Bitcoin surpassed 40,000 USDT, and Coingecko quotations showed that the circulating market value of Bitcoin surpassed the total market value of Alibaba, becoming the world's sixth-ranked asset and breaking a record high. What impact will Bitcoin's skyrocketing have on the mining industry?
In this issue of "The Vernacular Big Coffee", we invited Yang Xiao, the co-founder of Panda Mining Machine & Niubi, and the CMO of Rolling Stone Miner , to share recent mining developments.
The vernacular blockchain is a popular science introductory media serving the blockchain vertical industry. The vernacular masters say that the series will focus on industry hotspots and will invite industry veterans to collide with blockchain ideas from time to time.
The following is the original text of this dialogue:
01Company
business development
Vernacular Blockchain Sanli: Two guests, please introduce themselves, and also briefly introduce the company's brand and main business.
Yang Xiao: Hello everyone, I am Yang Xiao , the co-founder of Panda Mining Machine & Niubi. We were established in 2014 and are the first batch of digital currency miners in the world.
It has been committed to becoming a TOP-level digital currency mining company for 6 years. The current business layout includes four main lines of mining hardware, mining infrastructure, miner services, and ecological expansion, covering global miners.
In addition, as one of the oldest cloud computing platforms in the world, Panda’s Niubi is established in 2014. It is backed by Harley Mining and has its own mines and real mining.
Relying on strong supply chain resources and rich operating experience, it has provided safe and reliable cloud computing power mining services for more than 700,000 users in more than 50 countries around the world.
Small salary: Hello everyone, I am a small salary as a rolling stone miner. ROCKMINER was founded in 2013 and has been a blockchain mining computing power service provider for 7 years. The main mining machine group and hosting business, while opening customized products and exclusive services to VIP customers.
Rolling Stone Mine is located in Sichuan, Xinjiang and other places, integrating high-quality and stable hydropower and thermal power resources. The site has a 7*24-hour professional operation and maintenance team.
02
under the influence of the stock market mining
Vernacular Blockchain Sanli: Bitcoin has risen nearly 300%+ in 2020, and broke a record high at the beginning of 2021. Benefited by the bull market, what is the current status of the mining industry in the near future? Is the business impact big?
Yang Xiao: This kind of market is definitely good for the business. The core is still reflected in the "cloud computing power business" and "mining machine sales business".
1. In terms of mining machine sales, Panda B7 PRO, the latest Ethereum mining machine from Panda, has been sold to the March futures, and all the previous products have been sold out.
Recently, many of my colleagues have found me with purchasing needs, and I am very sorry to tell them, sorry, there is no stock now.
After all, under the dual impact of the current soaring ETH price and the explosive increase of Gas, the payback cycle of Ethereum mining machines is very beautiful and impressive, so new and old miners are enthusiastically joining the ETH mining wave.
2. In terms of cloud computing power business, due to the explosive growth of the entire market and the exposure of traditional channels against the rise of BTC, more and more new players have begun to pay attention to the digital currency field and begin to participate in investment.
As a stable investment method in digital currency, mining naturally also attracts more users' attention. It just happens that our platform is going on the sixth anniversary celebration recently, so the overall purchase users and purchase amount have shown a relatively good growth.
However, at the same time, the supply chain of both BTC mining machine and ETH graphics card mining machine is very tight, so everyone must determine their own purchase plan and start at the right time.
Small salary: With the rising market enthusiasm, the number of incremental users in the mining market has increased significantly. In the past few years, traditional mining was dominated by large users, and mining farms only provided managed operation and maintenance services for large users.
Rolling Stone Miner became the first company in the mining industry to launch mining machine approval group products in June 2020. The product was popular with ordinary investors as soon as the product went online. At present, our mining machine group group business is also moving forward steadily.
03
Mining machine sales
Vernacular Blockchain Sanli: According to foreign media reports, the shortage of mining machines is getting worse. Although Bitmain used the skyrocketing demand brought about by the soaring price to double the price, the Bitcoin ASIC mining machine was sold out until August 2021. What do you think of this situation? Has it been this way in previous bull markets? How long do you expect this situation to last?
Yang Xiao: The current situation is still related to the overall limited production capacity. After all, both TSMC and Samsung have limited capacity for digital currency mining in the new manufacturing process.
In addition, no mining association had expected the current soaring of the market, and would not carry out very exaggerated production plan expectations, so basically manufacturers’ machines are now sold out of very long-term futures.
