[HKBCS 2018]MaiCapital: Mining Industry Will Rely on Chips to Improve Efficiency in the Future

The mining industry in the blockchain suffered setbacks due to market conditions. The Q3 revenue of chip maker NVIDIA was also affected. The market questioned whether mining activities are sustainable. Michael Wong, managing partner of MaiCapital, believes that there is a lot of room for development and the key aspect is whether the chip can process more quickly and consume less power.

As most cryptocurrencies becoming more sophisticated in design over time, it is more difficult to mine. With a weak market environment, the profit margin of mining is gradually narrowed. However, Wong believes that even if the market slowdown reduces the interest of many stakeholders in mining, the group will be motivated to think of ways to improve efficiency. ‘Unless the entire cryptocurrency space goes to zero, there are still money to be made,’ Wong Said.

The key to sustainable development of the mining industry is the performance improvement at different levels, such as chip’s speed, encryption formula, and power consumption, so that the miners can make money more efficiently. The market requires more efficient chips or semiconductors, which in turn will create more room for other chip manufacturers to enter.

Wong worked in the semiconductor company Qualcomm for nearly 10 years and is familiar with the development of related industries. He believes that semiconductors and chips not only serves miners in the blockchain industry but it has more potential. He said that at the chip level, integrating different blockchain functions can play a real role, such as transactions between machines within the Internet of Things. Of course, it is also critical to apply blockchain transactions to the chips.

As for NVIDIA, it is regarded as an alternative blockchain-related stock, but Wong believes that NVIDIA only entered the mining industry by accident. He stated, ‘The cost structure of NVIDIA is unreasonable.’ NVIDIA’s chip is not tailor-made for mining. It is not possible to compete with other manufacturers that focus on mining unless they specially design chips for this purpose in the future.