Mapping out crypto mining

Despite the ongoing bear market, cryptocurrency mining is still a very lucrative business. In less than a decade, crypto mining has become a multi-billion-dollar industry creating entirely new businesses. In 2017 alone, Bitmain, the leading mining-hardware manufacturer, generated $2.5B in revenue.

The role of miners is often debated in the crypto community. Some believe that miners are the ones that determine the changes in a blockchain’s consensus protocol while others believe miners are effectively workers “hired” by a network to provide a service. While the role of miners can be debated in the community, there is one undebatable fact: miners provide a vital service for securing a blockchain network and its transactions.

As the crypto industry continues to develop, the influence of miners will be increasingly apparent. In 2018 alone, we’ve seen multiple 51% attacks, where a small number of miners attempted to gain control, on networks like Verge and Electroneum. Mining manufacturers also assert their influence through the release of dedicated mining products, built for the specific purpose of mining one or more cryptocurrencies. Core developers of the Sia network forced a hard fork of the network to prevent dedicated-mining hardware from working on the Sia network.

In this piece, we will map out the state of the current crypto mining industry and its players. We categorized mining entities into three branches: (1) manufacturers, (2) contractors, and (3) pools, with each playing a distinct role.


Manufacturers are businesses that develop hardware for mining cryptocurrencies. These hardware devices can come in the form of chips or the mining rigs that host them. Because of the different mining algorithms implemented by different blockchains, there are a variety of chips for crypto mining. These chips include ASICs, CPUs, GPUs, or FPGAs.


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Pools are entities where cryptocurrency miners pool their computing power to mine one or more networks. The participants of these pools work together to mine cryptocurrencies and distribute their rewards, relative to the amount of computing power contributed. This allows for a smoothing out over time as rewards received by any participant in the pool are shared by all of its members. (The map at the top of the post segments the pool by which of the four primary mineable assets they are working on.)


Contractors provide cloud-mining services specified by a contract. Customers of cloud mining service contractors can purchase a contract to rent out a certain level of mining capacity to mine for a specific duration. Customers are not required to purchase or maintain their own hardware miners as the contractors maintain these miners. This makes contractors the crypto-mining equivalent of Amazon Web Services, allowing customers to purchase variable amounts of mining resources for whatever period they choose.


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Mapping out crypto mining written by Steven Zheng @ October 24, 2018 Steven Zheng

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