This is also the effect of the normal supply and demand changes in the market. After all, this round of soaring has shortened the payback period of Bitcoin mining machines from 1.5 to 2 years to about 300 days. Such benefits are still very, very attractive.
From the perspective of mining investment, the choice of entry time is very important. Therefore, more accurate calculations are required in the investment behavior of mining, combining the length of the return period and the margin of safety to configure the mining machine positions.
If the market continues to rise, then I think this behavior of grabbing goods will not be alleviated, but I believe that miners will gradually increase more production capacity, so Q3 futures should gradually increase. The game between buyers and sellers in the market will always appear with the rise and fall of the market.
Vernacular Blockchain Sanli: According to The Block Research data, in December 2020, Bitcoin miners' income reached nearly 700 million U.S. dollars, a record high in a single month in 2020. What is the current share of miners’ revenue from block rewards and transaction fees? What are the main profit points of mining companies like Rolling Stone Miners selling mining machines to users?
Small salary: The current currency price rate is at a new high, but the network is not congested. The average fee of miners’ income accounts for 10%, mainly due to block rewards. The current mining machine group products of Rolling Stone provide the following services to customers To achieve a win-win situation:
1. Rolling Stone shares the latest mining machines with users. Rolling Stone cooperates with manufacturers to jointly develop the latest mining machines, or get the supply of new mining machines as soon as possible. Miners know what it means to get new mining machines early. In the mining machine industry The value of information is huge.
2. Rolling Stone reduces costs with users . Rolling Stone itself mines so there is a large demand for mining machines. Through mining machine hosting, it helps large customers purchase mining machines in batches. In addition to the demand for mining machine grouping, these requirements are integrated. Through large-scale procurement, there is often a larger bargaining space with mining machine manufacturers, allowing users to enjoy price concessions lower than market prices, and Rolling Stone itself can maintain profitability.
3. Rolling Stone provides one-stop hosting services for reasonable fees. An experienced mine operation and maintenance team can provide stable computing power operation and maintenance, self-built mines provide lower electricity costs, and no third party participates in reducing share and legal risks.
04From
which parameters to judge the cost performance of the mining machine
Vernacular Blockchain Sanli : Next, we ask a question that ordinary investors care about. According to reports, the North American listed mining company Marathon Patent Group has completed a financing of US$200 million and will purchase more mining machines.
At present, the enthusiasm of investors to buy mining machines is also high. From all aspects, what is the most suitable mining machine for ordinary investors? From what parameters can ordinary investors judge the price-performance ratio of mining machines?
Yang Xiao: The daily net mining income equals the mining income minus the electricity bill. So we will look at it in two parts.
The first part is the mining revenue, which is related to the stable computing power of the machine. The higher the computing power of the machine, the more stable the operation will be. Under the same conditions of the entire network computing power and currency price, the mining revenue will be higher. The second part is the electricity bill, which is related to the power consumption of the machine and the electricity price.
Therefore, in order to make daily net income high, it is necessary to increase mining income and reduce electricity bills. The number of back-to-back days is the price of the machine divided by the daily net mining income. The cheaper the machine, the higher the daily net income. The shorter the back-to-back days, the higher the cost performance.
Therefore, from the perspective of cost-effectiveness, BTC mining machines & ETH mining machines are similar, mainly in terms of price, computing power, energy consumption ratio, and stability.
Judging from the current payback cycle of BTC miners and ETH graphics card miners, the static payback period of BTC miners is about 300 days, and ETH is about 200 days, so more old miners are also entering more The track for ETH graphics cards.
Let me give you a key introduction to the choice of ETH graphics card machines. Since ETH mainly uses graphics cards for mining, compared to Asic machines, small currency mining and machine residual value can be performed. This is the special feature of graphics cards, so you also need to consider when choosing.
Graphics cards are divided into two major types: N card and A card. Two of the core types are distinguished by many models, such as the common 580, 590, and 5600XT for A cards, the common P106, 1060, 1660s for N cards, and the subsequent 2030 series.
In terms of currency, because the ecology of the N card will be better, for small currencies, the cost performance of the N card is generally higher than that of the A card. However, for mining ETH, because of the algorithm affinity of the A card, A card will be more cost-effective than N card, and miners need to choose the type according to their subsequent main mining currency.
In terms of salvage value, the general market salvage value of the N card will be higher than that of the A card, and the higher the salvage value of the newly produced model. This is basically the same as the traditional computer accessories market.
