Power Efficient Hardware Dominates Bitcoin Mining in Q3 As Hardware Arms Race Unfolds

TokenInsight’s latest Q3 mining report highlights that power-efficient hardware has outperformed in tougher mining conditions. Despite tighter miner profit margins and rising hash rate and difficulty, an arms race to release the most power-efficient hardware to market unfolds.

Quick take;

  • Hardware with greater power efficiency outperformed in the market conditions of Q3 which were characterized by prices declining while Bitcoin hash rate and difficulty levels continued to rise
  • Manufacturers are racing to deliver hardware with greater power efficiency as older-generation hardware is pushed out of the market

Q3 was characterized by significant bitcoin price declines, tightening profit margins for bitcoin miners, and rising hash rate and difficulty levels. In their Q3 report analysing the crypto mining industry, Beijing-based research firm TokenInsight has highlighted that power-efficient hardware performed best in these conditions.

In the third quarter, mining hardware models with high power efficiency didn’t perform as well as they did in the second quarter, they did outperform and handled downside risks much better than other mainstream models available in the third quarter.”

Power Efficient Hardware Outperforms

Payback periods depend on the complex interdependencies of several variables such as price paid per unit TH of hardware, the price paid per unit power efficiency, and costs associated with the mining operation. Despite this complex relationship, a clear picture emerged that more power-efficient hardware is outperforming when prices are declining while the hash rate and difficulty continue to rise.

Among all SHA256 mining hardware models examined in this report, more than half failed to generate enough revenue to cover their procurement costs at current BTC price and mining difficulty; meanwhile only one high power efficiency model failed to do so under the same conditions”

Among hardware models, the Antminer T17+ reigned supreme being the only hardware model with a payback periods less than one year. However, the Antminer T17+ only launched near the end of Q3 being announced on the 11th of October.

Bitcoin Mining Power Efficiency Arms Race

The market is looking ahead towards the next generation of Bitcoin ASIC hardware. It is anticipated that Bitmain will announce its 7nm-chip Antminer S19 in Q1 2020.

TokenInsight note that the Antminer S19 Pro will be expected to have a power efficiency below 30J/TH. The lowest power efficiency among current hardware models is the Antminer S17 Pro with a power efficiency of 39.5 J/TH.

Bitmain is not the only hardware designer racing to bring more power-efficient hardware to market. MicroBT will be releasing their WhatsMiner M30S hardware model equipped with 8nm Samsung chips.

While this arms race unfolds, older-gen hardware is being pushed out of the market. There has already been serious concerns voiced regarding the profitability of such older-gen mining hardware under tougher mining conditions as well as the sustainability of such hardware beyond the halving of 2020.

The Antminer S9j, which accounts for a considerable amount of Bitcoin network hash rate, has been delisted from selling on Bitmain’s website. This move towards more power-efficient hardware has been coupled with an increase in the prices of the latest-gen mining hardware.

Older models lost their market shares to recently released ones. Innosilicon T3-43T and WhatsMiner M20S are the only two [high power efficiency] models that sell at lower prices in the third quarter among models staying on shelves in the past two quarters.”

Special thanks are due to Sally Wang and Shize Qin from TokenInsight who are always very helpful when MinerUpdate have enquires regarding their research or request data.