Impact Analysis of Covid-19
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Global Cryptocurrency Mining Equipment Market - Insights
Cryptocurrency mining functions on the principle of blockchain technology, wherein mining involves assembling transactions into blocks and executing multiple computations, in order to seal those blocks. These functions are based on distributed computing principle and require other systems to verify the transaction and in turn are rewarded with transaction fees and new block.
Altcoins have gained significant popularity and acceptance in economies such as Canada, the U.S., France, Germany, Japan, and Mexico. According to CoinMarketCap, as of March 2018, total market capital of all the mineable and non-mineable cryptocurrencies was pegged at US$ 296.03 billion, up from US$ 22.62 billion in March 2017, is expected to witness significant growth over the forecast period. This has led to increased emphasis on the deployment of systems for transaction verification and authentication. Moreover, owing to high market capital of cryptocurrencies such as Bitcoins, Ethereum, Bitcoin Cash, Litecoin, Monero, Dash, Ethereum Classic, Bitcoin Gold, and Zcash have led to increased profitability of the miners. Thus, to ensure smooth functioning of these digital transactions and achieve high probability of finding new blocks in addition to transaction fees, cryptocurrency mining equipment are estimated to witness significant demand over the forecast period.
Figure 1. Global Cryptocurrency Equipment Market
Source: Coherent Market Insights (2018)
Development of ASICs and GPUs with hashing power ranging from few GHs to Th/s is expected to present strong growth prospects over the forecast period
In April 2017, Russian Miner Coin launched the new pantec miner with power consumption of 600 W and power connection of 220 V. In April 2017, Zhejiang Ebang Communication Co., Ltd introduced E10 18T Miner integrated with Samsung 10nm Chips for bitcoin mining. These 10nm DW1228 chips manufactured by Samsung find significant applications in boosting E10 hashrate featuring speeds upto 18TH/s. Other major companies that include Advanced Micro Devices, Inc., NVIDIA graphics Pvt. Ltd. and Bitmain Technologies Ltd. are also involved in the development of GPUs and ASICs with higher power efficiency and faster hash rates for providing the miner with higher probability of finding new blocks and garner increased profit margins. In conjunction with these factors, growing difficulty levels of the altcoin mining will present strong growth prospects for the cryptocurrency mining equipment market over the forecast period.
On the basis of the equipment, ASICs contributed highest market value share in 2016, and is expected to continue its dominance over the forecast period. Prominent factor influencing the growth of this segment include high hashing power, customizability for specific altcoin operations, unlike GPUs which are used for general purposes that find applications in various other industry domains such as gaming, graphic development, and astronomy. Moreover, these ASICs consume much lesser power as compared to GPU and hence, the hardware efficiency of ASICs is superior to that of any other mining system available in the market. However, utilization of ASICs are limited to specific digital currencies and it cannot be used for mining other currencies such as Ehtereum and Ethereum Classic.
Asia Pacific cryptocurrency mining equipment market contributed largest industry share in the industry and it is expected to continue dominance over the forecast period. The region has a large concentration of players, owing economies of scale, specifically in China. However, unfavorable regulatory developments in China, leading to ban of cryptocurrency exchanges is expected to hamper the regional growth of the market.
Major players in the global cryptocurrency mining equipment market include Advanced Micro Devices, Inc., Russian Miner Coin, Halong Mining, Zhejiang Ebang Communication Co., Ltd, NVIDIA Graphics Pvt. Ltd., Bitmain Technologies Ltd, SBI Group, Bitfury, TSMC, Canaan Creative Co. Ltd, Global Foundries, and United Microelectronics Corporation. Market is highly consolidated with top 5 companies contributing over 60% of the overall industry share in 2016. According to Coherent Market Insights analysis, market is expected to open, following the entry of new players in the industry space.