Contentious EIP-1559 Seeking Community Consensus as Ethereum Miner Revenue Hits an ATH

Contentious EIP-1559 Seeking Community Consensus as Ethereum Miner Revenue Hits an ATH

Ethereum fees are the talk of the town; everyone from small users to even big players feels the brunt of it.

Even some projects have fallen victim to the high fees, which are yet again on the rise. The average transaction fee in USD is back near ATH above $23; in ETH terms, it is at 0.013, and gas prices are nearing 200 Gwei again.

Last month, Ethereum miners raked in nearly $830 million in revenue, over $325 million of which was from transaction fees. In February so far, the revenue has reached $678 million, with fees accounting for more than half of it ($357 million).

And here comes Ethereum Improvement Proposal (EIP) 1559, which will bring the largest change to how the users will bid for blockspace. The proposal targets to decrease network fees by increasing block size.

First proposed in March 2019 by Ethereum co-founder Vitalik Buterin, the EIP 1559 aims to offer better UX and security while preventing economic abstraction, which is the ability to pay fees in an asset besides Ether.

As we reported, the world’s largest asset manager, Grayscale, praised the proposal, which it said may also serve as a deflationary mechanism and creating a “positive feedback loop for Ether’s price.”

While many are in support of it like F2Pool, not everyone is in favor.

Bitfly, one of the largest Ether mining pools, is one of those who are against the proposal and believes the update would put Ethereum’s future at risk. In January they said,

“We have been supporting Ethereum with its perfect imperfections since genesis and would like to encourage the developers to look into solutions that do not rely on fee burning in order to get the buy in of the miner community for EIP-1559.”

Flexpool, which is a tiny mining pool, has been against the proposal and gaining some support from other pools.

As such, a community call will be held next week to share their opinion on the update that is supposed to burn the majority of the transaction fee instead of offering it to the network miners.

The call will bring all the stakeholders together to understand the “pressing need of the proposal and address any concerns in hopes of coming to a community consensus.”

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Author: AnTy

SEC Filing Reveals Bitcoin Miner, Argo Blockchain, Purchased 172.5 BTC ($6M) In January

SEC Filing Reveals Bitcoin Miner, Argo Blockchain, Purchased 172.5 BTC ($6M) In January

  • Argo Blockchain holds a total of 501 Bitcoin in its coffers as part of its asset management strategy.

U.K.’s leading Bitcoin mining firm, Argo, purchased 172.5 BTC in the past month to bring its total BTC (or its equivalent) portfolio to 501 BTC, or approximately $18.37 million at current prices. According to a public statement from the company, the additional BTC were purchased in the second half of January anywhere between the $30,000 lows and $36,000 highs recorded during that time.

In January, Argo added to its crypto portfolio by adding 93 mined BTC (or equivalents), a slight drop from the 96 BTC mined in December. Argo’s total mining capacity is currently 787 petahash (SHA-256) in addition to 280 Megasols of equihash mining capacity.

The statement further confirms a Share Purchase Agreement with, the Canadian data center provider, for the strategic purchase of two data centers in Quebec, which house some of Argo’s mining equipment. The acquisition aims at providing Argo with long term stability and direct control over the facilities. Peter Wall, Chief Executive of Argo, said,

“I am thrilled that Argo has delivered our best month in the company’s history in both mining revenue and profits. The year has started very strong.”

“I’m also pleased we have signed the Share Purchase Agreement with, an important step in us closing this transaction and taking over those facilities ourselves.”

Across 2019, Argo Blockchain significantly increased its hashing power by adding over 30,000 PoW miners in its facilities and 10,000 more in 2020.

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Author: Lujan Odera

Nasdaq-Listed Bitcoin Miner Marathon Buys 4,812 BTC ($150M) for Treasury Reserves

Nasdaq-Listed Bitcoin Miner Marathon Buys 4,812 BTC ($150M) for Treasury Reserves

Marathon Patent Group, the North America-based Bitcoin mining company, has purchased 4,812 Bitcoin for an aggregate price of $31,168.

