Ebang International wants to set up an exchange, and mining machine manufacturers also come to open "casinos"?
Editor's Note: This article comes fromEditor's Note: This article comes fromHong Kong stock company (ID: ganggu668)
, Author: Big Q, published with authorization.
In recent years, the market has seen a growing interest in blockchain. As of December 31, 2019, there were 5,035 cryptocurrencies in circulation with a total market capitalization of approximately $193.4 billion, an increase of 48.5% from approximately $130.2 billion as of December 31, 2018. Bitcoin, the largest cryptocurrency, accounted for approximately 68.2% of all cryptocurrency market capitalization, or approximately $131.9 billion, as of Dec. 31, 2019.
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Company Profile
Company Profile
Ebang International's total revenue in 2018 and 2019 was US$319 million and US$109 million, respectively, and its net losses were US$11.81 million and US$41.07 million, respectively.
The main business of Ebang International is the production and sales of Bitcoin mining machines, and the design capability of ASIC chips for mining machines is its core competitiveness.
Ebang is one of the earliest mining machine manufacturers in the industry to use 10nm ASIC chips for commercial use. At present, Ebang will soon launch 8nm and 7nm chip mining machines, and 5nm ASIC chips are also under development.
Of course, mining is not limited to Bitcoin now, and Ebang International also intends to apply its self-developed technology to non-Bitcoin fields, such as Litecoin and Monero.
In addition to manufacturing and selling mining machines, Ebang also provides mining machine hosting services. In 2019, Ebang's mining machine hosting service revenue was US$15.728 million, a year-on-year increase of 104.5%, accounting for 14.4% of total revenue, compared with 2.4% in 2018.
In addition, Yibang International also mentioned in the prospectus the establishment of a digital currency exchange. From mining machine manufacturing, to mining machine hosting, to digital currency exchange, Ebang International closely revolves around the role of "water seller" to expand upstream and downstream businesses. At the same time, the establishment of digital currency exchanges can also cope with industry and policy fluctuations, and the income generated by the future exchange business can also smooth performance fluctuations.
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industry status
The industrial chain of the digital currency "mining circle" is mainly divided into three parts, upstream mining machine manufacturing, midstream mining and downstream digital currency trading. Ebang International is in the upstream of mining machine manufacturing. After the establishment of an exchange in the future, Ebang International will also enter the downstream business.
Conversely, when the price of Bitcoin falls, the attractiveness of mining decreases, the number of "miners" participating in mining decreases, and the demand for mining machines also decreases. Therefore, the price of mining machines is strongly related to the price fluctuations of Bitcoin.
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According to Frost & Sullivan’s report, global sales of bitcoin mining machines have grown at a compound annual growth rate of 61.3% from 2015 to 2019, surging from about $200 million in 2015 to about $1.4 billion in 2019 USD, which is expected to further grow at a CAGR of 24.8% in the next five years to USD 4.3 billion in 2024.
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review
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In 2016, the production of Bitcoin was halved, and in 2017, Bitcoin went out of a magnificent market. The streets and alleys are talking about Bitcoin, and blockchain technology is also being tried in different fields. As the bottom layer of digital currency, mining has naturally entered a period of vigorous development. For a while, the demand for mining machines surged, and Huaqiangbei in Shenzhen also changed from a computer city to a mining machine city, which gave birth to four major mining machine manufacturers, and Ebang International is one of the giants.
Although Bitcoin fell back later, the demand for mining machines was hindered. However, Ebang International will continue to deepen its business related to the "mining circle", increase its mining machine hosting business, and will enter the digital currency exchange business in the future. These business expansions can expand the company's circle of competence while smoothing out the impact of cyclical fluctuations in digital currency price fluctuations.
