Coinbase invests in a US mining company as part of a diversification effort

Coinbase Ventures, the investment arm of the major cryptocurrency exchange, has invested an undisclosed amount in Titan, a developer of software and services for the industrial mining of Bitcoin (BTC).

According to Titan’s announcement, the investment will help continue the development of the company’s products and improve the efficiency and profitability of Bitcoin mining companies.

Ryan Condron, Titan Co-Founder and CEO, said, “Mining has evolved from a hobby to industrial and critical global computing infrastructure, and Titan is poised to help world-class miners meet these challenges.”

Coinbase invests in a US mining company as part of a diversification effort
Coinbase invests in a US mining company as part of a diversification effort

Titan offers advanced pooling and mining software specially designed for professional miners in the United States. The network of mining nodes and panels enables miners to better compete globally, according to the company.

Titan previously launched Titan Pool in partnership with CoinMint and CoreScientific, two major mining infrastructure providers in the US. Among the advantages offered by the group, Titan cites increased transparency and, most importantly, the resolution of some jurisdiction problems for American miners.

China currently makes up the vast majority of bitcoin hashrate. The relative dominance can be attributed to a combination of attractive electricity costs and a localized supply chain.

The Sichuan region is particularly attractive to miners because of its cheap hydropower. Its importance is so pronounced that the local seasons have a strong influence on Bitcoin’s hash rate. However, cheap electricity isn’t unique to China, as some regions in the US, Canada, and Europe are equally competitive.

In the mining supply chain, however, Chinese companies dominate much more. Mining hardware manufacturers are almost entirely based in China. This gives local miners a strong advantage in the local area as there can be difficulty exporting and importing certain chips and equipment.. Although the US is catching up in terms of mining hash rate, which is 14% of the total, local businesses are still using Chinese-made equipment.

This can be particularly problematic in today’s geopolitical environment, where the US is actively banning products and services made in China, and even prohibiting investments in Chinese companies.. The mining industry has already started to react and some traders have reduced the hash rate. While President Trump’s departure may help ease tensions a bit, some analysts believe a fresh start for U.S.-China relations may not be in sight.

Titan focuses primarily on the software side of the mining supply chain and provides a national pool for miners.. There have also been some developments in local maintenance infrastructure, with Bitmain offering certification courses for technicians in the US in May 2020.

Interest in diversifying the mining industry away from China’s dominance appears to be great, but it is unlikely that full independence will be achieved until ASIC manufacturers from other countries step in.

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