Can Canaan's full entry into cloud computing mining save its performance in the new year?

With cloud computing power in the left hand and AI in the right hand, can Canaan’s transformation in the new year be successful?

On the afternoon of April 23, Canaan, the first listed mining machine company, held a press conference and announced the launch of Canaan Cloud, fully entering the cloud computing mining industry. Canaan suffered heavy losses in the fourth quarter of 2019, and its business began to diversify in the new year. Canaan used cloud computing as a new growth point in its 2019 annual financial report. Can cloud computing save Canaan's performance in the new year?

Reference article "Wu's in-depth old article: Canaan and the three major death spirals of the mining industry"

Jianan said that cloud computing power allows individuals to obtain digital currencies mined by computing power through computing power leasing. Currently, less than 5% of Bitcoin computing power in the market is sold to ordinary investors in the form of cloud computing power, and there is still a lot of room for market growth.

Canaan did not build its own computing power platform, but provided solutions. The Canaan Cloud launched by Canaan integrates the computing power bottom layer and service layer, supports partners to build a safe and stable cloud computing power platform, can detect real computing power, view real-time data, and complete deployment within a week. Current partners include mining players Panda Power and Computing Power Interconnection, and exchange BitMart (the latter two are invested by Canaan's Shao Jianliang's BitMart Capital). The rare participation of exchanges shows that Canaan can provide a complete set of solutions from mining machines, mining farms to the cloud.

Since 2019, cloud computing has become a popular way of playing in the cryptocurrency and mining circles. There are more than a dozen mainstream cloud computing companies, and there are countless non-mainstream ones. Almost all large mining companies do cloud computing. Because they directly face C-end investors, cryptocurrency media with traffic such as Mars Finance and Planet Daily have participated in the creation of projects.

So why doesn't Canaan do it itself? The reason is probably that as a US listed company, Canaan will face certain legal risks if it directly engages in cloud computing. For Canaan, which is currently being sued, it will naturally be very cautious. Therefore, Canaan emphasizes that it provides solutions to partners and does not say that it is its own product.

The US government has always regarded cryptocurrency mining cloud computing power as a securities industry and has strictly regulated it. In early April, the US government agency filed a lawsuit against the cloud mining agency Ultra BTC Mining and its agency Laura Branch, claiming that the mining machine computing power sold by the cloud mining agency was "securities" and was not registered, and that there was fraud in its promotion.

However, Wu said that the top players in the cloud mining industry could have revenues of hundreds of millions of RMB in 2019. Although this is not comparable to the mining machine manufacturers who got rich in 2017, it can still be a considerable income for Canaan.