Canaan sets up bitcoin mining business in Kazakhstan

Canaan, a provider of supercomputing solutions and producer of one of the world’s first ASIC-powered bitcoin mining machine’s in 2013 is delivering on their 2021 strategic plans announced earlier this year.

The company is now driving its own crypto-mining business in Kazakhstan with its latest Avalon Miner units already in operation.

As one of the largest crypto-mining machine manufacturers, the move beyond Canaan’s existing business model is the logical next step as it enables them to optimize their revenues; as well as strengthen their inventory management and supply chain capabilities.

“We believe that our self-operated bitcoin mining business will help us improve our financial performance; as well as expand our business scope. As we integrate more industry resources into our operations, we believe this business segment will enable us to revitalize our mining machine inventory, shield us from bitcoin volatility, and ensure our inventory sufficiency during market upturns.”
– Nangeng Zhang, Chairman and CEO of Canaan

Canaan now operates bitcoin mining business in Kazakhstan

Diversification into Mining

The production and sales of mining machines have typically been closely related to the prices of their underlying cryptocurrency. Undue fluctuations in the price of bitcoin, for instance, can have the adverse impact of inducing undue volatility in the revenue streams of mining hardware providers.

Coupled with the longer-term nature of manufacturing and production processes, where lead times tend to be more stretched out, it is not uncommon for there to be a time lag between supply-side responses and changes in demand.

This often means two extremes: idling resources or overly strained capacity. The diversification into mining then, not only mitigates such operational risks but also significantly improves Canaan’s nimbleness and ability to navigate the rapidly evolving market conditions.

During a period of lull, the mining business will benefit from taking full advantage of the availability of their in-stock mining machines to be actively deployed in their mining operations at low electricity rates, thus maximizing their computing power at that time.

On the flip side, when market activity is elevated, the mining business will also benefit from putting the processing capacity of older machines in use.

The net result will be a considerable improvement in inventory planning and supply chain optimization throughout the year, and unaffected by the price of bitcoin.

Finally, the venture into bitcoin mining allows Canaan to directly accumulate bitcoin and thus has the potential for considerable upside for Canaan.

Canaan also recently announced the opening of its first overseas service center in Kazakhstan.

Source:
Canaan

Via: https://www.cryptoninjas.net

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