Therefore, the final card type selection still needs to be selected according to your preferences. If you are an ETH miner who is looking for a quick return, choosing A card will be more cost-effective. If you want to choose the residual value, or want to focus on small currency mining, you can consider the N card.
Of course, given the current scarcity of graphics cards, it's pretty good to get a graphics card.
Small salary: Different mining machines correspond to different styles of investors. Rolling Stone sells bit mining machines, graphics card mining machines, and small currency mining machines.
In view of the current market characteristics, Bitcoin leads the rise, Ethereum follows the rise, and most currencies have limited gains. We recommend the latest Bitcoin and Ethereum mining machines from major manufacturers. Ordinary investors can judge the cost-effectiveness of mining machines in terms of power consumption, computing power, stability, and operation and maintenance costs.
05
Ethereum mining
Vernacular Blockchain Sanli: After the launch of the Ethereum beacon chain, will it have a big impact on Ethereum miners? What is the speed of recovery of Ethereum mining at this stage? Considering the payback cycle of mining, do you think ordinary investors are still suitable for participating in Ethereum mining?
Small salary: ETH2.0 to POS is a long-term process. There is no official timetable. The industry expects to take more than 2 years.
For investors who invest in mining in 2021, the current payback cycle of ETH mining is about 7 months, and the recovery of machine residual value is faster, and there is no pressure on mining after the payback, so the impact this year is not significant. .
Vernacular Blockchain Sanli: There has always been a view before that when Ethereum cannot be mined, the computing power will be cut to Ethereum Classic or other suitable POW coins. What do you think?
Yang Xiao: After ETH2.0, the mining mechanism has changed from PoW to PoS, and then it may indeed be impossible to conduct pure PoW mining.
The launch of the beacon chain in December 2020 indicates that the PoS transfer has been put on the agenda (ETH2.0 officially enters Phase 0). Many miners are asking us if Ethereum can’t be mined, but in fact the entire 2.0 implementation is complete It still has to go through Phase1 and Phase2, and there are still a lot of uncertainties in such complex ecological migration.
According to the current latest road map and V God's plan, it is inclined to advance to the next stage in November 2021 or later, at least until this point in time that PoW can be mined all the time.
In addition, the game of the miners' own interests in the entire ecology will also be an issue that needs to be considered and valued. I believe there will be many subsequent variables. Therefore, we are also optimistic that PoW can be mined for at least 1-2 years.
In the PoW world, those with computing power will win the world. For the public chain ecology, such a huge graphics card computing power market will definitely be paid attention to by more high-quality new public chain projects. After the market gradually matures, I believe it will There is the possibility of new currencies such as ETC, or CKB and CFX that have recently received attention.
However, the current computing power of the entire ETH network is about 300 TH/s. If you directly switch to a certain 1-2 new PoW currency, you may not be able to withstand so much computing power.
Therefore, we hope that more new PoW currencies can be mined in 2021, and we also hope that the PoW ecosystem can be enriched.
06
IPFS mining
Vernacular Blockchain Sanli: IPFS mining is a focus of mining in 2020. It is understood that Panda Mining Machine started to lay out the Filecoin mining track as early as mid-2019. For investors, what are the benefits of IPFS mining? ? From a company perspective, what do you think is the effect of this layout?
Yang Xiao: The biggest difference between FIL mining and BTC mining is in two aspects: 1. The principle of mining is different, and 2. The profit model is different. I have briefly introduced these two concepts many times before, so I won't repeat them. Let me talk about the FIL mining revenue that everyone is concerned about.
At present, the mining of FIL is still in a very early stage. Due to the very deflationary control of the economic model, the output of the currency needs to be pre-collateralized, and it takes 180 days for the mining revenue to be released.
Coupled with the current 1559 protocol, the consumption of Gas is about 100,000 FIL a day, so that the current miners’ return cycle is not particularly exaggerated. However, it is also related to the current block reward income.
In the long run, due to some of the underlying technical characteristics of IPFS and Filecoin, there will be a large number of applications in the field of distributed data storage, secure storage, permanent storage, and data confirmation in the future.
For example: Internet of Things, edge computing, smart healthcare, smart city, etc. This is also the most attractive part of FIL. It should be the closest project to the real application in the entire blockchain world, so the actual commercial value of the application will also be the basic support of FIL's entire economic model.
We have established a dedicated IPFS business department that will continue to research and invest in FIL mining, and will also polish more assets that are more suitable for ordinary users to participate in FIL for everyone to choose. You can continue to pay attention to us.
