ASIC Chip Pioneer: The Next Wave of Bitcoin Mining Opportunity is Coming
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ASIC Chip Pioneer: The Next Wave of Bitcoin Mining Opportunity is Coming
Opportunities abound for ambitious mining and ASIC companies willing to pioneer the fields of energy and artificial intelligence.
Navigating Web3 tides with focused insightsBy: Bitcoin Magazine
Interviewee: Zhang Nankeng
Translation: 0xFacai
It is well known that after the fourth halving, Bitcoin mining is undergoing a major test. With block subsidies sharply reduced, hash price (revenue per terahash) has hit historic lows. At the same time, the post-halving mempool frenzy has subsided, further straining already tight mining operations.
Zhang Nankeng, founder and CEO of Singapore-based Canaan Creative—the creator of the first Bitcoin mining ASIC—sat down with Bitcoin Magazine in its first interview with North American media to share insights on the state of the industry. Zhang reflected on the origins of Bitcoin mining and shared his views on the future of chip design and environmental sustainability trends. He also highlighted emerging opportunities for Bitcoin in the Middle East and convergence between the Bitcoin and AI sectors.
The Open-Source Core of Bitcoin Mining
Founded in 2013, Canaan launched the first Avalon ASIC machine, revolutionizing mining and marking a turning point in computational efficiency for securing Bitcoin’s network. As the industry gradually moved away from traditional GPU- and CPU-based hashing, the adoption and commoditization of specialized ASIC hardware enabled commercial-scale mining operations to emerge.
Canaan’s shift did not happen in isolation—it followed the company’s decision to open-source both the Avalon hardware and management software, leading to widespread diffusion of ASIC-based hashing technology. Zhang noted that Bitcoin’s early embrace of open source was not a choice but “a requirement for anyone wanting to participate in the blockchain community,” as well as a mechanism to “decentralize computing power across the blockchain ecosystem.”
“The best way to defend against 51% attacks is to rapidly distribute ASIC-based computation to users worldwide.” Zhang estimates that due to the democratization and mass deployment of ASICs, the risk of 51% attacks has been greatly reduced. The open nature of Canaan’s chip designs later inspired major players—including China’s Bitmain and computing giant Intel—to develop their own ASIC machines.
Will Mining Efficiency Defy Moore’s Law?
As an ASIC chip designer, Canaan has benefited from over a decade of semiconductor manufacturing growth. At the heart of this progress lies Moore’s Law—the idea that computing efficiency roughly doubles every two years. Today, companies like TSMC, Samsung (SSLF), and SMIC are accelerating production of 3-nanometer chips in pursuit of optimization.
However, shrinking semiconductor architecture comes with challenges. Increasing transistor density on ever-smaller chips—sub-2nm scale—triggers quantum effects rather than classical ones. This shift can lead to transistor failures and potential deviations from Moore’s Law.
Now the question arises: Does Moore’s Law still hold, or will the boom in classical computing give way to a quantum bust?
Facing these fundamental limits in ASIC computing, Zhang acknowledged, “In the past, when we improved performance, the cost per terahash dropped. Today, that curve has flattened. This suggests technological advancement is entering a new phase.”
“We do see slowing progress in process nodes, pushing us toward new transistor technologies like GA (gate-all-around) or nanosheet, as well as backside power delivery. It’s no longer just about making surfaces smaller, but changing the structure of circuits themselves.”
“Bitcoin computing relies purely on digital logic, but today we’re moving toward mixed-signal designs with analog implementations,” said Zhang, noting that increasing complexity demands “design-technology co-optimization” (DTCO) between designers like Canaan and foundries that manufacture the chips. Despite these hurdles, Zhang believes ASIC efficiency “will continue rising over the next 3–5 years,” and the company plans to release at least one new product annually, with each generation delivering “over 20% efficiency gains.”
This efficiency gain was showcased at the Bitcoin Asia conference in Hong Kong on May 9, where Canaan unveiled its next-generation A15 Avalon miner, achieving 18.5J/T—improving upon the previous A14 model’s ~20J/T. Zhang noted the A15 is specially optimized for variable environmental conditions.
