Canaan Creative has launched what it hopes will be the future of the blockchain and the first of a series of releases that will improve its position as it battles for increased market share in the bitcoin mining device market.
Dubbed the AvalonMiner Inside, the smart TV also doubles as a bitcoin mining device, and while some dismiss it as a marketing stunt, Canaan believes that this could be the future of bitcoin mining.
The ASIC Killer?
Canaan Creative is the world’s second-largest maker of bitcoin mining equipment behind Bitmain. While Bitmain controls an estimated 70 percent of the mining rig market in addition to its substantial bitcoin mining operations, Canaan controls about 17 percent.
Canaan’s ‘AvalonMiner Inside’, has the capacity to process 2.8 trillion hashes per second which might sound like a lot, until the capacity of existing ASIC rigs is taken into consideration. The most powerful mining rig in Canaan’s current inventory can process 11 trillion hashes per second, which means that the AvalonMiner Inside only has about a quarter of the power available to a regular mining rig.
Even including the added features like voice control, real-time bitcoin mining profitability display and a link to Canaan’s entertainment platform where users can pay for content and gifts using mined bitcoin, this still does not seem on the surface to be a device that is practical.
The catch however, is that Canaan has not built a device that is intended to directly compete with Bitmain’s Antminer or other comparable ASIC miners. What Canaan is trying to do is to build a new generation of blockchain-enabled IoT devices that blend into the background.
These devices will expand the blockchain and increase its hashrate while simultaneously reducing the centralization risk inherent to the dominant model of large bitcoin mining farms. Instead of taking on Bitmain in a potentially painful price war on a turf that has only one clear leader, Canaan hopes to democratize bitcoin mining by making people buy mining devices for reasons other than bitcoin mining.
A network of five million networked devices operating at 25 percent of an ASIC miner’s capacity will, in theory, produce better results than a network of 500,000 ASIC miners working at full capacity.
Criticisms and Upcoming IPO
Some, however, insist that the device is little more than a self-promotion gimmick, offering no real utility to users. Speaking to the South China Morning Post recently, Xiao Lei, a bitcoin analyst bsed in Beijing said:
“It looks more like hype. It will be more meaningful if these companies are able to embed the mining function into existing major TV brands.”
CCN reported in May that Canaan’s big rival Bitmain is set to go public in a record-breaking IPO. Canaan itself recently filed for its own upcoming IPO in Hong Kong estimated at $1 billion, and it no doubt has an eye on Bitmain’s existential threat with the launch of the new device.
An excerpt from its IPO filing reads:
“If we cannot maintain the scale and profitability of our single line of system products and, at the same time, offer new products, our ability to continue to grow will suffer.”
The Chinese government’s stance on cryptocurrency mining and exchange activities poses another significant risk to Canaan’s business. According to the South China Morning Post, this is a major motivation for Cannan’s proposed plan to list in Hong Kong instead of mainland China.