Bitcoin, Crypto currency, Blockchain

Mining series part 5: A look at the Mining Hardware manufacturer

In the last four Parts of our Mining series we have outlined many of the technical aspects of Mining, Algorithms and Hardware. Now we want to deal once again with the manufacturer, the market for ASIC miners.

Where organized, the manufacturer of ASIC Hardware?

In the procurement of Hardware, we had already discussed in the last part, the different procurement routes in detail. Now we want to go over again, the manufacturer of ASICs and their market strategies.

The company Bitmain Technologies Ltd has since its founding in 2013, headquartered in Beijing, capital of China, but the actual activities in addition to R&D (Research and Development) in the Region of Hong Kong and Shenzhen. Hong Kong plays the role of the trading platform for ASIC Miner and Shenzhen, the role of the production site. All international sales are run through the Office in the Tresbury Centre, Wan Chai, Hong Kong. Hong Kong also serves as an intermediate storage for the ASIC Miner.

The Re-Import of miners from the “Chinese abroad”, such as Hong Kong, China is currently very risky. The Chinese government has banned in the last year crypto-currencies and is pushing this year (2018) to the reduction of Mining activities on the Chinese mainland.

Hong Kong is, with the exception of currently, as heard in 1997 by the British and since the first opium war in 1842 firmly in the hands of held crown colony to a Chinese territory, but very generous special privileges in the area of in trade and financial services, as well as a Beijing “observed” government. Here You will find a different currency, the Hong Kong Dollar (HKD).

Shenzhen is the place of Assembly and logistics facility for Bitmain and others. The right in the “backyard” of Hong Kong (approx. 100 km from the city centre to the city centre) situated SEZ (special economic zone, Special Economic Zone) also has special economic privileges, because Shenzhen is used for the past 30 years, as an “Experiment” in China, the prevailing System of communism. Here I’ve placed over the years, many companies all around the IT Hardware market. Wherein Chips (CPUs, GPUs, memory chips) are mainly produced in Malaysia, Taiwan, Japan, Korea, and Indonesia, You will find in Shenzhen, many of the Assembly factories, the place these components on the conductor plates (IC Boards), and all of the components to a finished and ready-to-use-IT-product assemble (Assembly). The electronics industry has made Shenzhen the Region with the highest gross-per-capita income in China.

The company Canaan Creative co., Ltd. has its headquarters since its founding in 2013 (the same time as Bitmain), also in Beijing. Canaan produced, however, the Avalon is not in Shenzhen but in front of the place.

Innosilicon Technology Ltd. has since establishment in the year 2006 and its headquarters is in Ningbo District, Yinzhou, about 100 km South of Shanghai. There is also manufactured and Shanghai as a location for logistics supplied. Since 2015 Innosilicon is also in the Mining Hardware business.

The Coinbau GmbH, located in Dresden, Silicon Saxony, is the only European manufacturer of ASIC’s for BitCoin Mining. Already since 2014 the ASIC to be built from Coinbau. The ASIC’s will be of Coinbau even the circuit designs of the circles themselves, these are at Global Foundries in Dresden, Germany to manufacture and build the mini-Boards. Coinbau operates highly automated siert own Mining data centres in Iceland, Sweden and Norway, with its own self-manufactured Boards, and ASIC’s. Coinbau all the steps of the BitCoin pooled Mining value chain of a company. According to information Coinbau between 3 and 5% of the world’s BitCoin Mining capacity. The ASIC and the Board will not be sold, but only for the captive use in their own data centers. Coinbau is part of the Blockchain-Holding GmbH, based in Dresden.

Where to sit to ASIC, between a dealer?

It is crucial, however, is that Bitmain has contributed as a “top dog” of the ASIC market in the last few years, a between trade in and around Hong Kong and Shenzhen has settled. These electronic distributors are, of course, to call such as, for example, Best Source International co., Ltd. in Shenzhen, which sell for more than 18 years of age any type of IT products in the world. The Best Source is almost from the beginning to serve this lucrative intermediate trade with Mining Hardware, and probably the most reliable dealer in Shenzhen.

As the manufacturer of ASICs dealer –> local dealer –> end user will not use, in most cases, a traditional distribution chain of manufacturer –> big, but through their Websites irregularly, and direct production lots (Batch) sell, is a permanent Disposition not be possible. Wholesalers buy large sections of Loose, hoarding it and selling prices in the last months to maximum.

You accept, however, is also an important function: Distribution not only on pre-order (Pre-Order), but also from the camp that you hoarded before. The explanation for this “black market” is probably also in the Communist economy, which manifests itself here, at least in the Form of “under the table” transactions. According to my Insider information, large parts of production are free to large customers, such as MGT or Best Source, sold as a special personal cooperation.

The extent to which the since 2018, launched the relocation of the Mining Pools will be changed into Chinese foreign these structures in the long term remains to be seen.

Furthermore, the Blockchain-Holding GmbH from Dresden, Germany, as a Full-Service provider for BitCoin Mining is an interesting Business model, where all elements of the value chain in the company will be provided followed. It remains to be seen whether the Blockchain Holding is expanding its ASIC-Mining-production on other Blockchains in addition to BitCoin.

Overall, this market is stocked with many small distributors, the have to seek your happiness or your offer is specifically extended. In the case of tight supply on the market, these traders have to pay a kind of “fill-in” function. Please do not be but in the case of small traders in China are always prepared to provide, if necessary, even though You’ve paid.

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