It took Canaan just 2 years to increase the market share in mining from 6% to 22%

Endy Callahan

The main indicator on the market exchange believe volatilnosti. For many years, no corporation has managed to boast a high asset, but in 2019, Canaan Creative was able to win 22% of the market, and some influential experts note that their shares may soon become the most volative asset in the history of the industry.

About the company

The company was founded in 2013. For almost 7 years of existence, Canaan has been able to go from a tiny group of enthusiasts to a world leader in the development and production of Blockhain technology servers. In addition, the company has a strong position in the market of ASIC-type microprocessors.

At the moment, the company's market portfolio is represented in almost all countries of the world and offers the user almost all types of processors. From the basic version of SHA 256 using the FPGA architecture (which is considered the first of its kind), to the modern and powerful ASIC blockchain Avalon.

Despite its strong position, the holding company continues to improve and introduce new technological solutions to the market for individual applications.

The path to the top

Over the past two years, mining has become widely popular among those who want to earn money at home and even large companies. Accordingly, the demand for equipment that is engaged in farming has increased.

In 2017, Canaan entered with only a 6% market share, but with many ideas and innovations to develop. The task of the holding was extremely difficult – almost all the time of the rise and development of mining, Bitmain was considered the undisputed leader of the industry, which owned a share of 65%, and according to other information, 85% at all.

World experts note that there are two points that helped the company to take off:

  1. Competent investment and involvement of third-party resources.
  2. Erroneous decisions of competitors.

It is difficult to say whether the company's success would have been successful if at least one of the above factors had not happened.

Investment

General Director of the Chinese holding company N. G. Zhang created the company while writing a doctoral dissertation at the University. As Zhang himself admits, his current success is an echo of his past. All 6 years of work, he tried to surround himself with a lot of highly qualified specialists who are burning with ideas. The main selection criterion for the team was “hunger". The engineers who wanted to create it end up working for him.

After collecting the team and generating new ideas, it was necessary to plan the budget to understand whether they needed funds from the outside.

Back in 2017, the positions were far from ideal, but they managed to earn almost $ 200 million in net profit on the world stage. The main market leader Bitmain at that time held an IPO in new York to attract even more resources. In the same year, the Chinese holding company also planned to conduct this operation, but the internal instability of the environment did not allow them to do this, and the project went into the back burner.

The following year, Canaan decided to re-launch the IPO, but in Hong Kong. 2018 was marked by the instability of mining in general and a sharp drop in the value of bitcoin in the eyes of the public. Even the moment came when the initial public offering of the company received the status of inactive. Many experts believe that the reason for this was the taking of mining companies and cryptocurrencies under the control of the state.

You can get acquainted with the current trends in the regulation of cryptocurrencies in the article: Taxation of cryptocurrencies in the United States.

Initially, the company planned to raise a billion dollars, but then lowered the bar to 400 million. The main competitor confidently held the leading position, and Canaan never managed to turn the scales in its own direction. The final plan for an IPO in Hong Kong failed in may 2018.

Despite the huge number of failed attempts and the interference of external factors N. G. Zhang did not plan to stop halfway to his goal. Already in 2019, it still managed to hold an IPO in new York. In November, Canaan Creative placed almost 10 million American-style Depositary receipts at a starting price of $ 9 and managed to attract almost 90 million investments from outside.

The Chinese holding successfully guessed the moment, because a month later the rate fell to $ 5.71.

The failure of competitors

In 2018, a series of failures knocked down the main competitor – the world's largest manufacturer of equipment for mining operations Bitmain. The problems came from within the team – there was a corporate conflict among the founders of Bitmain.

One of the company's founders even had to return to the role of CEO. At the same time, Jihan Wu, whose fortune was estimated at several billion dollars, made an assessment of the equipment. In addition, another competitor, the Ebang International holding company, was briskly stepping on its heels.

The valuation of the property took some time, which resulted in significant losses for Bitmain. Despite the strong position in the market, there were rumors of huge quarterly losses-almost 740 million.

Significant losses could not shift the giant to second place, but allowed two other corporations to come close.

As a result

The increase in market share by almost 4 times did not make N. G. Zhang change his mindsed. He and his team of professionals continued to innovate in the mining industry. According to some sources, the number of ASIC miners sold has reached almost 300 thousand. This is a high indicator when the market is unstable and the bitcoin exchange rate is floating.

In addition, a new mining system was introduced to the market-the concern introduced a TV-miner under the motto, "Bitcoin for everyone". The device can hash approximately 2.8 trillion hashes per second. At the moment, it is inferior to ASIC, which hash rate is superior by 3.5 times