Bitcoin mining rig manufacturer Canaan, one of the largest mining hardware providers worldwide, has announced that it is making its first foray into mining bitcoin itself by setting up mining operations in Kazakhstan.
"We believe that our self-operated Bitcoin mining business will help us improve our financial performance as well as expand our business scope and customer base," Canaan chairman and CEO Nangeng Zhang said in the announcement. "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."
According to the announcement, Canaan's new business diversification strategy delivers on the company's strategic plans for 2021, announced earlier this year. The Chinese ASIC maker will now venture into bitcoin mining with the hopes to capture more returns if demand for its mining rigs declines.
Earlier this month, Canaan had also expanded its business by establishing its first overseas after-sales service center. The center, which was also set up in Kazakhstan, provides the company's local customers with services such as machine testing, warranty, maintenance and technical consultation and support.
The bitcoin mining rig maker is based in China and produced the world's first ASIC machine in 2013, remaining in business ever since. However, Canaan is now being compelled to expand its business models and penetrate overseas markets, likely due to its home country's recent negative stance toward the industry, after seeing its own pleas against this crackdown fall on deaf ears.
After China's state council called for a renewed crackdown on bitcoin mining and trading in the country, many companies in the industry have been facing challenges. For instance, BIT Mining — the bitcoin mining company behind the BTC.com pool, which accounts for nearly 10% of the Bitcoin network's total hash rate — recently saw some of its operations go offline. As a result, the company has started moving its mining machines overseas, also to Kazakhstan.
Similarly, bitcoin trading and related activities haven't been spared in the China-wide crackdown. Primary internet services in the country, such as Google-like Baidu and Twitter-like Weibo, for instance, have lately been censoring keywords related to bitcoin exchanges. And, this week, the People's Bank of China (PBOC) met with leading financial institutions in the country, including payment services giant Alipay, to demand that citizens be stopped from transacting with bitcoin exchanges and over-the-counter dealers altogether.