New Intel Bitcoin mining chip challenges reign of China's mining firms
Intel Corp.'s new Bitcoin mining chip may turn out to be the first major challenger to the Chinese rig manufacturers that have dominated the market for years. The Santa Clara, California-based chip making giant unveiled its crypto mining initiative earlier this month and the first generation BonanzaMine chip in January. Jack Dorsey’s digital payment company Block Inc., and two mining firms Griid Infrastructure and Argo Blockchain will receive the first batch of the chips later this year.
Chinese manufacturers Bitmain and MicroBT have a lion’s share of the Bitcoin mining hardware market due to the proprietary technology they use to make their high-performing chips. Few competitors appear to have been able to make a chip that can match them until now.
Bitcoin mining, which is earning rewards in Bitcoin by using computers to secure the cryptocurrency’s network, has become a lucrative business amid the surge in the price of Bitcoin in recent years, enriching the rig makers along the way. The mining industry raked in $15 billion in revenue in 2021, more than double the previous year, according to research from The Block.
Intel’s entry could weaken the Chinese manufacturers’ pricing power and offer better maintenance services given the company’s close proximity to the miners in North America, industry participants said. The region dethroned China as the world’s Bitcoin mining hub as Beijing banned crypto mining last May.
“Having a U.S.-based manufacturer with the size, scale and credibility like Intel is fantastic for the entire crypto industry,” said Dave Perrill, chief executive of Eden Prairie, Minnesota-based Compute North, which provides Bitcoin miners with data centers to operate their machines. “Competition is a good
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