Connect with us

Bitcoin

Mining rig manufacturer Canaan announces narrowing net loss in Q2 results

Published

on



Bitcoin mining rig manufacturer Canaan on Aug. 31 released its unaudited financial results for the second quarter of 2020.

While gross profit was up both year on year and quarter on quarter, the company still posted a net loss, albeit one which has narrowed significantly in the last twelve months.

The amount of computing power sold in its application specific integrated circuit (ASIC) hardware was 2.6 million THash/s. This represents an increase of almost 200% on Q1 figures of 0.9 million THash/s, but is an 18.2% drop on figures from the previous year.

Revenues were also up 160% on last quarter, but down a quarter from last year, at RMB 178.1 million ($25.2 million).

However, gross profit of RMB 43.3 million ($6.1 million) was up over 300% year on year, and over 1,700% on figures from Q1.

This was accompanied by a significant increase in gross margin for the quarter to almost 25%. For comparison the gross margin was 3.5% in the previous quarter and 4.5% in Q2 2019.

The result of this was a reported net loss of RMB16.8 million ($2.4 million). This was less than half of the net loss posted in the previous quarter and over 90% less than the RMB 263.1 million reported in the same quarter last year.

Canaan was the first mining rig manufacturer to successfully hold an IPO, in November 2019, although it raised less than 25% of the $400 million projected. Share price has crashed some 75% since then, with today’s value being just $2.19 of their initial $9 sale price.



Source link

Bitcoin

China’s attempt to kill Bitcoin failed — Here are 3 reasons why

Published

on

By


Bitcoin (BTC) might have suffered its largest coordinated attack over the last couple of months, but in this instance, the investor community did not capitulate. China outright banning mining in most regions after giving BTC miners a two-week notice and this caused the single largest mining difficulty adjustment after the network hash rate dropped 50%.

The market sentiment surrounding Bitcoin was already damaged after Elon Musk announced that Tesla would no longer accept Bitcoin payments due to the environmental impact of the mining process. It remains unknown whether China’s decision was influenced or related to Musk’s remarks, but undoubtedly those events held a negative effect.

A couple of weeks later, on June 16, China blocked cryptocurrency exchanges from web search results. Meanwhile, derivatives exchange Huobi started to restrict leverage trading and blocked new users from China.

Finally, on June 21, the People’s Bank of China (PBoC) instructed banks to shut down the bank accounts of over-the-counter desks and even their social networks accounts were banned. OTC desk essentially act as a fiat gateway in the region so without them it would be difficult to exchange from Bitcoin to stablecoins.

As these events unfolded, some analysts were reluctant to describe the tactics as nothing other than meaningless FUD, but in hindsight, it appears that China launched a very well-planned and executed attack on the Bitcoin network and mining industry.

The short-term impact could be considered a moderate success due to the collapse in Bitcoin price and the rising concerns that a 51% hashrate attack could occur.

Despite the maneuvers, China’s attack ultimately failed and here are the main reasons why. 

The hashrate recovered to 100 million TH/s

After peaking at 186 million TH/s on May 12, the Bitcoin network hash rate, an estimate of the total mining power, started to plunge. The first couple of weeks were due to restrictions to coal-powered areas, estimated at 25% of the mining capacity.

However, as the ban extended to other regions, the indicator bottomed at 85 million TH/s, its lowest level in two years.

Bitcoin estimated hashrate. Source: Blockchain.com

As the data above indicates, the Bitcoin network’s processing power recovered to 100 million TH/s in less than three weeks. Some miners had successfully moved their equipment to Kazakhstan, while others shifted to Canada and the U.S.

Peer-to-peer (p2p) markets carried on

Even though the companies involved in crypto transactions have been banned from the country, individuals continued to act as intermediaries—some of these recorded over 10,000 successful peer-to-peer transactions according to data from the exchange’s own ranking system.

Huobi Global peer-to-peer market advertisement. Source: Huobi

Both Huobi and Binance offer a similar marketplace where users can trade multiple cryptocurrencies including USD Tether (USDT). After converting their fiat to stablecoin, transacting on a regular or derivatives exchange becomes possible.

Asia-based exchanges still dominate spot volume

A complete crackdown on trading from Chinese entities would likely be reflected in the exchanges previously based on the region, like Binance, OKEx, and Huobi. However, looking at the recent volume data, there hadn’t been a meaningful impact.

Weekly spot volume, USD. Source: Cryptorank.io

Take notice of how the three ‘Asia-based’ exchanges remain dominant, while Coinbase, Kraken, and Bitfinex are nowhere near their trading activities.

China’s ban on Bitcoin mining and transactions may have led to some temporary hiccups and a negative impact on BTC price, but the network and price have recovered in a way that is better than many expected.

Currently, there is no way to measure the OTC transactions where larger blocks are traded but it is just a matter of time until these intermediaries find new gateways and payment routes.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.