back to article China's top crypto-mining hardware-maker reportedly furloughs staff

The world's largest source of hardware designed for the task of mining cryptocurrency, Beijing-based Bitmain, has reportedly furloughed staff after disappointing sales. Bitmain's Antminer boxes – which employ application-specific integrated circuits (ASICs) tuned for the job of mining crypto – are thought to command 75 percent …

  1. JimmyPage Silver badge

    It's almost as if there is no money

    in mining crypto.

  2. Howard Sway Silver badge

    When the people making the shovels go out of business ....

    ... you know the gold rush is well and truly over.

    1. Elongated Muskrat Silver badge

      Re: When the people making the shovels go out of business ....

      I came here to post that comment, pretty much exactly word for word, but you beat me to it.

      I bought some of those "shovels" way back in around 2006 or so, when they cheap (at £10 or so each), and were more like hand-trowels. The things being sold now are more like the giant earth movers used in open cast mining, and cost many thousands of pounds.

      My modest investment, made out of curiosity back then, of around £150 had "mined" around £80 worth of bitcoin by the time I turned it off because the network had gained so much in capacity that the next block reward was likely to be a decade away. Due to the (surprise to me) pretty much exponential "value" growth, that £80 was more like £2-3K at its peak. I've recently divested myself of the last of it (well almost, I have about £20 worth left) by using it at payment on online retailers that allow it. It has paid for, over the last few years, about £500 worth of amazon gift cards, a couple of nice 4K monitors, various PC components, a R-Pi 400, several bits of electronics for playing about with, a gaming laptop, and a comfortable gaming chair. I lucked out with the way it went, because I was literally ready to throw the money away on a curiosity at the time. I'd run a mile from buying any "mining" hardware now, especially with the regulatory environment around cryptocurrencies in the UK right now (I've always been careful to "spend" amounts that don't take me anywhere near the CGT threshold).

      I'm just surprised that it has taken this long for the mining hardware bubble to burst, as the ROI on the expensive miners seems to allow for a really slim margin of profit, dependent on cheap electricity, and an assumption that the price of bitcoin is always going to go up. You'd have to be crazy, or have a lot of money to burn to make that gamble any time in the last ten years.

      1. Elongated Muskrat Silver badge

        Re: When the people making the shovels go out of business ....

        Incidentally, the regulatory writing is clearly on the wall when it comes to crypto, as evidenced by what you can use it for now, compared to, say, five years ago. You can no longer buy Amazon gift cards through BitPay in the UK, and the number of retailers that allow it as a payment method has dropped off a cliff. I recently had a spending spree on while they're still taking it. That last £20 or so might go up in value at the next halving to be an amount worth using to buy a treat for myself, but I probably won't be able to "spend" it anywhere by then.

    2. Blackjack Silver badge

      Re: When the people making the shovels go out of business ....


      'He's not pinin'! 'He's passed on! This parrot is no more! He has ceased to be! 'He's expired and gone to meet 'is maker!

      'He's a stiff! Bereft of life, 'he rests in peace! If you hadn't nailed him to the perch he'd be pushing up the daisies!

      'His metabolic processes are now history! He's off the twig!

      'He's kicked the bucket, he's shuffled off 'is mortal coil, run down the curtain and joined the bleedin' choir invisible!!


  3. tony72

    The bitcoin mining industry has made no sense during this bear market. What's supposed to happen (I thought, anyway), is that when the price of bitcoin drops below the level at which miners can make a profit, the least efficient miners are forced out of the market, or have to turn off some of their machines. This leads to a reduction in hashrate, and the bitcoin algorithms then adjust the difficulty down, so that less energy is required to mine each bitcoin, and so forth until the cost of mining a bitcoin drops close to the market price, and a new equilibrium point is reached.

    However what we've actually seen in this bear market is new all-time highs in the hashrate, with miners just seemingly mining harder and racking up debt while the price is low, in the belief that the price will eventually recover, and all that mining will pay off. If we're now seeing mining machines no longer selling, then perhaps that strategy is now catching up with the miners. It already seemed likely that many miners wouldn't survive the next halving, but maybe some of them won't even make it that far.

    1. Kristian Walsh Silver badge

      If you increase supply of any currency, the currency as a whole becomes less valuable (see for a textbook example that pre-dates fiat currencies). This is just as true of a finite-resource currency like BTC where that resource limit has not yet been reached, as it is of a fiat currency like the 1920s Reichsmark or the gold-backed Spanish Escudo.

      This explains why the hashrate has not changed. Making it easier to produce BTC at a time when the buying power of 1 BTC is very low means that you further erode that buying power, because, unlike previously, there are no inward flows of value into BTC at present to prop up its value. It was those inward flows, from investors and speculators, that caused the price of BTC to rise faster than the currency-supply via mining could keep up. Incidentally, it is at this phase in a boom that a true currency would increase its supply, to rein in the value before it overheats or sets up a crash; but when you subject it to the duck test, BTC isn’t really a currency: it neither walks nor quacks like money - it’s more like a stock: worth whatever number of dollars the last person has paid for one.

      Mining speculators who misread that short-term trend as being the dawn of a super-valuable BTC invested large sums of money (crucially, not BTC-denominated - shovel-makers are no fools) into mining hardware. Now that they’re carrying that sunk cost the only options they can see are to abandon ship and crystallise their losses or double-down and hope for a recovery on the basis that previous collapses were followed by rises. This is called the Gambler’s Fallacy for a very good reason.

      1. Peter2 Silver badge

        Wasn't most of the money going into bitcoins etc people buying them to pay criminals with for cryptolocker style extortion rackets?