Vernacular Blockchain Sanli : It is understood that Rolling Stone miners have not laid out the Filecoin mining track. What are their considerations?
Small salary: First of all, the focus of Rolling Stone has always been the direction of PoW mining. When Rolling Stone miner group products were launched in June, the products we launched were all the more familiar mining machine products such as BTC, ETH, ZEC, and CKB. . We are more confident about the mining profit model of this type of product, and it is easier to convince customers.
Second, IPFS is a very good project . We have been paying attention to it. However, during the crazy selling of cloud computing power products from July to October, we felt that the IPFS mining model has not yet been determined, so the profit model of mining is not Minglang, we don't want to push such risky products to our novice customer groups.
In fact, it also proved that our judgment was correct. The mining model after the launch of IPFS has caused many original cloud computing power products to fail to be paid as originally expected.
IPFS has been online for nearly 3 months now, and the mining model has been determined. We will also launch IPFS mining products at the right time.
07
How do new players judge whether the platform is reliable?
Vernacular Blockchain Sanli: At the 3rd Xiamen International Blockchain Development Summit, Mr. Yang mentioned that a new player looking for a reliable platform, starting with small funds, really felt the mining After the charm in the mine, increase funds for better actual investment.
What do you think are the most important characteristics of new players in judging the reliability of the platform? Compared with other platforms, what are the advantages of the Panda mining machine?
Yang Xiao: Mining is one of the entry ways to obtain digital currency. The emergence of cloud computing platforms has lowered the entry barrier, making the entire mining easier and more convenient. The threshold for mining on the cloud computing platform is low, but the threshold for doing a good job of a cloud computing platform is not low.
Every wave of quotations will also be surging with a large number of unreliable platforms. This requires everyone to pay attention to the choice of platforms. As elders in the industry, we have seen too many ups and downs of cloud computing platforms in the past few years.
Many users will ask, "We are newbies, how do we choose a reliable platform?" I personally suggest to distinguish from the following points:
1. Whether there are physical assets behind the platform and stable supply chain. For example, the supply chain of our platform adopts the B2C model, and the operation and maintenance of core mining machines adopts Panda's self-built mine, which can fully guarantee the stability and reliability of the machine and power supply. With physical assets underpinning, you don't have to worry about the risk of "running away".
2. Whether users provide long-term sustainable profitable products and services. The reason why Niubi is trusted by users is that we have been distributing mining revenue to users for 6 consecutive years.
At the same time, from the user’s point of view, many "risk-off" measures are provided: We adopt a theoretical income method, and the risk of power outage, machine damage, and calculation power fluctuations in the mining process are all borne by the platform; a reduction was introduced during the bear market The electricity price guarantees the user's income, and changes the perpetual contract rules, extends the user's income, etc., so as to ensure that users can survive the trough and cross the bulls and bears.
3. Whether the platform itself is trustworthy to maintain transparent information operation. In addition to the endorsement of big brands, we believe that industry transparency is also particularly important for trust issues.
Newbit gives users full right to know. We disclose all the information of each product's electricity bills/power consumption/return rate/revenue distribution mode. The information is transparent. Only by allowing users to fully understand the product, it can naturally solve the problem of users. The problem of platform mistrust.
08
Advice for ordinary investors
Vernacular Blockchain Sanli: As the core of maintaining the operation of the blockchain network, mining is regarded as a business in the industry that makes a profit without losing money. For ordinary investors who want to participate now, what suggestions do you have?
Yang Xiao: Compared with currency speculation, mining is still a business that is more stable and closer to traditional entities. In addition to choosing the right time for entry, investors also need to find reliable suppliers and partners, and use risk hedging tools. Balance the benefits and risks, achieve scientific mining, and make money rationally. In 2021, the Year of the Ox, I hope everyone has a good return on investment.
Small salary: The machines on the market have also risen along with the market. Under such a trend, for Xiaobai users, hedging needs to be done accordingly to lock the machine output profit so that the market will fluctuate greatly in the future. There is no impact. At present, Rolling Stone has launched hedging services for group-joining users.
The market is hot, and the supply of mining machines exceeds demand. What do you think of this phenomenon? Welcome to write down your opinion in the message area.
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"Disclaimer: This article is the author's independent point of view, and does not represent the vernacular blockchain position. This content is only for the popular science learning and exchanges of encryption enthusiasts, and does not constitute investment opinions or suggestions. Please treat it rationally, establish a correct concept, and increase risk awareness. The copyright of the article and the final interpretation right belong to the vernacular blockchain. 』
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