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Four Firms to Control Nearly the Entire Bitcoin Mining Industry

A report by TokenInsight estimates these firms will suck up nearly the entire market share by the end of 2020.

An annual report by TokenInsight released today predicted that 98% of the market share for Bitcoin miners will be concentrated in just four firms by the end of 2020. It estimated that Bitmain, MicroBT, Canaan, and Ebang will edge out the rest of the competition by a further 3 percent, on top of their current combined 95% market share.

Johnson Xu, an analyst at TokenInsight, told Decrypt that the increased market share is due to a network effect. He said, “The top four companies consistently have had strong market power in the past; going into the future, this strong market power will translate into the dominant positions of the top four companies.”

He said that they won’t find too much competition from elsewhere, since the mining hardware industry has such a high barrier to entry; companies need to spend a lot of money on research development, in addition to global logistics and marketing to survive in it.

In the report, TokenInsight predicted that Bitmain’s market share will increase from 55-58% in 2019 to 63% in 2020; and Canaan’s will increase from 10%-15% in 2019 to 18% in 2020.

The report’s optimistic estimate on Bitmain’s future was based on the fact if cut off its flagging AI business line, Xu said. He reckoned this was “due to high cost and low profitability.” Read More...