        I'm not aware of a huge number of other people actually buying them. (although i'm sure that somebody did for some reason)

  4. Anonymous Coward
    Anonymous Coward


    Crypto mining is bad for the climate crisis and I can't wait to see it all crash and burn.

    I'd like to see the end of the tobacco industry too. And a certain war or two that's going on right now. But the end of crypto mining would be a step in the right direction.

  5. Gob Smacked

    Nice story, but in the mean time, bitcoin hash rate continues to rise. Above 400 exahash, far above the 90 exahash dip in 2021, when China abolished mining.. (they're back with about 20% of that 400+ total now).

    Bitmain lost marketshare, that's all

    Oh yes, go ahead. Downvote a factual post. The Reg and most of my fellow [m/v] readers still do not really understand bitcoin is not crypto and while all the scams are failing, something is actually growing too - bottom-up, as designed.

    1. A. Coatsworth Silver badge

      Care to enlighten us? Or will you send me to "do my own research"?

      That smugness does wonders to foster the understandig of this difficult topic

      1. Elongated Muskrat Silver badge

        Indeed. I have no idea what [m/v{ is supposed to indicate, or indeed the meaning of the statement of "bitcoin is not crypto" and yet I probably know more about the technical ins-and-outs of bitcoin than the average reader. For example when the OP is talking about "exahash" this is a measure of the total "hashing" power of the bitcoin network - in rough terms the total number of "hashing" operations per second by all mining hardware on the network. Those "hashing" operations are basically attempts to come up with a cryptographic key that will encrypt the next "block" on the blockchain with a value that has at least a certain number of leading zeroes in it (the number required is the "difficulty" and varies with the speed at which the blocks are being generated). This is where the "crypto" bit comes from, not directly from the Greek κρυπτός (that which is hidden); the word cryptography is derived from that (literally meaning hidden writing), but the field of cryptography has deviated someone from that exact meaning since the seventeenth century when it referred to writing hidden messages in letters. Thus "bitcoin is not crypto" is a fairly meaningless thing to say. A bit like saying "yellow isn't cheese" or "my foot isn't 14," being as it is, completely lacking in context, except possibly in the mind of the OP. A lack of clarity in communication isn't really a great selling point from the crypto-bros there. Ironically, their post was a bit "crypto".

        1. Gob Smacked

          Thanks, an informed reply.

          Sorry for the ranty post, I got a bit discouraged about the knowledge level here in the past on the subject. As a long time IT guy (I'm a real boomer), I always liked the tongue-in-cheek ways of The Reg, while colleague posters (mostly... lol) showed they too knew their business. Bitcoin is one subject that never passed the grades here, it's too complex to brush off with some self-education, it really takes effort to get a bit of overview.

          Crypto refers to "the other 20..40 thousand" coins that for 99+% are just setups to make money. You cannot stop people to try and make money of course. As with the early Internet, companies each tried to copy and start their own version of it. In the end, the invention that gets the network effect will survive. In the case of internet money, that's looking to become bitcoin. For me, it's about saving up for my pension in a type of money that does not inflate. For an Argentinian, it's about being able to pay - their own Peso devaluates too quickly and their grocery stall accepts bitcoin gladly. In Africa, small villages can setup a small energy grid no one is willing to pay for using the nearby waterfall and include a bitcoin miner that then pays for it using the cheap energy - effectively setting up green energy hotspots and introducing local economies.

          There are so many places worldwide now, where people need a money system where they cannot have bank accounts, but stilll use a telephone (SMS is sufficient already). That's the bottom up way bitcoin introduces itself. No leaders, no central authority, just people using it for their own purposes. As any normal money should function.

          And it's totally open: the "crypto" part that everyone refers too is just a normal way to ensure transactions are all correct and dependable. Just like your own bank transfers are (and this post for that matter): fully crypted to ensure correct and untampered delivery.

    2. DS999 Silver badge

      Hash rate won't continue to rise

      If people stop buying new mining hardware - which the company selling 75% of mining hardware says they are seeing. Post your proof that bitmain has "lost market share". Who is making better mining hardware that's stealing their market share?

      I'm guessing this slowdown is because of the next mining reward "halving" coming in six months or so. The miners don't see a way for new hardware to pay for itself once the reward is halved, so they aren't buying it. Some miners will no longer be profitable past that date, and they'll drop out.

      So what will you say if this time next year the hash rate is falling?

      Bitcoin is a different type of ponzi scheme, one which relies on the bitcoin price continuing to rise sufficiently to make it profitable for miners. At some point it will become unprofitable for anyone who has to pay for their own electricity, and only those stealing electricity will be able to continue. The hash rate will be so low that transaction costs will be through the roof. Eventually the whole house of cards collapses. Not this halving, maybe not the next halving. But eventually the mining rewards will be so small no one will mine, and the bitcoin network is frozen with no transactions able to complete because those doing the computations to make them possible will have all dropped out.

      1. Elongated Muskrat Silver badge

        Re: Hash rate won't continue to rise

        Are transaction costs tied to hash rate? My understanding is that the transaction fee is a "competitive" element - the person adding the transaction sets the fee at a level where they expect it to get accepted, and if it isn't then their transaction doesn't go through until a miner does accept it.

        The hash rate and the rate new blocks are mined are decoupled by the "difficulty", which is set so that a new block is "mined" roughly every ten minutes. The thing that pushes up the transaction cost is the number of transactions going on, not the network hash rate. If the network hash rate drops, so does the difficulty, which makes it more appealing for those who are left, as they are more likely to get the transaction fees from the next block. It is all engineered in that transaction fees are intended to replace mining rewards after the final "halving". Whether anyone is still using BTC at that point, or the value has dropped to zero is another question.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like