Bitcoin Mining Hardware War Is Heating Up Ahead of the Halving

Shenzhen-based MicroBT is rolling out three top-of-the-line bitcoin miners amid heated competition with Bitmain ahead of the network's halving event in less than 30 days.

Chen Jianbing, COO of MicroBT, announced in an online event on Friday that the three new models – the WhatsMiner M30S+, M30S++ and M31S+ – are available via both warehouse inventory and pre-orders that can be delivered in up to 30 days.

The move underscores MicroBT's neck-and-neck competition in the multi-billion-dollar mining hardware market with major rival Bitmain, which is scheduled to deliver the first batch of its latest AntMiner S19 and S19 Pro miners in May.

At the event, Chen reemphasized MicroBT's rapid growth in 2019, having achieved sales of 600,000 units of its WhatsMiner M20 series, which, as CoinDesk reported in February, has chipped away at Bitmain's longstanding market dominance.

The COO said 2019 sales volume had also doubled compared with 2018, boosting its sold computing power to 35 million terahashes per second (TH/s). That accounted for 35 percent of the Bitcoin network's total hash rate as of the end of December.

The new models add to MicroBT's existing M30 product line, which includes the previously launched WhatsMiner M30S and M31S.

Efficiency war

With the latest equipment from both major manufacturers soon to start shipping, the bitcoin mining hardware market is now entering what Chen called the "3X era," referring to a mining efficiency that's below 40 watts per terahash (W/T).

For context, W/T measures how much electricity a mining machine consumes for each terahash of computing power. Since bitcoin mining is an energy-intensive computing process, a miner with a lower W/T ratio would be able to bring home a higher gross margin.

This metric has become considerably more important given the upcoming bitcoin halving, which will reduce the amount of bitcoin earned by the mining industry in a day from around 1,800 to 900 units.

Read more: Bitcoin Halving, Explained

According to the firm's specifications, the M30S+ is able to compute at a 100 TH/s with 34 W/T efficiency, while the M30S++ can compute as much as 112 TH/s at 31 W/T. The previously launched M30S is claimed to deliver an efficiency of 38 W/T.

Meanwhile, the M31S+ and the earlier M31S both deliver an efficiency of 42 W/T. However, Chen said the new model has the option to switch to a lower voltage mode in order to improve the efficiency to below 40 W/T.

To put this into perspective, by Bitmain's specification, AntMiner S19 and S19 Pro machines are said to be able to compute at 95 TH/s and 110 TH/s with an efficiency of 34 W/T and 30 W/T, respectively.

Tough times

But arguably miner manufacturers are all facing a tough time selling equipment under current market conditions, with mining operations taking a step back to wait and see how bitcoin's price will play out after halving.

Major manufacturers have had to mark down the prices of their mining equipment following bitcoin's price crash on March 12, the largest sell-off since 2013.

Vincent Zhang, MicroBT's head of sales, said during the launch event the WhatsMiner M30S is now priced at $1,962 – down from around $2,500 when it was initially released. For the new models announced today, the M30S+ and M30S++ are priced at $2,740 and $3,899 per unit, respectively.

Following the recent price cuts, manufacturers such as Bitmain have also had to partially refund customers who placed pre-orders at the higher price, a policy the firm has had in place for the past several years.

Zhang said MicroBT is now also enforcing such a policy in its bid to keep customers happy. Users who have placed pre-orders at a higher price than the retail value at the time of delivery will be compensated for the difference, like with Bitmain, in cash coupons. These can only be redeemed at up to 10 percent of the value of additional goods purchased by MicroBT.

Although MicroBT gained a large amount of market share in 2019, it had issues delivering devices on the timeline it had promised to customers, suffering up to several months of delays.

Read more: Another Bitcoin Mining Firm Warns COVID-19 Pandemic May Harm Its Business

Zhang said the firm will now compensate customers in cash coupons worth 0.3 percent of the value of a pre-ordered machine for each day a delivery is delayed beyond the promised date.

Also notably, MicroBT will extend its warranty policy for the M30 series to one year post-delivery – longer than the industry's average six-month warranty period.