Canaan Director Sheds Light on Surviving the Crypto Winter as a Miner Being Sufficient Enough for the Future
Bitcoin mining industry almost came to a halt during 2018 as a result of many different factors. The cost of energy worldwide has risen, through inflation and through increased demand for fuel and power. As the price of these bills rises, profit margins shrink, so, you end up paying more money to mine less Bitcoin and thus, your reward is reduced. Sadly, through 2019 energy bills are only expected to rise. Bitcoin mining uses very powerful computer products such as graphics cards that frankly cost a lot of money.
To weigh in on this situation, Cheng Feng, the sales director at cryptocurrency mining giant Canaan sat down for an interview with ChainDD. He said that just surviving the crypto winter is good enough for his firm and similar companies.
“A couple of years ago, we stored up enough ‘ammunition' so the company is resilient now. If the bear market goes on for three years, it is not a problem. After all, the cost is quite low and we are also doing business in the field of AI chips and other investments.”
When asked why 3 major mining equipment producing firms failed to launch their IPOs, even though they were awaited by many, he replied:
“The main reason is that the mining industry hasn't gained wide recognition. When we started our application, the market condition was relatively good and profitability was presentable. However, for Hong Kong's capital market, “sustainable profitability” is of more importance and our industry is under too much influence of market fluctuation. In the third and fourth quarters, we could only operate at break even. In addition, the revenue models of these several miner manufacturers suffer the problem of lack of variety and therefore, we are in the process of AI transition.”
Feng thinks that even if the crypto winter goes on for an additional 3 years, it doesn’t matter. The cost of doing business for cryptos is quite low and AI pivot is highly profitable for their company.