2019 Blockchain Mining Research Report

Summary of key points:

1. The average Bitcoin usage increased by 80% in 2019, while the average price fell by 1.9% throughout the year.

2. The proportion of transaction fees in mining income decreased from US$280 million to US$160 million, a decrease of 67%.

3. The global Bitcoin network computing power is mainly concentrated in China, the United States, Canada, Northern Europe, Russia, Georgia and other regions.

4. After the third halving, the supply growth rate decreased to about 1.7%, which is much lower than the 4.8%-6.2% of gold and the 5% of the narrow money (M1) issuance.

5. ASIC mining machine manufacturers are relatively concentrated. In 2019, the top four manufacturers in terms of market share accounted for more than 95% of the total market shipments.

6. The future market for cloud computing power is overseas.

7. Mining pools are not standardized enough, and cooperation with independent third-party organizations is the future development direction.

8. Most of the countries that hold a progressive and positive attitude towards digital asset mining are developed countries, and the future regulatory direction is positive.

9. 2019 is the first year of financial services centered around digital assets. In the future, more financial products will emerge and competition will become more intense.

10. Most altcoin mining uses GPU mining, mainly concentrated in North America and Europe.

11. PoS is being accepted by the industry at an accelerated pace, and can form an ecosystem together with DeFi, exchange lending and other services. The current average return is 8%-12.5% ​​annualized.

2020 Predictions:

1. It is estimated that Bitmain, Canaan Creative, MicroBT, and Ebang International will occupy 63%, 18%, 10%, and 7% of the SHA256 ASIC mining machine market in 2020, respectively.

2. The third block reward halving has limited impact on Bitcoin prices in the short term, but will provide momentum for Bitcoin prices in the long run.

3. Overseas mining farms are expected to be built at a faster pace in 2020.

4. Mining pools will gradually join in copycat mining, but while the market potential is huge, there are also great risks.

5. More cloud computing products will be launched and will be more popular in overseas markets.

6. Altcoin mining may gradually move from GPU/CPU to FPGA, and in the long run it may be gradually taken over by ASIC mining.

7. Derivatives of virtual currencies will be gradually launched and developed into customized services. Compared with the size of traditional finance, the derivatives market of digital assets has huge market space.