Foreword
With the rapid growth in demand for artificial intelligence ( AI ) and high-performance computing (HPC) power, an increasing number of publicly listed Bitcoin mining companies are exploring the transformation of their data centers, power systems, and infrastructure towards AI computing. This trend has led the market to repeatedly raise the question: Is AI changing or even reshaping the future of the Bitcoin mining industry?
In an interview broadcast on the Blockspace Podcast on March 10th, Liang Wang, Vice President of Canaan Technology, a leading global manufacturer of Bitcoin mining equipment, shared his observations on this issue. He believes that Bitcoin as an asset is still very likely to experience a new bull market cycle , but this does not necessarily mean that the Bitcoin mining industry itself will experience a boom similar to the past. The more important reason is not AI or HPC, but that the economics of mining itself are gradually deteriorating over time.
The following is a compilation by the Bitpush team based on interviews, with slight omissions while striving to restore the original meaning for easier reading.
"Bitcoin will have another bull market, but whether the mining industry will have one, I really don't know."
host:
Many publicly listed mining companies are now shifting their computing resources towards AI. What are your thoughts on this change? Will AI change or even replace the Bitcoin mining industry?
Liang Wang:
I've actually been thinking about this issue a lot. First of all, I think we must embrace AI and AIHPC because it is indeed a huge change. It will change our lifestyles and many occupational structures. Many jobs will be replaced by AI, which I think is quite obvious.
However, if the question is whether AI will replace the entire Bitcoin mining industry, I personally don't think so. Bitcoin, as an asset class, still has value, and it has its own cycles. So if you ask me whether Bitcoin will have another bull market in the future, I think the answer is yes.
But if I were to ask another question: Will the Bitcoin mining industry ever see a bull market again? Frankly, I don't know the answer.
Because what's currently taking the industry's attention away isn't just AIHPC. The more important reason is that the economics of mining itself are gradually deteriorating over time.
"Entering the mining industry now is much more difficult than it was five years ago."
host:
Why do you think the economics of mining are deteriorating?
Liang Wang:
The industry today is completely different from what it was five years ago. Five years ago, if you could get your hands on a mining rig, you were very likely to make a lot of money; many people in the industry genuinely viewed mining rigs as a "money-printing machine." But that's not the case now; entering this industry has become extremely challenging.
Look, the price of Bitcoin has fallen to around $65,000 to $70,000, but the network hashrate hasn't decreased significantly, right? That in itself speaks volumes. Logically, if the industry were truly so profitable and the logic so clear, or conversely, if the industry were completely replaced by AI, you should see a more noticeable change in hashrate. But that's not the reality. The reality is, everyone is still keeping their machines running.
Why? First, because they need revenue. Even if they're no longer making a profit, as companies, they still need revenue to keep operating and to keep their employees employed. Second, because Bitcoin mining now plays an increasingly important role as a regulator for the power grid. High-power computing (HPC) operates 24/7 continuously; you can't easily shut it down. Therefore, the power grid actually needs loads like Bitcoin mining rigs that can be flexibly started and stopped to absorb peak and off-peak loads and help the entire power system expand. So many companies, even with thin profit margins or no profit at all, won't easily reduce their computing power.
That's why I say the problem isn't just that AI has stolen the limelight from the mining industry, but that it's becoming increasingly difficult for new miners to make money in this sector.
After 2028, monetary returns may no longer be a key driver for this industry.
host:
What do you think this industry will look like in the next two or three years, or even after 2028?
Liang Wang:
Bitcoin has a mechanism that everyone knows, but many haven't truly grasped the consequences of: the halving every four years. What does halving mean? It means that if the price of Bitcoin doesn't double, the economic benefits the entire industry receives from block rewards are decreasing.
So everyone knows that there will be another halving in 2028. The question then arises: if by then, the price of Bitcoin hasn't reached $300,000, or even a level sufficient to support miners' profits, what will sustain the industry? This is a question I've been pondering.
My view is that Bitcoin mining will continue to exist and will remain part of the overall energy landscape. However, I don't believe that monetary returns will be the core driver of this industry after 2028. I think it's more likely that the industry will continue to exist around several directions, such as grid balancing, waste heat recovery, residential applications, or utilizing resources that traditional energy systems cannot efficiently utilize. But if you ask me whether there will be another boom period where everyone rushes in and miners generally make a fortune, I'm honestly not sure.
Of course, I hope I'm wrong. I certainly hope Bitcoin will reach $500,000 a coin, and then everyone will rush back into the industry. But that's part of the story; nobody can really predict it, and I don't have a crystal ball myself.
