\/67_image-placeholder-title.png\" title=\"\"><\/figure>\n<p>And, even since the reports release on December 3, 2019, the hash rate has continued to climb.<\/p>\n<blockquote class=\"twitter-tweet\" data-width=\"550\" data-dnt=\"true\">\n<p lang=\"en\" dir=\"ltr\">Bitcoin hashrate putting in new ATHs, currently above 110 EH\/s.<\/p>\n<p>Halving less than 5 months away.<\/p>\n<p>I will be very surprised if things don\u2019t escalate in a big way going forward. <a href=\"https:\/\/t.co\/zOyLwTqVhU\">pic.twitter.com\/zOyLwTqVhU<\/a><\/p>\n<p>&mdash; hodlonaut (@hodlonaut) <a href=\"https:\/\/twitter.com\/hodlonaut\/status\/1209119756479021056?ref_src=twsrc%5Etfw\" target=\"_blank\" rel=\"noopener\">December 23, 2019<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>In a recent episode of the <a href=\"http:\/\/whatshalvening.btc.libsynpro.com\/ep-4-balancing-the-grid-with-chris-bendiksen\" target=\"_blank\" rel=\"noopener\">What\u2019s Halvening podcast<\/a>, CoinShares Research Director Chris Bendiksen discussed the increase in hash rate, particularly from Chinese operations, which he said accounted for almost 70 percent of the increase. China now accounts for 65 percent of the global bitcoin mining hash rate.<\/p>\n<p>Bendiksen noted that this increase in hash rate was largely the result of improved technology and, since most new mining computers are produced in China, Chinese miners were first in line in getting next generation technology upgrades.<\/p>\n<p>He expects that, as new technology filters into the Western market, the hash rate there will rise as well.<\/p>\n<p>He also noted that there were signs that as Chinese miners upgraded they were shipping their old Bitmain Antminer S9 mining hardware to places like Iran and Kazakhstan.<\/p>\n<p>Blockstream CSO Samson Mow, whose company has <a href=\"https:\/\/bitcoinmagazine.com\/articles\/blockstream-mining-a-grassroots-vision-for-redistributing-hashrate\">mining operations<\/a> in Quebec, Canada, and Adel, Georgia, agreed with Bendiksen\u2019s optimistic outlook for 2020.<\/p>\n<p>\u201cBitcoin\u2019s network hashrate will keep climbing as miners switch out older equipment with newer and more efficient models,\u201d Mow told <em>Bitcoin Magazine<\/em>.<\/p>\n<h2>Will China Continue to Dominate Bitcoin Mining in 2020?<\/h2>\n<p>As noted above, the CoinShares report indicated that \u201cas much as 65% of Bitcoin hash power resides within China \u2014 the highest we\u2019ve seen since we began our network monitoring in late 2017.\u201d<\/p>\n<p>Despite the growth of <a href=\"https:\/\/bitcoinmagazine.com\/articles\/bitcoin-mining-in-north-america-a-new-gold-rush-in-the-new-world\">bitcoin mining around the world<\/a>, in places like North America, Russia and the Middle East, China still dominates the industry. Some may view this as a concern, especially as the dominance appears poised to grow entering 2020, as it centralizes one of Bitcoin\u2019s most critical industries.<\/p>\n<p>For Mow\u2019s part, China\u2019s dominance is certainly something to note, but ultimately he believes it is \u201ca non-issue.\u201d<\/p>\n<p>\u201cI wouldn\u2019t be concerned about China\u2019s dominance in Bitcoin mining,\u201d Mow said. \u201cThe main advantages of mining in China are faster setup times and lower initial CapEx which, along with closer proximity to where ASICs are assembled, have driven industry growth there \u2026 Now that we have mining infrastructure built up in North America, like with Blockstream\u2019s mining operations and others, the CapEx advantages are less important, and we have the additional benefit of lower electricity costs.\u201d<\/p>\n<p>The CoinShares report noted that there has been a major \u201cpolicy switch\u201d on the part of China\u2019s government, going from listing mining as an undesirable industry as recently as April 2019 to removing mining from this list completely (although bitcoin itself is still illegal).<\/p>\n<p>Still, Mow does not see China\u2019s dominance as a priority issue for 2020.<\/p>\n<p>\u201cMining in China is still done by individuals and corporations, just as mining in North America or any other location,\u201d Mow said. \u201cAlso, the concept of \u2018Chinese hash rate\u2019 is misleading because there are non-Chinese individuals and companies mining in China, just as there are <a href=\"https:\/\/bitcoinmagazine.com\/articles\/bitmain-opens-50-mw-bitcoin-mining-center-in-texas\">Chinese miners in North America<\/a>.