They develop software for miners, but also innovate with artificial intelligence chips.
The chips cost millions to produce, demonstrating the growth of Bitcoin miners.
Bitcoin mining has taken a major turn as an industry in recent years. The network has grown in terms of processing power at record levels, even in the midst of a bearish market, reflecting the demand for equipment to be more efficient. Meanwhile, companies are investing large sums of money in mining companies in various parts of the world.
As a result of this growth, the activity of those who produce the ASICs occupied by Bitcoin miners has also expanded.. This allows them not only to develop new equipmentas reported recently by CryptoNews, but also to expand into other markets currently dominated by large players, such as Intel, Samsung, and Sony, among others.
In addition to being a possibility, it is also a necessity, as increasing competition in the industry-due to the entry of new players-forces the creation of increasingly powerful equipment with lower power consumption.
This is the case with Canaan, Bitmain and Ebang, the most prominent companies in the field of Bitcoin mining hardware production. In addition to their core businesses, they all develop artificial intelligence chips (AI) who perform various functions in the field of computing, such as developing devices that work with this technology.
Also, AI chips can also be used for Bitcoin miningbecause they can solve millions of computational equations per second. In other words, the same as conventional mining chips, but more efficiently.
A report by Token Insight in the second quarter of 2020 warned of this trend to switch to microchip development by companies producing mining equipment. Behind this decision, is an industry that is growing by leaps and bounds. And it is set to expand further.
AI chips as a business for bitcoin miners.
Canaan’s AI chips are called Kendryte and there are several models.such as the K210 (launched in 2018) and the K510. The latter, introduced in mid-2021, is “highly customizable” and its use is optimal for tasks such as high-definition aerial photography, high-definition panoramic video conferencing, robotics, STEAM education, driver assistance scenarios, and industrial and professional cameras, according to details the company itself.
For his part, Bitmain has also moved decisively to enter this market. This company has a subsidiary called Sophgo (or Sophgo in Chinese), which is involved in the development of artificial intelligence chips and products.
In website Not only AI chips, but also other products such as intelligent computing modules, accelerator boards, microservers, and intelligent servers are for sale on Sophgo’s website. In addition to all these, announced the arrival of a “fourth generation of AI chips.”.
Finally, Ebang’s developments in this field have not yet reached the market, but according to the report cited above, the company is also working in this area. CryptoNews asked Ebang about its developments in AI chips, but did not receive a response at the time of publication.
Chip production, an expensive business reserved for the few
According to the projections from Fortunes Business Insights magazine, Artificial intelligence industry could triple its current value in the next few years. It would grow in value from $387 billion to more than $1.3 trillion by 2029.
However, Entering this market requires a gigantic investment.that only the big players are able to make. The fact that Bitcoin miners can play in this league, even without competing (yet) against the industry’s Goliaths, is indicative of the enormous growth they have experienced in recent years.
Ninety percent of the most technologically advanced chips are made in Taiwan, says a article New York Times. The industry has a billion-dollar cost that is constantly growing.Chips add more transistors to each piece of silicon to increase its capacity.
Creation of a chip factory requires multimillion-dollar investments in machinery, infrastructure, inputs and skilled personnel.. It is estimated that more than 5,000 skilled workers will be engaged for more than three years in the construction of Intel plants in various parts of the United States, such as Arizona, New Albany, Ohio, and Magdeburg, Germany.
The systems that perform each step of the manufacturing process are largely automated. Yet, According to specialists, it can take two months to create a chip wafer..
Bitcoin miners and their evolution over a decade.
Companies developing Bitcoin mining equipment have experienced tremendous growth in 10 years. They went from selling products to a micro-niche, with a business that was almost a home hobby, to an industry worth billions of dollars a year..
How can such an expansion be explained? The spread of Bitcoin mining as an investment, the adoption The use of cryptocurrencies and the resulting increase in prices are some of the factors that may explain this phenomenon.
Canaan is a company founded in China in 2013, like its competitor Bitmain. During that year, the price of bitcoin (BTC) was between US$135 and US$1,127.after a sharp increase in November. It ended the year with a value of US$767.
In addition, miners’ profits were much higher at that time. After halving in 2012, the reward for mining a block was 25 BTC.. Considering that mining equipment manufacturers have to test their equipment (and thus mine Bitcoin), the rise in cryptocurrency prices has increased their cash reserve per year.
Taking the highest price of the cryptoasset in that year, a miner could earn more than $28,000, but if he or she had chosen to hold those bitcoins, he or she could have sold them for 3, 4, or even 15 times more in 2017. For a company with thousands of bitcoins in its possession, this translates into millions of dollars in profit..
In short, the growth of Bitcoin miners has gone hand in hand with the evolution of cryptocurrency, which year after year has added millions of users and miners worldwide. Now in the midst of expanding to other areas, it seems that the industry is still far from reaching its peak.
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