Notably, Canaan introduced an overclocking feature in the A15, poking fun at a common customer request: “Oh, you can get extra performance for free?!” Unfortunately, as Zhang pointed out, that’s not how it works—but the added functionality aims to offer A15 customers greater operational flexibility.
Opportunities Hidden in the Middle East
Now more than ever, miners are seeking efficiency improvements to reduce costs and increase revenue. While normal, miners are turning to new technologies and geographies in search of cheaper power.
Zhang noted that Canaan has strategically shifted in response, highlighting the company’s recent collaborations with mining firms in the Middle East. “The Middle East is eager to invest in high-tech industries, and these countries are particularly welcoming toward Bitcoin and cryptocurrencies. The region is poised to become a major digital hub.”
On regulatory developments in the region, Zhang pointed to “rapid progress in establishing complementary regulatory frameworks for mining.” As a result, companies like Zero Two—backed by Abu Dhabi’s sovereign wealth fund—are making significant strides in integrating Bitcoin mining with waste heat recovery for desalination.
Heat Recovery? A New Trend in Mining Sustainability
Since Canaan’s Nasdaq IPO in 2019, the Bitcoin market has surged, and so have Bitcoin mining companies. As Bitcoin entered the mainstream, publicly traded mining giants like Marathon Digital Holdings Inc (NASDAQ: MARA) and Riot Platforms (NASDAQ: RIOT) became household names during the 2020–2022 bull run.
But with increased visibility came greater scrutiny from environmental groups, notably Ripple-funded and poorly considered campaigns like Greenpeace USA’s “Change the Code.” When asked about environmental criticisms of mining, Zhang welcomed the conversation around sustainability without hesitation. “Perceptions that Bitcoin mining isn’t environmentally friendly are changing… Bitcoin mining actually helps grow the renewable energy sector.”
In particular, the Canaan CEO praised heat recovery as potentially the biggest untapped trend for residential and commercial applications. “Mining heat recovery products have launched this year. I believe in a few years, people will see many impressive products utilizing mining heat. Today, we can generate water close to boiling point through mining operations.” He sees this trend as foundational to both the sustainable attributes of mining and the broader concept of thermal monetization in the industry.
Zhang also emphasized that hydropower often faces mismatches between supply and demand—an area where mining can strengthen renewable deployment. Instead of relying solely on battery storage, “Bitcoin mining allows these facilities to run at full capacity most of the time. This could shorten payback periods to about 5 to 10 years—meaning the same capital can develop twice as many hydro plants in the same timeframe… The same principle applies to other renewables like solar and wind, which are economically constrained.”
He believes the industry will continue shifting toward low-carbon energy and expressed optimism that market forces driving the pursuit of low-cost power mean “mining can automatically balance environmental impact, economic returns, and development.”
AI + Bitcoin: Developing and Scaling Energy Assets
Typically, Bitcoin miners have acted as pioneers in electricity markets, flocking to regions with abundant power but low demand. The symbiotic relationship between underdeveloped energy resources and the inherently flexible, mobile nature of Bitcoin mining has driven ASIC-based computing to unlock edge-of-grid assets. But according to Zhang Nankeng, this is not the end of the story.
He sees a new relationship forming between AI data centers and Bitcoin miners—both hunting for the cheapest energy inputs. Zhang noted that “key players” and “early movers” are already recognizing the potential integration between Bitcoin mining and AI computing.
“In this context, Bitcoin mining can serve as an initial occupant of this ‘stranded energy,’ generating economic returns before AI compute fully comes online. This is exactly what we’ve seen over the past six months.”
Zhang also foresees AI high-performance data centers and Bitcoin mining coexisting at the same site even after AI facilities go live: “Considering the redundancy requirements of large-scale AI computing centers (25–30% power buffer)… Bitcoin mining can use redundant power and shut down once AI ramps up.”
Conclusion
Zero-sum and always its own worst enemy, the mining industry now faces additional pressure from the fourth halving, shrinking margins, and diminishing returns on the next wave of ASIC efficiency. It’s fair to say that extracting profit from mining is as difficult as squeezing blood from digital stone.
Yet on the flip side, positive trends are emerging—the CEO of Canaan believes opportunities abound for forward-thinking mining and ASIC firms willing to pioneer new frontiers in energy and artificial intelligence.
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