Mining Operating System: The New Battleground of Efficiency and Decentralization

Summary

The mining operating system (MOS) layer located between ASIC hardware and mining pool software has become a key strategic tool for enhancing efficiency and creating competitive advantages.

• Application Status: Approximately 56% of SHA-256 hashing power globally is currently running non-original firmware. Among third-party solutions, a certain vendor leads with a market share of 26.4%, while the share of original firmware has dropped to 44.4%.

• Growth Drivers: The economic situation after the Bitcoin halving in 2024, fluctuations in energy prices, and the demand for automated management of large-scale Mining machine clusters continue to drive miners towards open and customizable system architectures.

• Open Source Milestone: A well-known company has decided to open source its self-developed Mining operating system before the fourth quarter of 2025, further establishing the rationality of the open source model, which may make the maintenance costs of closed-source firmware more widespread.

Development History

|--------------------------------|--------------------------------------------------------| | Milestone | Significance | | 2011 - CGMiner | The first general-purpose ASIC Mining software, laying the foundation for all original firmware | | October 2018 - Release of certain open-source firmware | Implemented AsicBoost functionality on a certain model of mining machine (approximately 13% power savings), and launched a fully auditable codebase | | 2018-2020 - The Rise of Certain Commercial Firmware | The commercialization of auto-tuning combined with a model that charges a 2-3% development fee became popular in large mining farms in Eastern Europe | | 2022 - A new firmware released | A U.S. mining pool operator enters the firmware market, with its hashrate growing from 3 EH/s to 13.7 EH/s by 2024 | | March 2024 - A listed mining company | The first firmware and control board combination independently developed by a listed mining company has been deployed to 200,000 mining machines and is now available to the entire industry | | Announcement in June 2025 - A well-known company MOS | The company promises to open-source a modular peer-to-peer Mining operating system, with the goal of releasing it in the fourth quarter of 2025 |

Market Landscape (2025 Forecast)

|----------------------------|-------------------------|--------------------|---------------------------------------| | Firmware Vendor | Estimated Network Share | Core Profit Model | Significant Highlights | | Supplier A | 26.40% | 2-3% development fee | Continuously increasing support for new model mining machines and unlocking the SD card bypass for the original factory signature lock feature | | Supplier B | 5-6% (Open Source Version) / Based on Paid Premium Version | Open Source Core (0 Fee) and 2% Fee | Added new protocols and new programming language kernels, supporting most mining machines from certain mainstream manufacturers | | Supplier C | 4-5% | Subscription or Mining Pool Rebate | Passed relevant certification, hashrate increased by 350% compared to the same period last year | | Original Firmware | 44% | None | Still dominant on new hardware within warranty period | | Others (including self-developed systems) | Total approximately 18% | Mixed multiple modes | A certain listed company's firmware officially launched; a certain vendor focuses on SaaS hosting layer |

Hardware background: A certain mainstream mining machine manufacturer still accounts for about 75% of ASIC shipments, followed by two other manufacturers with 18% and 7% respectively. Therefore, the firmware market remains a major competitive area that is still fragmented.

Mining Demand ------ The Importance of Firmware

a. Efficiency and Profit Protection

• Chip-level auto-tuning can improve energy consumption by 8-20% per terahertz (J/TH) compared to factory settings, which will be crucial after the subsidy halving in April 2024.

• It can operate under reduced pressure when electricity prices are high, and can overclock when computing power prices soar, providing real-time flexibility.

b. Mining machine cluster automation

• The API for cluster-wide image refresh, power limit scripts, and new protocol block template negotiation reduces operational costs and minimizes review risks at the mining pool level.

c. Security and Auditability

• The open-source firmware eliminates concerns about hidden development costs or the manufacturer’s "kill switch" (referencing an incident in 2017).

• The built-in malware scanning feature can neutralize common mining botnets that hijack computing power.

d. Asset lifespan

• Temperature-aware tuning can extend the lifespan of the hashing boards and postpone the refresh cycle of capital expenditure. According to a study, 86.9% of mining machines are resold or reused rather than scrapped.

The Impact of Open Source and the Entry of a Well-Known Company

|---------------|----------------------------------------------------------------------------------------------------------------------| | Dimension | Impact Assessment | | Competitive Pressure | The company's positioning of "no need for third-party vendors" may compress the existing 2-3% development cost economic model, forcing vendors to shift towards value-added SaaS or hybrid licensing models. | | Decentralization | The new system aims to enable a large number of new miners to operate peer-to-peer without a closed coordinating layer, which aligns with the concept of miners directly building blocks under the new protocol. | | Ecosystem Standardization | An IoT-style architecture with an open record may drive the development of universal APIs across hardware product lines, reducing integration costs for immersion cooling, demand response, and AI-assisted maintenance. | | Strategic Flexibility | Deep vertical integration has created hedging mechanisms to respond to potential scrutiny and provides a genuine endorsement narrative. Investors should pay attention to the governance and licensing choices of the new system codebase (e.g., GPL v3 vs. Apache 2.0). |

Investment Impact

a. Firmware Supplier

• There is a risk of price compression, but the overall market volume is expanding; companies with adjacent income (mining pools, brokerage, derivatives) have stronger risk resistance.

• If a fully open-source alternative is promoted, the large market share and closed-source code of a certain mainstream supplier may face pressure.

b. ASIC Manufacturer

• Locking strategy (signature mirroring) may alienate customers; collaborating with open source architecture or launching "high-performance" official mirrors may maintain demand premium.

• The modular control panel suggests the possibility of completely bypassing the original factory control panel.

c. Mining operator

• Economic benefits are increasingly dependent on the complexity of software comparable to energy procurement; allocating R&D resources or collaborating with firmware suppliers has now become a core part of the strategy.

• If miners can prove higher J/TH through open-source firmware, the regulatory narrative surrounding energy use will be strengthened.

d. Capital Market

• Mining companies with proprietary firmware may receive a valuation premium due to their intellectual property and profit defense capabilities.

• Investors should carefully examine whether development costs or subscription revenues are included in operating income or offset as costs.

Main Risks

• Security Vulnerabilities: Open source code repositories attract scrutiny but also public exploitations; strict code signing and continuous integration audits are crucial.

• Regulatory Uncertainty: In certain jurisdictions, open-source algorithms may be incorrectly labeled as "subject to export controls."

• Manufacturer Resistance: Firmware locking may be upgraded, increasing capital expenditures for replacing control boards.

Conclusion

The MOS layer has evolved from hobbyist hacking into a critical profit center and a vehicle for Decentralization. As open-source initiatives (backed by existing heavyweight participants) gain momentum, competitive advantages will shift from closed-source auto-tuning to ecosystem coverage, data analytics, and energy grid integration services.

Investors seeking to invest in Bitcoin Mining should evaluate mining operators and service providers from the perspective of software leverage and open-source compatibility, rather than just hardware scale. The next efficiency S-curve will be written in code.