July 22, 2024

TokenInsight Analysts Named Russia's Unexpected Place in the Mining Industry

The computing power of the Bitcoin network is concentrated mainly in China, the USA, Canada, Northern Europe,Russia and Georgia, while Russia was in the lead in interest in cloud mining. This is stated in a TokenInsight study on the main trends of the mining industry in 2019.


Key mining trends in 2019, according to TokenInsight, are as follows:

  1. Last year, the average annual hashrate of the Bitcoin network grew by more than 80%, while the average cost of cryptocurrency on an annualized basis decreased by 1.9%.
  2. The proportion of transaction fees decreased by 43% from $ 280 million to $ 160 million.
  3. The computing power of the Bitcoin network is concentrated mainly in China, the USA, Canada, Northern Europe, Russia and Georgia.
  4. After the third halving coming in May, the inflation rate will drop to about 1.7%. For comparison, in gold this indicator is 6.2%.
  5. Manufacturers of ASIC devices are concentrated mainly in China - in 2019, the market share of the four largest manufacturers was more than 95%.
  6. The future of cloud mining is not in China, but in Russia.
  7. Mining pools are still poorly structured, the future direction is partnerships with independent third-party agencies
  8. In the mining segment of altcoins, the most progressive and positive events were observed in developed countries, while there is a positive direction for future regulation.
  9. In 2019, serious development of cryptocurrency financial services began, new products will be presented in the near future, competition will become more intense.
  10. Most Altcoins use GPUs and CPUs for mining, and the powers are mainly concentrated in North America and Europe.
  11. Algorithm is becoming increasingly popular.Proof-of-Stake (Pos), which through decentralized finance (DeFi) and lending services can become the foundation for creating an entire ecosystem. Currently, these staking products bring about 8 - 12.5% ​​per annum.

Regarding the high interest in cloud miningin Russia, TokenInsight analyst Johnson Xu, in a Decrypt commentary, noted that the number of unique visitors per month in Russia was almost double that of mainland China — 130,000 versus 80,000. Ukraine ranked third in the list with 56,000 unique monthly users.

The authors of the report explain this by the softened policy of the Russian authorities regarding cryptocurrency, as well as weather advantages (cold climate).

Johnson Xu also noted that since the mainComputing facilities are located in mainland China and there is already infrastructure for launching their own mining farms, this reduces the potential demand for cloud mining domestically.

Forecasts for 2020

  1. According to TokenInsight, the market share of ASIC device manufacturers will be 63% for Bitmain, 18% for Canaan, 10% &#8212; Whatsminer, and 7% &#8212; Ebang.
  2. May halving will have a limited impact on the price of bitcoin in the short term, but it will be a positive development in the long term.
  3. Faster Growth of Mining Farms Outside of China Expected
  4. Mining pools will produce more altcoins, which have enormous market potential and no less high risks.
  5. More cloud mining products will be launched with an eye on a wider market.
  6. Altcoin mining can gradually shift from the GPU / CPU towards FPGA (programmable logic integrated circuits), and in the long run towards ASIC devices.
  7. Cryptocurrency derivatives will gradually appear and develop, which, in comparison with the market of traditional derivatives, have huge market potential.

Read about how the mining industry has changed in 2019 in our special material.