Coronavirus Catalyzes Global Turmoil
We faced some issues with our website last week which resulted in our content being inaccessible for some while. We sincerely apologize that MinerUpdate was down but we are happy to be back in action. We can assure you that this was a small blip in what will be a long journey of providing high-quality crypto mining content.
On the bright side, it was great to see so many enthusiastic readers reach out to us inquiring about the site. There have been a few major developments since our last newsletter release. Of all of them, the exacerbation of the Coronavirus certainly warrants the cover story spot.
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Chinese equities opened significantly lower when markets reopened after the Lunar New Year holiday on Monday 3rd. After being closed since January 23rd, the CSI300 index opened over 9% lower while the Shanghai Composite opened over 8% lower.
The catalyst for the turmoil in the markets was the exacerbation of the Coronavirus over the Chinese holiday. The equity markets price in expectations from investors but the reality is industries are already being impacted.
Crypto mining has been no exception. The major Bitcoin ASIC manufacturer firms are all facing delays. Kevin Shao, CEO of Canaan’s blockchain arm anticipates that the Bitcoin network can maintain its current hash rate but whether the high demand for new mining rigs will be met is looking increasingly uncertain given the spread of the virus.
The Chinese government initially extended the Lunar New Year in response to the virus, forcing manufacturers to remain closed until February 8th-10th. DJ Miner, a Chinese reseller of WhatsMiner mining rigs, reported in their Telegram group today that Chinese businesses will not be returning to work.
“We have just been informed that China will NOT be going back to work on Monday as the gov’t is still forcing all businesses to stay closed. No orders will ship until the work ban is lifted. "
We can’t verify this information with any official updates from the Chinese government but major Bitcoin ASIC manufacturers have already sent out official warnings to their clients notifying them that orders will be delayed. Bitmain, Canaan, Innosilicon, and MicroBT all warned their clients about delays.
Pandaminer, a Bitcoin ASIC and GPU mining rig producer, informed CoinDesk that “during the extended vacation until Feb 10th, almost all the production will be halted”. The full extent of the disruption to mining rig deliveries currently remains unknown, especially in light of factories potentially remaining shut for longer.
Mining farms have been affected to a much lower extent than mining manufactories. The primary issue facing mining farms currently is the maintenance of mining rigs.
Mining farms have less staff on-site to ensure that mining rigs are fully functional. Furthermore, mining rigs which need to be sent to repair facilities will remain offline.
While the difficulty of mining on the Bitcoin network has increased over 19% since the 20th of December, BTC.com estimates that it will increase by less than 1% at the next adjustment in roughly 1 day. The fact that the difficulty is estimated to increase by less than 1% suggests that little hash power has been added since the last adjustment. The seven-day average of estimated hash rate by Bitinfocharts.com shows Bitcoin network hash rate reaching a peak and recently declining.
The mining industry is particularly vulnerable to the Coronavirus given its dependence on manufacturers delivering hardware. However, the cryptocurrency industry as a whole is being impacted.
Several conferences have been cancelled or postponed. TokenInsight cancelled a conference which was scheduled to take place in Chongqing province this month. Token2049 has been pushed back until October and Hong Kong blockchain week has been postponed to an indefinite date.
Overseas events are also being impacted. Binance postponed the Vietnam Blockchain week which was planned to take place in Ho Chi Minh City on February 29th.
If you are a professional in the cryptocurrency industry and your operations have been impacted by the outbreak of the Coronavirus, we would be interested to hear how your business has been impacted. Tweet us @MinerUpdate or you can also comment on this newsletter release.
We published a series of articles covering a proposal by major Bitcoin Cash miners to implement a 12.5% block reward tax at the May 2020 upgrade. The tax was proposed to fund development on the Bitcoin Cash blockchain.
Major Bitcoin Cash Miners Propose a Controversial Development Fund - The original proposition was co-signed by four major Bitcoin Cash miners - Jiang Zhuoer, Roger Ver, Jihan Wu, and Haipo Yang. The wording of the proposition was quite forceful and stated Bitcoin Cash miners who failed to comply would have their blocks orphaned.
How would a Bitcoin Cash Block Reward Tax affect Bitcoin Miners? - An article by crypto researcher Hasu highlights that the implementation of a Bitcoin Cash block reward tax impacts the entire SHA256 mining ecosystem. Meanwhile, Bitcoin.com, led by Roger Ver, withdraws support for the proposal.
BTC.top CEO Updates Views on Controversial Bitcoin Cash Proposal - In a less forceful tone, Jiang Zhuoer updates his stance on the Bitcoin Cash proposal. The updated proposition suggests that Bitcoin Cash miners vote with their hash power on whether the block reward tax will be implemented.
Quick Miner Movements
An Iranian government cabinet has reportedly issued 1,000 licences to cryptocurrency miners.
Two 51% attacks were successfully executed on the Bitcoin Gold blockchain with over 7,100 BTG being double-spent between the two attacks. The hash power to launch the attacks came from the hash rate marketplace NiceHash.
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MinerUpdate.com is the leading crypto-mining publication. Our aim is to bridge the gap between the East to the West in mining while delivering to our readers the latest insights and developments in the industry. Our publication is ad-free, bias-free, with no conflict of interest when it comes to delivering high-quality content. In October 2019, MinerUpdate hosted MinerSummit, the first English crypto mining event in China.
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