AI and mining are not a zero-sum game.
host:
A popular claim in the market right now is that AI will directly steal electricity from Bitcoin mining. Do you agree?
Liang Wang:
I disagree with viewing this as a zero-sum game. AIHPC and Bitcoin mining rigs are fundamentally different types of workloads. AIHPC must run continuously, it needs to be online 24/7, and often you simply can't shut it down. Bitcoin mining rigs, on the other hand, are different. One of their biggest advantages is that they can be shut down when needed and quickly started up when there is ample power.
This is why I've always felt that in places like Texas, Bitcoin mining rigs are actually quite popular with the power grid and energy suppliers. It helps the grid absorb imbalances. It can relinquish power when needed, and it can also absorb excess electricity. Battery storage is certainly a solution, but from a cost perspective, it's much more expensive than Bitcoin mining. Therefore, I've always been relatively optimistic about the role of Bitcoin mining rigs in the energy system. I believe they haven't just avoided being replaced by AI; in fact, they may become even more important in the AI era in a different way.
Therefore, in my opinion, AI and Bitcoin mining can often coexist, or even complement each other, rather than one necessarily squeezing out the other.
North America remains one of the few markets with long-term predictability.
host:
From a regional perspective, where is future mining growth most likely to occur?
Liang Wang:
We have certainly visited many places and made many attempts. For example, we have had considerable experience in Kazakhstan. But the problem is that many countries initially welcome miners because you help them absorb previously idle electricity, but once local power shortages occur or the political environment changes, the mining industry quickly goes from being "welcomed" to being "targeted."
This is why we place greater emphasis on North America, especially the United States and Canada. It's not that there aren't problems there, but rather that there's greater predictability overall. When you do business in the US, at least you know the rules, the differences between states, and that if you genuinely create jobs, generate tax revenue, or help the power grid, local authorities are likely to understand and support you. However, in many other countries, the uncertainty is far too high. Sometimes, a single sentence, a policy change, or even a shift in the attitude of a powerful local figure can wipe out your entire business.
For a publicly traded company, this long-term predictability is extremely important. You can't gamble with shareholders' money on a market that may not even be able to continue operating ten years from now.
"The situation in China is very complex."
host:
The outside world has always been very concerned about the situation of China's mining industry. What is your view on the current situation of China's remaining mines?
Liang Wang:
The situation in China has always been complex, and I don't believe it's a simple, top-down, unified process. China is vast, and considerations differ across levels and regions. At the national level, there's a strong focus on financial stability, particularly the desire to prevent asset outflows through mining or Bitcoin trading—this has always been a crucial factor. Therefore, since 2021, Bitcoin mining and cryptocurrency trading have indeed been officially prohibited in China, and this remains unchanged.
On the other hand, there are local realities. For some places, Bitcoin mining was once helpful; it created jobs, generated tax revenue, and absorbed previously unused electricity, especially during economic downturns, when many people viewed miners as a way to monetize electricity infrastructure. So why do you still see some activity today? Because there is genuine market demand.
But I want to emphasize that we have never interpreted this situation as "China will once again welcome Bitcoin mining." We don't see it that way. Nor do we think it's reasonable to stake our resources on self-operated mining in China. As a publicly traded company, you can't base your long-term capital allocation on speculation about policy changes. That's why we've consistently focused on North America, rather than betting on whether China will develop some new crypto strategy.
Has AI stolen the production capacity of mining machines?
host:
Another issue in the market is whether it will become increasingly difficult for mining machine manufacturers to obtain chip production capacity as the demand for AI chips surges.
Liang Wang:
I don't think AI will take away all the production capacity. In the short term, chip production capacity will definitely have periods of tightness and periods of ease, but over the next five to ten years, I think supply and demand will return to a relatively balanced state.
Foundries like TSMC and Samsung make long-term investment plans worth billions or even tens of billions of dollars. They are looking at the next ten years, not next year or the year after. Mining chips are certainly part of their business, but they are never the whole thing, nor are they necessarily the most core part.
More importantly, do you have a long-term cooperative relationship with the foundry, successful tape-out experience, and the ability to truly create competitive products using a particular process technology? Each generation of process technology requires astronomical R&D investment and extremely high trial-and-error costs. New players without this foundation, even with money, will find it very difficult to break into the market.
This industry isn't about "I want to make the most advanced chip," but rather whether you can actually make it, and whether anyone will buy it. Therefore, I tend to view this as a long-term technological partnership rather than simply seeing it as AI taking away mining machine production capacity.
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