SHANGHAI, Oct. 23, 2024 /PRNewswire/ — In recent years, with the acceleration of global digital transformation, blockchain technology has rapidly evolved into a key component of modern economic systems. From financial services and supply chain management to data security, blockchain application scenarios are continuously expanding, accelerating the rise of decentralized economic models. At the heart of this transformation, blockchain hardware plays a fundamental role, ensuring the efficiency and security of blockchain networks. The release of the 2024 Global Blockchain Hardware Industry White Paper by Frost & Sullivan aims to provide industry players with deep market insights and highlight key trends and future opportunities in the sector. Masu.
This paper delves into innovations in crypto mining hardware as well as the future of blockchain technology in emerging areas such as Internet of Things (IoT) integration and distributed storage. Through comprehensive global market analysis and reliable data, this report provides valuable strategic guidance to industry participants and investors, helping them seize opportunities in the competitive Blockchain Hardware market.
1. Overview of the global blockchain and virtual currency industry
1.1. Introduction of blockchain
Introduced in 2008, blockchain is a distributed ledger technology designed to record both financial and non-financial transactions involving items of value. It acts as a distributed database, compiling records into blocks, each timestamped and linked to the previous block. Once data is entered into a block, it becomes immutable and cannot be modified or tampered with. The technology operates in real-time and avoids the need for transaction verification by central authorities or third-party financial institutions. This allows each node to generate immutable records, ensuring secure, efficient, trust-free, and transparent peer-to-peer transactions. Due to its wide-ranging benefits, blockchain technology can be adapted for use in countless areas, including cryptocurrencies, payments, financial services, cloud computing, and cybersecurity, to name just a few.
1.2. Mining machine payoff period
The payoff period of a Bitcoin mining machine is determined by several important factors, including the price of the machine, the hash rate, the cost of electricity, the Bitcoin market price, the total hash rate of the network, and the difficulty of mining.
As the demand for Bitcoin increased, the total hashrate increased sharply, reducing daily revenue for miners and lengthening the period before profits were realized. Two main formulas are used to calculate the payoff period. The first formula calculates your daily earnings based on factors such as the Bitcoin market price, your machine’s hash rate, and your electricity bill. The second formula determines the payoff period, indicating how long it will take for the mining machine to generate enough revenue to cover its initial costs.
The Bitcoin market price is affected by supply and demand, and recently the total hash rate has increased sharply, resulting in lower daily returns and longer payoff periods for Bitcoin mining machines. Utility costs for mining operations in states such as Texas, Wyoming, Washington, and Kentucky range from US$0.1 per KWH to US$0.12 per KWH. Electricity costs are even lower in some areas.
2. Overview of the global blockchain hardware industry
2.1. Definition and classification of blockchain hardware
Blockchain hardware refers to electronic devices designed to support and facilitate the operation of blockchain technology and enable the performance of various blockchain-related functions. Typically, blockchain hardware is primarily used for cryptocurrency mining, where contributing computing power, storage, bandwidth, and other resources to the network rewards owners with a certain cryptocurrency. High performance devices such as ASIC miners continue to dominate this space.
Additionally, the market is evolving and blockchain hardware is increasingly being utilized in other emerging applications. These include distributed storage and compute solutions such as Golem, which leverage idle computing power. Additionally, blockchain hardware is also gaining traction in the fields of Internet of Things (IoT) and edge computing, where secure and transparent data exchange between devices is ensured through blockchain technology.
2.2. Blockchain hardware value chain
The Bitcoin industry consists of five main segments: hardware supply, mining farm and pool operations, trading, and payment processing. Canaan is the first Bitcoin mining hardware company to go public and ranked second in terms of computing power sold among all Bitcoin hardware providers in the year ended December 31, 2023. Hardware suppliers such as CAN) are primarily involved in: Mining machine IC design, manufacturing, and sales. This segment plays a key role in the industry’s infrastructure, providing specialized equipment needed for efficient cryptocurrency mining.
A mining venue typically refers to a physical site where an operator provides storage services for customers’ mining hardware. As mining operations grow in size, these locations become increasingly important and require significant infrastructure and energy resources. On the other hand, operating a mining pool involves coordinating the collective computing power of miners, allowing them to share resources and divide mining rewards more evenly. This approach helps individual miners reduce the volatility of their returns and increase their chances of successfully mining a block.
Trading services are provided by cryptocurrency exchanges to facilitate the buying and selling of cryptocurrencies by consumers. These exchanges are critical to liquidity and price discovery for Bitcoin and other digital assets, and influence market trends on a global scale.
