Mining company Canaan Creative has become a pioneer in the IPO

Colin Baseman

Canaan Creative is the first manufacturer of mining equipment that successfully filed  for the IPO on the stock exchange. The company managed to get ahead of its competitors, including Bitmain.

Canaan from China was able to attract $ 90 million during the IPO in the United States. It became the first among the manufacturers of mining systems, whose shares are traded on the stock exchange.

The organization placed 10 million ADRs at a cost of $ 9. This fully meets the minimum forecasts. According to the application to the US SEC, the sale price of the securities was in the range of 9-11 dollars.

Initially, the firm wanted an investment of $ 400 million. After the loss of the underwriter, Credit Suisse, it has lowered expectations to $ 100 million.

Canaan IPO details

The company reported data on its financial condition. Last year, the net profit of the manufacturer of miners was at the level of 8.3 million dollars, with revenue of $ 394 million. The collapse of the value of bitcoin resulted in the loss of 16.7 million dollars.

According to institutional investors, the capitalization of Canaan Creative is ranging from two to three billion dollars. This is the company's third attempt at an IPO.

In total, the organization will issue 126 million shares. In recent weeks, Canaan has completed all the procedures that are related to the IPO. There are 3 mining giants in China: Canaan, Bitmain and Ebang. They all wanted permission to IPO in Hong Kong. The other two companies never achieved their goal.

The Hong Kong stock exchange has established a requirement: every six months, the company is obliged to update the prospectus. Because AvalonMiner did not do so last month, its application was invalid. Bitmain and Ebang do not plan to conduct an initial public offering on the Hong Kong stock exchange.

Canaan Creative announced the development of ASIC for mining Ethereum cryptocurrency.

The developer said that the efficiency of the new product is five times higher than the parameters of the GPU miners.

Canaan Creative announced plans to establish a mass production of ASIC-miner for finding Ethereum blocks. It will be several times more efficient than equipment built on the basis of video cards. The new miner is not a development of the company, but it is sold in China.

A representative of Canaan said: "Our engineers did not participate in the development of the miner. But you can buy it from the company. The equipment is not an official Canaan product on a global scale."

Last year, Bitmain announced plans to release Antminer F3, which runs on the Ethash algorithm. It is used to confirm transactions in the Ethereum network. At the time of the start of sales, ASIC was twice as efficient as hardware built on video cards. According to Vitalik Buterin, who heads the Ethereum Foundation, the new miner does not threaten its cryptocurrency, so there is no reason to change the mining algorithm.

Buterin noted: "In Ethereum, nothing is under the control of miners. If Bitmain concentrates a significant share of computing power in Its hands, and the company wants to use this to cause harm, all we have to do is accelerating the development of Casper."

To date, the creators of the cryptocurrency are working on the use of the ProgPOW algorithm. It is expected to equalize ASICs and video cards before starting to use the POS consensus confirmation algorithm. According to Ethereum representatives, ProgPOW will be implemented in 2020.

ASIC miners ' prospects for Ethereum mining

ASIC miners are more preferable than graphics card-based hardware. With their help it is possible to equip a farm easier and increase return on expenses and profitability. In addition, such equipment is more energy efficient, that is, it reduces the cost of electricity. ASIC miners are relatively easy to maintain. Therefore, many individuals and companies whose business is associated with the extraction of cryptocurrency, pay attention to them.

Physically, ASIC is a compact box with a power supply and a set of boards with chips. An important element of the equipment is the cooling system. The system does not cause problems in setting up, so even beginners in mining will be able to master it without problems. The user manual and special software make it easy to set up the equipment.

Is it advisable to enter Ethereum mining with ASIC

Before you buy equipment, it is important to make calculations of its payback. It is affected by several parameters:

  • The complexity of the production. This value is very important. It determines what proportion of all mined coins the average user will receive. The lower the difficulty, the higher the reward for miner. With the depreciation of the crypto currency, users disconnect their equipment from the network or switch it to the production of other coins. As a result, the complexity of production decreases, and earnings grow.
  • Market value. The price of Ethereum is formed by the market based on supply and demand. You can focus on the current situation or get acquainted with the forecasts of specialists.
  • Cost of electricity. In each country, energy resources are sold at different prices. It will directly determine the costs. If the electricity in your region is expensive, it will entail a significant increase in costs. Cheap electricity is a distinct advantage when opening a farm.
  • The cost of the miner. As a rule, an ASIC miner is much cheaper than a farm for 6 graphics cards of similar capacity. This reduces the return on investment period.

We recommend reading the article "Mining farm in 2020". It will help to get acquainted with the algorithm for calculating the feasibility of opening a new business for the extraction of cryptocurrencies.

Canaan Creative is one step away from an IPO. Do not miss the opportunity to purchase securities of the company. Ethereum's assurances that the company will not change the algorithm to stop ASICS from performing calculations on the network are encouraging. Before investing money, calculate the return on investment and the feasibility of such investments.