TokenInsight, the token data rating and research firm, has released a report today highlighting bitcoin mining’s strong recovery in the second quarter of this year. Bitcoin’s hash rate reached record levels, prices of miners doubled, and the industry is backlogged by months of orders, says the report. But there are clouds on the horizon for the mining industry, with concerns around the ever-increasing difficulty and the shift by large public blockchains away from the energy-intensive Proof of Work protocol favored by Bitcoin. 

TokenInsight’s analysis suggests the Bitcoin market will keep on growing—estimating that the price of Bitcoin in 2020 will grow to somewhere between $17,077.32 and $23,276.56. Since Bitcoin’s price is strongly correlated with mining difficulty, producers of custom-built bitcoin mining machines are racing to produce the more powerful and energy-efficient miners to capture greater profits. 

As a result of this mining arms race, consumer computer hardware is being left behind. Miners need custom built, heavy-duty bitcoin ASIC miners to solve the increasingly complex, computationally intensive puzzles at the heart of the network in order to turn a profit. In fact, TokenInsight estimates that mining difficulty will increase by around 38 percent by the end of the year, and Bitcoin computing power will increase by as much as 48 percent. 


TokenInsight ranked the hardware favored by mining operations and found Innosilicon’s T3-43T Bitcoin miner brought the best returns for the lowest cost in this year’s second quarter. The report said it was energy-efficient, packed serious computing power, and, at around $1500 a pop, it was far cheaper than others in its class, giving users annual returns on investment of 242 percent. But things are changing, fast. 

If the average increase in computing power across the whole network is more than 5% this quarter, most of last quarter’s miners would never turn a profit. Only miners with high hashrates—TokenInsight point to the Whatminer M21S (around $1800), Whatminer M20S (around $2600), and the Innosilicon T3 43T (around $1,500)—would stay profitable.

In fact, the latest generation of miners are leaps ahead of the last generation. This week, Antmainer announced the S17e, which is 8 percent more energy-efficient and almost 40 percent more powerful than Q2’s best in class, the Innosilicon’s T3-43T. And new, innovative solutions like Northern Bitcoin’s a Frankfurt-based technology company focused on Bitcoin announced it had successfully completed testing for its new air-cooled mobile mining container, a 20-feet long monstrosity that contains 144 ASIC miners.

But as the price of Bitcoin skyrocketed, supply for ASIC miners has struggled to keep up with demand. TokenInsight’s report shows that the price of most miners has doubled since last quarter, and even second-hand mining machines that were once tossed in the trash are now popular again, and increasingly expensive, according to Chinese media reports. 

According to TokenInsight’s report, popular mining hardware such as Antminer S17, Ebang Ebit E11+, and Innosilicon’s T3 43T were out of stock during the second quarter, and things haven’t gotten much better. Customers are still waiting on deliveries for orders placed months ago, which manufacturers struggling to keep up with demand. 


But the delayed deliveries of the old models could be too little, too late: there simply aren’t enough new miners coming online to meet rising demand, according to TokenInsight.  This has led to a boom in cloud computing services, says the report. 

According to TokenInsight, BitDeer and VeryHash were the two best cloud computing mining platforms in the second quarter of 2019. But even these companies had sold out of miners: in Q2 2019, both Bitdeer and VeryHash’s major products were sold out, and only Antminer S17, S15, and S9 cloud mining products were left. And those miners, according to TokenInsight’s report, will soon be unprofitable if the mining difficulty keeps increasing 

Existential Threats

The mining industry is grappling with other problems, too. The rise of Proof of Stake networks, like Algorand, Hedera Hashgraph and Telegram’s upcoming TON network all threaten ASIC miner’s future prosperity. In Proof of Stake networks, “traditional mining pools do not have many advantages,” Zhuang Zhong, CEO of the largest mining pool,, told Decrypt. Bitcoin relies on the Proof of Work consensus mining algorithm, which means that bitcoin miners have to stake computing power (which is why miners have to be so powerful). But Proof of Stake does away with that: instead of staking computing power, users mine tokens by staking currencies. This removes the advantage given to ASIC miners.

And Ethereum, one of the largest Proof of Work blockchains, is considering moving to a new consensus mechanism designed to blunt the dominance of dedicated ASIC miners. The new algorithm, called Progressive Proof of Work (more commonly known as ProgPoW) has been delayed while the code was being audited. The audit, which was completed this week, found that ProgPoW was highly effective. The audit was one of the last remaining roadblocks for ProgPoW, and it’s likely it’ll be implemented in the first quarter of 2020. That’ll take one of the most profitable blockchains off the market for mining pools.

But an executive of one of the mining pools isn’t scared. Li Qingfei, CMO of F2Pool, a mining pool that holds 12.3 percent of the mining pool market share, told Decrypt: “PoW [Proof of Work] mining is our unshakable business direction, we will continue to contribute to this trillion [RMB ( $141 billion)] PoW mining field, and hope to the PoW cryptocurrency represented by BTC can perform better in the future.” 

And of course, there are the environmental concerns. Daniel Qin, who authored the TokenInsight report, told Decrypt he’s concerned by the rising CO2 emissions generated by bitcoin mining. He isn’t the only one: Alex de Vries from has been tracking the issue for years. De Vries estimated that bitcoin mining alone has a carbon footprint comparable to the whole of Denmark. 

But, as Qin pointed out to Decrypt, bitcoin mining power is highly centralized around a small number of mining pools. In fact, AntPool,, F2Poolholds, Poolin, and Slushpool hold around 65 percent of the market share. So how did they justify the immense environmental damage caused by specialized bitcoin miners? Even if a miner is 'more energy-efficient', isn't it still participating in a wasteful consensus mechanism?

Don’t hold your breath: Zhuang Zhong, CEO of, which controls 19.9 percent of the mining market share, told Decrypt that “Crypto mining is an effective use of current power resources.”


“Crypto mining is a kind of security protection for the blockchain. The power consumed is practical and useful. It is definitely not a waste,” added Andy Wang, the founder of Renren Mines. 

A fair retort, but according to Digiconomist, over 6.7 million US households could be powered each year through the estimated annual energy consumption of bitcoin mining. Food for thought. 

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