Payment services are provided by Bitcoin payment processors and enable merchants and businesses to accept Bitcoin payments from customers for goods and services. This segment is essential to integrating Bitcoin into the broader economy, enabling its use as a medium of exchange, and fostering adoption among a wider audience.
3. Market trends in the blockchain hardware industry
Growth of decentralized finance (DeFi)
The rapid expansion of decentralized finance (DeFi) is bringing major changes to the global blockchain hardware market. As platforms like Uniswap grow in popularity, the demand for more advanced and scalable blockchain infrastructure becomes important. The move to decentralized exchanges (DEXs) reflects a broader movement in the financial industry, highlighting the need for transparency, security, and user autonomy in financial transactions.
This trend is evident in Uniswap’s significant increase in trading volume, which skyrocketed from USD 59 billion in 2020 to over USD 1 trillion in 2023. Additionally, the ratio of DEX to spot trading volume on centralized exchanges (CEX) has been steadily increasing, reaching nearly 14%. These metrics highlight the growing market share of decentralized platforms and their impact on the entire blockchain ecosystem.
In conclusion, the growth of DeFi signals a fundamental shift in the blockchain landscape, as evidenced by Uniswap’s performance and the increasing dominance of DEXs. This evolution highlights the critical need for continued innovation in blockchain hardware to support the expanding DeFi ecosystem and ensure it can meet the demands of a rapidly changing financial environment. Masu.
Increased adoption of cryptocurrencies and CBDCs
The increasing adoption of cryptocurrencies and CBDCs is a pivotal trend shaping the blockchain hardware industry. The number of virtual currencies has rapidly expanded from just 636 in 2017 to more than 13,000 by July 2024, and this rapid expansion has not only been accepted by the market, but has also increased the global popularity of digital currencies. This shows that integration into the global financial system is progressing. This surge reflects the growing recognition that cryptocurrencies are legitimate financial instruments, necessitating the development of advanced blockchain hardware to support their widespread use. .
Governments are also playing an important role in this trend by approving and developing central bank digital currencies (CBDCs). Countries such as Nigeria and the Bahamas have already launched CBDCs, and major economies such as the European Union and China are actively exploring similar initiatives. These government-backed digital currencies further validate the role of digital assets and pave the way for broader public adoption.
As market forces and government support converge, the demand for secure and scalable blockchain infrastructure will only increase. This trend not only highlights the importance of cryptocurrencies in the modern economy, but also the critical need for robust hardware solutions to sustain and drive the growth of this rapidly evolving market. .
The Rise of NFTs and Digital Assets
The rise of NFTs (non-fungible tokens) and digital assets continues to be a major trend shaping the blockchain hardware industry. As of 2023, the global NFT market size is valued at approximately $48.74 billion, up from just $94 million in 2020. This explosive growth is being driven by the increasing use of NFTs in various fields such as digital art, gaming, and collectibles. Notably, digital assets account for the highest revenue share in the NFT market, with companies such as Nike (NYSE:NKE), Walt Disney (NYSE:DIS), and Kering SA (EPA:KER) leveraging NFTs to and create something new. Source of revenue. These brands’ NFT efforts highlight the commercial viability of digital assets and highlight a growing trend where major companies are not only adopting but also innovating in the NFT space.
This trend shows that the blockchain hardware industry must continue to innovate to support the growing needs of the NFT market. As more sectors adopt NFTs, the demand for advanced, scalable and secure blockchain hardware solutions will only increase, making this a critical area for the future development of the industry.
Technological progress and green technology
The global blockchain hardware industry is being shaped by significant technological advancements and green technologies. As seen in the graph, Bitcoin mining hardware has made significant progress in reducing energy consumption, improving energy efficiency from 516.6 J/TH in 2016 to just 29.6 J/TH in 2024. This reduction highlights the continued innovation in hardware design aimed at supporting Bitcoin mining hardware. Achieve more powerful yet less energy consuming operation. Similarly, Ethereum’s transition to proof-of-stake has significantly reduced energy usage from 94.0 TWh to 3.4 TWh per year, highlighting the industry’s transition to more sustainable blockchain solutions.
In addition to energy savings, the adoption of advanced cooling technologies such as liquid cooling systems reflects the industry’s move toward greener operations. Companies like Canaan (NASDAQ: CAN) and MicroBT are leading this change by introducing hardware that improves performance while minimizing environmental impact. The use of renewable energy in mines is increasing, now accounting for up to 78% of energy sources, further underscoring the industry’s commitment to sustainability. These developments demonstrate that future growth in blockchain hardware will be driven by continued innovation and a focus on green technology.
The above content is just a small portion of the white paper. Click the following link for the full report: https://www.froschina.com/content/insight/detail/67170c4b05ea2f256f410a63
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Source Frost & Sullivan
