Canaan establishes Bitcoin mining business in Kazakhstan »CryptoNinjas
Jianan Zhizhi is a supercomputing solution provider and the manufacturer of one of the world’s first ASIC-driven Bitcoin mining machines in 2013. The company is implementing the 2021 strategic plan announced earlier this year.
The company is now promoting its own crypto mining business in Kazakhstan, and its latest Avalon Miner equipment is already in operation.
As one of the largest manufacturers of encryption mining machines, it is a logical next step to surpass Canaan’s existing business model, as it enables them to optimize revenue; as well as strengthen their inventory management and supply chain capabilities.
“We believe that our self-operated Bitcoin mining business will help us improve financial performance; and expand our business scope. As we integrate more industry resources into our operations, we believe this business segment will enable us Revitalize the mining machine inventory, protect us from Bitcoin fluctuations, and ensure that we have sufficient inventory when the market improves.”
-Zhang Nangeng, Chairman and CEO of Canaan
The production and sales of mining machines are usually closely related to the price of their underlying cryptocurrency. For example, excessive volatility in the price of Bitcoin may cause excessive volatility in the income stream of mining hardware suppliers, which may have an adverse effect.
Coupled with the long-term nature of manufacturing and production processes, delivery times tend to be longer, and it is not uncommon for a time lag between supplier response and demand changes.
This usually means two extremes: idle resources or over-stressed capacity. The diversification of the mining industry not only reduces such operational risks, but also significantly improves Canaan’s flexibility and capabilities in rapidly changing market conditions.
During the quiet period, the mining business will benefit from making full use of the availability of its inventory of mining machines and actively deploying it in its mining operations at low electricity prices, thereby maximizing the computing power at that time.
On the other hand, when market activity increases, the mining business will also benefit from the processing power of using old machines.
The end result will be a significant improvement in inventory planning and supply chain optimization throughout the year, and will not be affected by Bitcoin prices.
Finally, the risk of Bitcoin mining allows Canaan to directly accumulate Bitcoin, so it may bring Canaan a considerable upside.
Canaan Zhizhi also recently announced the opening of its first overseas service center in Kazakhstan.