\u201d&nbsp;<\/p>\n<h2>How the 2020 Halving Will Impact Bitcoin Mining<\/h2>\n<p>For this article, <em>Bitcoin Magazine <\/em>reached out to a number of bitcoin mining industry leaders and CEOs about their priority issues for 2020. Several mentioned the upcoming Bitcoin halving (or \u201chalvening\u201d), expected in May 2020, as something to watch.<\/p>\n<p><strong><em>Further Reading: <\/em><\/strong><a href=\"https:\/\/bitcoinmagazine.com\/guides\/what-is-the-halvening\"><strong><em>What Is \u2018The Halvening\u2019?<\/em><\/strong><\/a><\/p>\n<p>\u201cThe halving is going to be the most impactful factor to mining in 2020,\u201d Andrew Kiguel, CEO of Hut 8 Mining, said. \u201cAll miners should be preparing for what happens and there are several possible outcomes. As the reward drops from 12.5 to 6.25 [BTC], less efficient miners will be forced to evaluate operations.\u201d<\/p>\n<p>Regarding <a href=\"https:\/\/bitcoinmagazine.com\/bitcoin-mining\/bitcoin-mining-hardware\">bitcoin mining hardware<\/a>, the CoinShares report indicated that \u201cgoing into the reward halving in the spring of 2020, older gear such as the venerable Antminer S9, which is still widely deployed in the network, will likely be approaching the end of its useful lifetime unless the price of Bitcoin rises dramatically, or indeed if more operators gain access to electricity around or below \u00a21\/kWh.\u201d<\/p>\n<p>The bitcoin mining hash rate will be affected as well. On What\u2019s Halvening, Bendiksen said that if the price of bitcoin stays about the same, \u201cyou will see a drawdown in the hash rate of 50 percent\u201d with some companies closing down. But if the bitcoin price doubles, then the hash rate will be back to where it was.<\/p>\n<p>When it comes to the halving and its impact on price, Mow remains optimistic.<\/p>\n<p>\u201cThis upcoming halving will see the daily supply of bitcoin drop from 1,800 to 900,\u201d he said. \u201cWith overall general awareness of Bitcoin being much higher, and exchange on-ramps being far more mature than four years ago, I\u2019d expect to see a price increase \u2014 if not exactly at the time of the halving, then in the months to follow.\u201d <\/p>\n<p>Ultimately, the halving will impact all primary indicators of bitcoin mining in 2020: the equipment used, hash rate and price. But the extent to which the mining industry is affected is still to be determined.&nbsp;<\/p>\n<p>\u201cWill the network hash rate drop significantly after the halving?\u201d Kiguel asked. \u201cI believe it will, as miners using older equipment will no longer be viable. Will the price of bitcoin rally in response to the halving \u2026 or is it already priced in? I think we will see a bump in the price, however, perhaps not as high as some are expecting. Perhaps a 50 to 100 percent bump from current levels.\u201d<\/p>\n<p>Naturally, the halving and its expected impact is top of mind for every significant bitcoin miner as 2020 begins.<\/p>\n<p>\u201cIn order to maintain current mining economics pre- and post-halving, BTC prices will need to increase substantially, or there will be a dramatic decline in network hash rates as higher cost miners unplug their hardware,\u201d Bitfarms CEO Wes Fulford said. \u201cBitfarms is well positioned to withstand any short-term volatility in mining economics based on our low cost structure, access to competitively priced electricity and new generation mining fleet.\u201d<\/p>\n<h2>Will Mining Technology Continue to Evolve in 2020?<\/h2>\n<p>Bendiksen noted on What\u2019s Halvening that the evolution of mining technology is continuing at a pace greater than ever as mining hardware companies like Canaan and MicroBT are competing more closely with hardware giant Bitmain.<\/p>\n<p>And as companies like <a href=\"https:\/\/bitcoinmagazine.com\/articles\/report-canaan-will-be-listed-publicly-in-the-us-in-november\">Canaan<\/a> and <a href=\"https:\/\/bitcoinmagazine.com\/articles\/bitmain-is-giving-its-ipo-another-go-this-time-on-u-s-soil\">Bitmain<\/a> apply for initial public offerings in the U.S., the hardware market will become even more decentralized in 2020. <\/p>\n<p>In its report, CoinShares listed the main players in the manufacturing market at the end of 2019 as Bitmain, with its Antminer 15 and 17 series; MicroBT, with its Whatsminer 10 and 20 series; Bitfury, with its latest Clarke chipset; Canaan, with its Avalon 10 series; Innosilicon, with its T3 unit; and Ebang, with its E10 model.