The company purchased $150 million worth of Bitcoin through the New York Digital Investment Group (NYDIG). Merrick Okamoto, Marathon’s chairman & CEO said,

“By leveraging our cash on hand to invest in Bitcoin now, we have transformed our potential to be a pure-play investment into a reality.”

These BTC are held in Treasury reserves, which Marathon describes as a better long-term strategy than holding US Dollars.

The cryptocurrency miner has contracted to purchase 103,060 mining machines, which are expected to be delivered and deployed by the end of the first quarter of 2022. This capacity, based on the current difficulty rate, which is at an all-time high of 20.82 trillion, Marathon would be able to produce 55-60 BTC per day.

As of writing, BTC is trading around $35,000, down 23.5% from its all-time high of $42,000 hit earlier this month.

Meanwhile, the shares of Marathon are $18.30, down from $26.39 on Jan. 8 but up from $0.40 on April 1st, 2020.

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Author: AnTy

UK’s Leading Crypto Miner Increases Bitcoin Holdings by 30% in November

British digital currency miner Argo Blockchain reported an average monthly mining margin of 57% for November compared to 40% in October.

Last month was a good one for the price of Bitcoin, as it rallied 45%, and as a result, good for companies working with the cryptocurrency as well.

Argo Blockchain reported higher revenues for the period, recording a surge from £1.2mln to £1.48mln.

“This has been an extremely exciting month for cryptocurrency miners,” Argo chief executive Peter Wall said in a statement.

“We have seen the value of Bitcoin climb exponentially to over £14,000 as investors and payment service providers are turning their interest to cryptocurrencies.”

Despite the firm mining 115 Bitcoin compared to 126 BTC in October, this has been attributed to changes in the mining difficulty and Zcash halving. In total, the firm has mined 2,369 BTC year-to-date.

As of November 30, the London Stock Exchange-listed company held 178 BTC worth nearly $3.5 million, up from 137 BTC on October 31. The company also has a mining capacity of 16,000, increased from 5,000 machines in the first half of 2019. Wall said,

“At Argo, we are continuing to prioritise efficiency in our mining operations, and this has enabled us to increase our revenue by 23% this month and achieve our highest mining margin since the halving earlier this year.”

The shares of Argo are trading around $11, up 147% in the past two months.

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Author: AnTy

Canaan Reports a Q3 Net Loss $12.3 Million Despite the Crypto Market Comeback

Canaan Creative, a Nasdaq listed Bitcoin miner manufacturer, has reported another loss in Q3 according to the latest unaudited financials released on Nov 30. This time the number jumped to $12.3 million, which is around four times the $2.38 million reported for the previous quarter. Contrary to the BTC market performance, the firm appears to be struggling after its share price tumbled on the announcement of the Q3 results.

Revenues also dropped to $24 million compared to $100 million in Q3 of 2019; however, this was a 5% increase from Canaan’s Q2 revenues this year. The financial report quotes a figure of $26 million for cash equivalents, which is an 18% jump from its previous $22 million in Q2. It further highlights that Canaan has allocated $30 million into short-term financial products where it can withdraw liquidity conveniently at any time.

Canaan’s CFO, Quanfu Hong, defended the performance and attributed a big part of the loss to reduced activity at the onset of the COVID-19 pandemic. Hong noted that demand has started to increase, and they are set to be back on track with Q4 pre-sale orders,

“Demand for mining machines in the market continued to rebound in Q3 2020. We have received a large number of pre-sale orders scheduled for delivery starting in the fourth quarter.”

Nonetheless, Canaan is still taking a hit on its market share according to the latest stats; its terra hashes sales tanked to 2.9 million compared to 3.7 million in Q3 of 2019. On average, one T/H costs $8.27 this year, while last year’s price was well over $27 per T/H. Its competitors Microbt, Bitmain, and Ebaang, continue to capitalize on the shortcomings.

Currently, one Canaan share price is trading at $5, having lost 13% within the past 24 hours. Like Bitmain, the firm has also been a victim of internal wrangles, which saw some of its directors dropped from the registry back in July.

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Author: Edwin Munyui

Jihan Wu Looks to Split Bitmain’s AntMiner Supply Chain & Manufacturing Process

The power tussle in the largest Bitcoin miner maker, Bitmain, is now threatening to essentially hard fork its operations for the production of AntMiner equipment.

