Is Demand For Bitcoin Mining in Decline? Chip Maker Slashes Target

Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest dedicated independent chipmaker, has predicted a drop in demand from the cryptocurrency mining community in the fourth quarter this year. The growth target of 7 to 9 percent was slashed to 6.5 percent partly due to the demand dynamics of bitcoin miners.Crypto Mining Demand For TSMC Chips to Weaken Further In Q4 2018, Says CEOC. C. Wei, Chief Executive Officer and Vice Chairman of TSMC told investors at the company’s third quarter 2018 earnings conference that business growth would be offset by “continued weakness in cryptocurrency mining demand”.“Moving into fourth quarter, despite the current market uncertainties, our business will benefit from the continuous steep ramp of
7-nanometer for several high-end smartphones as well as the demand for 16/12-nanometer for the launches of new-generation GPU and
AI. However, this growth will be partially offset by continued weakness in cryptocurrency mining demand and inventory management by
our customers.”
The company forecasts growth between 5 and 7 percent for the overall semiconductor market excluding memory, while foundry is expected to grow between 6% and 7%. Weakening demand from cryptocurrency miners has forced the firm to adjust the growth estimate to 6.5 percent in U.S. dollar terms, according to the chief executive.“However, our business is also negatively impacted by further weakening of cryptocurrency mining demand. As a result, we estimate our 2018 growth rate will be about 6.5% in U.S. dollar term, which is close to the foundry industry’s growth but slightly below our 7% to 9% guidance given in the last conference.”The downshift in mining profits is the main responsible for the company’s revision of its full-year sales target, citing uncertainty in the cryptocurrency market as its reason. In April, the Taiwan Semiconductor Manufacturing Company lowered its 2018 revenue guidance to 10% growth from 10-15%, estimating that about 10% of the Asian chipmaker’s revenue depends on cryptocurrency mining demand.Moreover, the entrance of Samsung in the global cryptocurrency mining sector could be providing TSMC their first real competitor in the sector, which in turn, may eventually push the company to lower its sales targets in years to come. Samsung has started the production phase of bitcoin and cryptocurrency mining equipment and ASIC mining chips earlier this year. The company intended to manufacture GPU miners for miners targeting small cryptocurrencies in the upcoming months.President Trump’s trade tariffs, on the other hand, may hurt future trade volumes of Chinese companies producing cryptocurrency mining hardware. This may eventually benefit TSMC as competitors from the People’s Republic of China will have a hard time in the race for the U.S. market.

$50 Million Bitcoin Mining Farm Opens in Armenia

$50 Million Bitcoin Mining Farm Opens in Armenia

Mining

A new cryptocurrency mining facility opened in Armenia on Oct. 18. The $50 million farm will extract bitcoin and ethereum using 3,000 machines, according to local media reports. Around 120,000 more miners are to be added in the months to come.

Also read: Marks Jewelers Now Accepts Bitcoin Cash For Payments

Multi Group and Omnia Establish Landmark Armenian Mining Facility

The mining project, spearheaded by Armenian real estate investment company Multi Group Concern and Malta-registered Omnia Tech International Company, was officially launched in the Armenian capital of Yerevan on Thursday. The country’s Prime Minister Nikol Pashinyan, businessmen and entrepreneurs from China, South Korea and the United Arab Emirates attended the ceremony, Arka News Agency reported.

$50 Million Bitcoin Mining Farm Opened in ArmeniaGagik Tsarukyan, an Armenian businessman and politician who is also founder and head of Multi Group, said the company spent $50 million creating the facility, including the installation of industrial level cooling systems. The farm’s first floor is designed for an information technology business center that runs around the clock, he explained.

According to an earlier statement by Multi Group chief executive Sedrak Arustamyan, the farm will be operated by Omnia Tech, a mining entity that offers lifetime contracts and daily payouts. Omnia Tech has said to be in partnership with Genesis Mining, a leading cryptocurrency hashpower supplier.

“We will also help Omnia Tech with the establishment of the Financial Technology Park and the data exchange center in Armenia,” Arustamyan said in April. Robert Velghe, Omnia Tech founder, indicated at the time that the two companies were planning to invest more than $2 billion in mining projects in Armenia. “We intend to create here a blockchain-based center for the development of new information projects, which will turn Armenia into a high-tech platform,” he said.

 Global Cryptocurrency Mining Operations Rise

$50 Million Bitcoin Mining Farm Opened in ArmeniaArmenia is aiming to create its own Silicon Valley by establishing a free economic zone that will host a state-of-the-art technology center, officials have said. The new mining facility, the country’s first, comes at a time when a number of countries are implementing and expanding blockchain technologies. Georgia, Armenia’s neighbor, set up its first bitcoin mining farm two years ago.

In August, Russian company Kriptoyunivers announced it had transformed a former fertilizer laboratory into a cryptocurrency mining operation. The center, which supports the mining of bitcoin and litecoin, was built over 4,000 square meters of land in the town of Kirshi near St. Petersburg, with an investment of 500 million rubles ($7.4 million). Although Moscow has cracked the whip on illegal attempts at cryptocurrency mining, Russia is still the third largest cryptocurrency producer in the world after China and the United States.

What do you think about the new mining facility in Armenia? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Russian Draft Bill Lacks Core Crypto Terms After Recent Edits

Russian deputies have removed the definition of crypto mining from a draft bill on digital currency regulation ahead of its next reading in the State Duma, major local news agency Interfax reports Oct. 19. Consequently, the new law will not clarify tax issues for miners.

The chairman of the Duma Committee on Financial Markets Anatoly Aksakov briefly explained the reason behind the deputies’ decision to eliminate a core crypto term from the bill:

“Earlier we had some thoughts on Bitcoins, on their integration into our economic system. But as we decided we don’t need them, these ambiguous Bitcoins, therefore we don’t need mining as well.”

If the law were to define crypto mining, it consequently would also need to define cryptocurrencies, Aksakov told Interfax. He further added that it would be “senseless” to include mining in the regulation proposed by the government. He said mining should be brought under tax watchdog jurisdiction if needed.

It is not immediately clear whether definitions for tokens and Initial Coin Offerings (ICO), and rules for crypto exchanges — which were included in the initial draft — remain in the current version. The present draft law will proceed to the second of three readings in the Duma.

The bill “On Digital Financial Assets” was first introduced in January by the Russian Ministry of Finance. In March, a group of deputies headed by Aksakov proposed a modified version that established know your customer (KYC) regulations for customer identity verification on crypto exchanges, echoing current requirements in the U.S. A draft of the bill was approved by the State Duma in first of three hearings in May.

However, before the second hearing scheduled for the Duma’s autumn session, a definition of “cryptocurrency” was removed from bill. Mining then was defined as the “release of tokens to attract investment in capital.”

In September, a lobby group from the Russian Union of Industrialists and Entrepreneurs (RSPP) started working on an alternative crypto regulation bill. According to RSPP vice-president Elina Sidorenko, the new bill will divide digital assets in three groups and help eliminate contradictions in the state bill that she calls “unfinished and fragmented.”

Aksakov spoke to Interfax at Finnopolis 2018 — a fintech event that was held in the Russian city of Sochi this week. During the conference, state officials discussed crypto and its role in the country’s economy.

The head of the Russian central bank, Elvira Nabiullina, compared interest in crypto to a “fever” that was “fortunately” over. Herman Gref, CEO of Russia’s largest bank, Sberbank, predicted that governments will not abandon centralized control of monetary policy and currencies to allow cryptocurrencies to flourish within the next ten years.