<\/p>\n<p>\u201cThese new models produce as much as 5x the hashrate per unit as their generational predecessors, which means that even though on a unit-basis, several producers report solid sales of previous-generation models, on a hashrate-basis, Bitmain and MicroBT have delivered the vast majority of new capacity to the network,\u201d according to the report.<\/p>\n<p>It shouldn\u2019t be a surprise that Fulford recognized the importance of using the latest and most efficient technology in 2019, which could set Bitfarms up to have an even more productive 2020. <\/p>\n<p>\u201cWe added 13,300 new generation miners which has resulted in a 291 percent increase to computational hash power this year,\u201d he said. \u201cNew-generation miners now represent 73 percent of our installed computing power which positions us as one of the most energy-efficient cryptocurrency miners in the public markets.\u201d<\/p>\n<p>Plouton Mining, <a href=\"https:\/\/bitcoinmagazine.com\/articles\/fifty-acres-mojave-desert-home-sustainable-bitcoin-mining\">a pioneering solar energy bitcoin mining company<\/a> with operations in the Mojave District in California, has a similar emphasis for 2020.<\/p>\n<p>\u201cThroughout 2020 and going forward, we remain focused on running the most efficient hardware and maintaining extremely high power usage efficiency ratios, key fundamentals to maintaining operational profitability,\u201d Plouton CEO Ramak J. Sedigh told <em>Bitcoin Magazine<\/em>.<\/p>\n<p>But this investment in the latest technology does, of course, depend on the ongoing profitability of bitcoin mining in 2020. To this end, Sedigh explained that his biggest concern is whether bitcoin will be able to maintain a steady price.<\/p>\n<p>\u201cThe case for any mining operation, and so the success of the industry, really is dependent on the stability of bitcoin,\u201d Sedigh said. \u201cWe plan to survive the extended lows, but we need to keep higher averages so the traditional investors feel confident investing in bitcoin-related projects. To that end, my bigger concern is price manipulation, because at an estimated $150 billion total market cap, bitcoin is easy to manipulate through the exchanges, which contributes to volatility.\u201d&nbsp;<\/p>\n<p>Looking ahead to 2020, bitcoin mining will not be for the faint of heart, as price volatility is still a big unknown, CoinShares reported.<\/p>\n<p>On What\u2019s Halvening, Bendiksen marveled at the risk takers who are prepared to invest billions of dollars into bitcoin mining despite many question marks. Any risk analysis, he said, will tell you it&#8217;s a high-risk enterprise and yet, based on the actions of its participants, bitcoin miners clearly have faith in bitcoin and the network.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>In 2020, factors like new hardware, the upcoming reward halving and more will determine how bitcoin mining, and Bitcoin in general, grows.<\/p>\n","protected":false},"author":2916,"featured_media":17590,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[3227,2048,287,347,2094,344,1520,1916,195,3226,122,1790,2082,1491],"class_list":{"0":"post-18823","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-business","8":"tag-andrew-kiguel","9":"tag-bitfarms","10":"tag-blockstream","11":"tag-china","12":"tag-coinshares","13":"tag-halving","14":"tag-hash-rate","15":"tag-hodlonaut","16":"tag-hut-8","17":"tag-manufacturers","18":"tag-politics","19":"tag-quebec","20":"tag-samson-mow","21":"tag-solar"},"author_data":{"id":2916,"name":"Jessie Willms","nicename":"jessie-willms","avatar_url":"https:\/\/secure.gravatar.com\/avatar\/34e39b2d2b80d0f1b4eaf183ca23eff71d1e903536d749658f27936a80197dee?s=96&d=robohash&r=g"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/hashing-ahead-a-look-at-bitcoin-mining-in-2020.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/18823","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2916"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=18823"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/18823\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/17590"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=18823"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=18823"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=18823"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}