On July 16, one of Bitmain’s co-founder, Wu Jihan registered a new firm in Shenzhen, China. The new firm is known as Guiji Yanghang which is an offshoot of a recently registered firm called Beijing Guiyuan Dalu which Wu controls.

Wu engineered the ouster of Micree Zhan Ketuan, Bitmain’s co-founder, late last year after a protracted power tussle between the two. However Zhan managed to retake the control of the firm in June this year after the Chinese authorities sided with him.

According to a source privy to Wu’s plans, the new firm is meant to separate the supply chain from the production process in regards to AntiMiner equipment. This is seen as a counter move to Zhan’s taking over of the Beijing Bitmain Shenzhen factory following his return at the apex of the company last month.

Wu’s move is the most recent in a power tussle saga which could further confuse the firm’s international clients willing to buy the AntiMiner equipment. At the moment, for instance, it still remains unclear what faction will own the AntiMiner brand as well as its shipment logistics. It is also unclear which faction will provide post-sale services.

Last Friday, Wu in an internal letter explained that he had to come back to the firm and take over the leadership in order to save Bitmain from collapse following cash flow issues running into hundred million dollars, reportedly caused by Zhan.

The letter also explained that Wu has started a process of another supply chain to counter the Shenzhen factory’s role which affects the shipment of the AntiMiners.

In a notice published in the company’s WeChat account that is controlled by Wu, the firm apologized to its global clients saying that June shipments are likely to be delayed following external interference of the firm’s management process.

Having been ousted in October last year, Zhan, who is the largest shareholder in Bitmain, was granted control of the firm by the Chinese authorities on June 3.

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Author: Joseph Kibe

Canaan Stock Continues to Tumble As Rumored Internal Struggles Sees 3 Directors Removed

Canaan Creative, a Nasdaq listed Bitcoin miner manufacturer, has dropped some of its directors from the company’s registry according to reports from Chinese media. The firm appears to be experiencing an internal dispute going by the unfolding events, although no official announcement has been made. Following the changes, Canaan’s Chinese registry now lists Nangeng Zhang as the only director, dropping four other officials.

Zhang, who runs the company’s Beijing office, had obtained Canaan’s official seal and business license from the Hangzhou subsidiary in late June. This move was meant to acquire majority control in what now appears to be an end to its means.

Officials that were dropped from Canaan’s registry include public affairs director Songhua Tu, on-executive director Qifeng Sun, CFO Jiaxuan Li, and Co-chairman Jianping Kong. Notably, all had been listed as directors apart from Songhua Tu.

The update, which was registered on July 6, now recognizes Zhang as Canaan’s executive director and general manager. It goes on to add Meng Lu as a supervisor while retaining Li and Kong as part of Canaan’s core team. At the moment, the implications of this move are still unclear, but Kong, who previously acted as Co-chairman, has said that he did not withdraw from this position.

According to a statement shared with The Daily Economic News, Kong noted that as far as Canaan’s registration goes, no changes have been made to its leadership:

“I’m not familiar with this,” he said when asked about his removal from the company registry. “I am currently on vacation due to a foot injury. I didn’t withdraw from my management position.”

He went to say that Canaan’s entire company structure is listed in the Cayman Islands and not China. Consequently, its holding subsidiaries in Beijing and Hangzhou can only be affected by changes made to the Cayman registered entity, Jianan Technology. This feud has since been compared to Bitmain’s struggles, which saw the company in limbo after Micree Zhan and Jihan Wu differed on control.

Source: TradingView $CAN

As far as financials go, Canaan reported a net loss of $150 million in 2019 and another $5.6 million within the first quarter of 2020. Its share price on Nasdaq has also been on a downtrend since the May bitcoin halving that is yet to favor bullish stakeholders like crypto mining rig manufacturers.

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Author: Edwin Munyui

Bitmain Power Struggle: Truce is Over & Fight for Control Resumes; Bitcoin Miners Could Suffer

The struggle between the co-founder of bitcoin’s biggest miner manufacturer is not looking to end anytime soon. It hasn’t even been two weeks, and they are back at it.

The fight restarted when Bitmain co-founder Micree Zhan or Zhan Keutan attempted to redirect customer payments to a new bank account in a Wechat post at midnight. Dovey Wan, founding partner at Primitive Crypto tweeted,

“This marks the DEATH of Jihan in the Bitmain power struggle IMO: Bitmain just announced it will change the miner sales payment bank account & wiring info into a company Micree serving as legal representative. Micree now financially takes over Bitmain’s core business.”

It may not be a death blow to Jihan yet, but sure seems like a hard blow to the bitcoin miners who are awaiting their big orders.

The infighting between the co-founders could interrupt the product deliveries as it affects the shipments and supply chain. While some are reluctant to buy bulk orders, it is not stopping others from buying machines from Bitmain.

Last week, Core Scientific announced that the hedge fund Horizon Kinetics extended its partnership with the US-based blockchain hosting provider and upgraded its crypto service to Bitmain Antminer S19 and S19 Pro models.

Recently, Core Scientific purchased 17,000 of the latest generation crypto miners from Bitmain.

Source: Twitter

On Monday, Hive Blockchain technologies also announced that it had ordered 200 Bitmain Antminer S17e 60 terahash per second (TH/s) SHA 256 mining machines to scale up its mining power at its bitcoin mining operation in Quebec.

With the cost for the S17e machines approximately US$950 per unit, the purchase was just under US$0.2 million, and the company is anticipating delivery in July, but that’s to be seen. F2Pool noted,

“The slowdown in hashrate growth may continue, as many of the large hardware orders reported recently won’t deliver until late in the summer.”

So far, both the co-founders are claiming to be the company’s real CEO. While Zhan controls the Shenzhen headquarter and factory Wu has the bank accounts and support of the board.

The rivals did reach an agreement to resume deliveries less than two weeks ago. On June 23, the company even published an article to reassure its customers that they have resolved the issue only to delete it within a few hours.

It hasn’t been 24 hours to Zhan’s document with changed sales information, (including the bank account for payments, after-sale service website, and e-mail address) that another official Bitmain WeChat account associated with Wu revoked the document stating it contained false information.

In the new document also posted on the website, citing “abnormal conditions,” Zu said “criminals” are trying to impose Bitmain representations.

It looks like Wu is here to fight, and customers will also have to pay the price.

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Author: AnTy

Bitcoin Mining Revenue from Transaction Fees Shot Up to its Highest Level Since July 2019

In anticipation of the miner profitability to be reduced by 50%, that is halving, the percentage of BTC mining revenue generated from transaction fees shot up to its highest levels since July 2019, as per Coin Metrics.

“This is a positive signal for miners, as an increase in transaction fees can potentially make up for some of the lost block reward revenue after the upcoming halving.”

In the weeks leading up to the halving, it went above 6% which usually remains around 2%. In mid-2019, it went up to as high as almost 12%.

Source: Coin Metrics BTC Fees to Revenue

It is the result of a spike in bitcoin average transaction fee which also climbed to $3.19 on May 8th, last seen in July. During this gap, the fees remained below a dollar for the most part. The highest this fee has been was on December 22 during the 2017 bull run.

Besides fees, mempool data shows a massive backlog of bitcoin transactions. At one point today, 34.98k bitcoin transactions were waiting to be confirmed and processed by Bitcoin miners.

Source: Mempool Transaction Count

The revenue generated from both block rewards, which is now officially 6.25 BTC, and transaction fees are crucial for a proof-of-work (PoW) blockchain, as this revenue provides an incentive for miners to secure the network.

In the long-run, transaction fees will become an increasingly important part of bitcoin’s security model as the block reward continues to be cut in half every four years.

“As block rewards diminish, a larger portion of miner revenue will need to come from transaction fees. Therefore the percentage of BTC mining revenue generated from transaction fees is an important measurement for a blockchain’s long term health and security.”

Miners to be no more the biggest seller of Bitcoin

The reduction in block rewards also means, “miners will cease to be the biggest seller of bitcoin,” points out on-chain analyst Willy Woo. In turn, “exchanges selling their BTC fees collected into fiat” will bring the biggest sell pressure.

These exchanges or “tax agents on traders” will extract fees in BTC that will be dumped onto the markets and then sold for fiat the same as miners do.

Unlike traders buying or selling, where every trade has a buyer and a seller as such smart money buying or selling, miners and exchanges are unmatched sell pressures on the market.

The volume is already growing, on the spot exchanges the “real volume” hit $4 billion recently while the total aggregate daily volumes of bitcoin futures was $27 billion, as per Skew.

“The rise of the BitMEX style futures exchanges has made an irrevocable footprint on the price, we have much more sideways now from the additional sell pressure. While price moves more sideways, this creates an environment where large leverage traders have an easier time strategically liquidating the bulk of traders from their positions,”

and as such more volatility, explained Woo.

From here on in, futures exchanges that bring liquidity to markets will be the “largest bearish pressure on Bitcoin” further slowing down the price increase.

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Author: AnTy

China-based Bitcoin Miner Manufacturer Ebang Files for a $100M IPO with the US SEC

The China-based ASIC Bitcoin miner manufacturer Ebang is applying for a $100 million IPO in the US, as per the form filed with the US Securities and Exchange Commission on April 24, 2020.

In this IPO, Ebang is offering Class A ordinary shares at a value of HK$0.001 (US$ 0.00013) per share. The company intends to list its shares on the New York Stock Exchange (NYSE) under the symbol “EBON”.

One of the leading bitcoin mining manufacturers, Ebang has listed Hong Kong-based AMTD Global Markets Limited and US-based Loop Capital Markets as joint underwriters for its IPO.

2019 was worse than 2018

The company reported a revenue of $319 million in 2018 which declined considerably in 2019 to $109 million. One of the leading ASIC (application-specific integrated circuit) chip designers made 82% of 2019 revenue on designing these chips for bitcoin mining, primarily from selling Ebit E12 Series machines and E10 Series machines.

Both the number of these chips and their average price declined in 2019 vs the previous year. While Ebang sold 415,930 mining chips at an average price of $737 in 2018, last year it sold 289,953 chips at less than half of the rate ($304). Ebang reported,

“The decrease in the Bitcoin price in 2018 and the first quarter of 2019 resulted in a material decrease in our sales volume and in the average selling price of our Bitcoin mining machines. Although the Bitcoin price started to recover in the second quarter of 2019, our operations generally lag behind the increase of Bitcoin price.”

The company had a gross loss of $30.6 million in 2019 compared to the gross profit of $24.4 million in 2018. The net losses meanwhile have been $11.8 million and $41.1 million in 2018 and 2019, respectively.

Bitcoin price and COVID-19 affecting adversely

In its Form F-1, Ebang reported that its operators are majorly dependent on the price of bitcoin, as such “expected to continue to be significantly impacted by the fluctuation of Bitcoin price.”

Bitcoin’s price has a direct impact on the “market demand” of the company’s mining machines, a trend it expects to continue.

The global coronavirus COVID-19 outbreak has also “adversely affected” the price of bitcoin and lower prices “may continue in the near term and adversely affect our business of operations and financial condition.” Ebang said,

“We and our customers have experienced significant business disruptions and suspension of operations due to quarantine measures to contain the spread of the pandemic, which may cause shortage in the supply of raw materials, reduce our production capacity, increase the likelihood of default from our customers and delay our product delivery.”

This could be why the manufacturer is now focused on developing 5 nm ASIC chips and mining machines for non-Bitcoin cryptocurrencies such as Litecoin (LTC) and Monero (XMR).

The US is the way after failed attempts in Hong Kong

This isn’t Enbang’s first attempt to go public. Previously, in June 2018, the company filed for an IPO in Hong Kong and failed the same as Canaan. And just like its China-based rival, Ebang has sharply lowered its fund raising target from $1 billion.

Canaan Creative went public last year and raised $90 million (down from the already cut down targeted amount of $400 million). Since listed on Nasdaq in November, the shares of Canaan (CAN) have taken a beating and are now down by over 50%.

The largest bitcoin mining manufacturer Bitmain also tried the Hong Kong route but failed just like the other two. Last year there were reports that Bitmain is also looking to file for an IPO in the US.

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Author: AnTy