Bitcoin winter: migrate to low price area by 98% off miners

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Xinjiang Shihezi: peak period, nearly 500 thousand sets of machine roar here. 7*24 hours of operation, these mills monthly consumption of 500 million kwh, equivalent to 100 million households a day of total energy consumption.

Before the ore miners community ant S9 popular models, a year ago in the market speculation in the highest to 3 in Taiwan, in the currency of successive decline in second-hand price, minimum sale price is only 600 yuan.

Some of the miners in Xinjiang in order to get the goods, to sell their car to send money, even to the housing, as long as they believe in “machine to hand, spend all earn back”.

Tencent news “author Liu Peng” periscope

150 kilometers west of Urumqi, Shihezi, Gobi on the wind. At the end of November, just under the snow, the temperature suddenly dropped to 15 degrees below zero.

Miner Liu Haiyang was busy workers hired temporary command, just the arrival of the 10 thousand bitcoin mining machine case, and then transported to the newly expanded good factory. The distant chimney ejects smoke, sunset through the dusty air, the metal shell on yellow light silver mine.

Bitcoin, since 2008 was “Nakamoto” invention, according to the model, computing ability can use the chip in the bitcoin system, every ten minutes from the block (block) in the ongoing “Hashi collision”, to win the right to obtain the reward system of accounting, bitcoin. The boring and repetitive, known as “mining”.

In the bitcoin operation in the first few years, a notebook computer can play a role. But China miners will approach, mining made a big business, they rely on the design and manufacture of professional Chinese machine, and the cost of electricity in Xinjiang, Sichuan and Inner Mongolia, cheap, monopoly of the most upstream industry chain: bitcoin mining.

Liu Haiyang is one of the typical Chinese miners. More than a year ago, his name of “cloud computing” with the Shihezi electric power company 0.28 yuan per kWh of electricity price concessions, rent a ceramic processing enterprises of the plant, and be transformed into Taiwan machine can accommodate 40 thousand seats. In order to more stable feeder power supply, Liu Haiyang even took about twenty million, built two substation transformer.

Behind the high investment, high return potential is the temptation to bring. In Shihezi, such as the Liu Haiyang mine, there are dozens of large and small, in order to avoid attention, they hide in cloud computing, technology companies, as the sign of the factory. According to incomplete estimates, during the peak period, nearly 500 thousand sets of machine roar here. 7*24 hours of operation, these mills monthly consumption of 500 million kwh, equivalent to 100 million households a day of total energy consumption.

And now, they are threatened by growing crises.

From the beginning of November, bitcoin prices show free fall down from a high of 45000 yuan, the minimum fell to 25200 yuan, the rate is as high as 40%.

The successive decline, bitcoin prices have more than one machine breakdown cost, namely the mining income is insufficient to pay the fee and management fee. According to the largest pool of fishpond in China, the Shenma M3 mining machine, 20 thousand yuan at the beginning of the year, has already reached the price of shutdown.

Some small and medium minitype mines, which have been unable to maintain, have been unable to keep the mine machine secondhand. In the miner group, the most popular type of mine machine model ant S9, a year ago in the market the highest to 3 in case of the case, in the currency price even down, the second-hand transfer price is only 600 yuan.

In a panic, a large mine with lower electricity price and better cost was held, and the “land merger” movement was opened. The secondhand mining machine was transferred to the new mine and kept running after the power supply was inserted.

Through the last cycle and become the “mine hegemony” on the bit continent and jiaxan, it is also beginning to look for suitable mines and cheap electricity prices everywhere in Xinjiang. “Bull market mining machine, bear market digging” are their principles.

With electricity migration, dislocation competition, use of financial instruments hedging… Between the shift and transfer, a war has been struck by the elimination of high electricity prices and the elimination of small mines in large mines by low electricity prices.

But even if the winner of the merger war can not predict his own fate, he has to watch the spring in the long winter.

The miners were born because of the tide of the times, and as the tide of the times faded. The Tencent’s “potential” visited a number of mines in Xinjiang to record all this.

A miner from 30 thousand to 600

In the declining price of the coin, the old Luo of 2000 Avalon A741 mines is the first “power out”.

Unlike bitcoin’s deep technology, the mining business model is simple and rough: the money that has been dug is left after the money, electricity and site fees are paid, so it can be guaranteed to run. Once the currency price fell, the money dug was not enough to cover the cost of electricity coverage. In order to stop the loss in time, the miners had to remove the power from the roar and temporarily shut down the machine.

Electricity is the lifeline of the mine. Its price and stability determine the profit level of the mine.

In general, the electricity price that the small mines can talk about is much higher than that of the large mines. As the largest expenditure item in the mine, the electricity price at the end of the cost means that the competitiveness of the small mines is far weaker than the large mine.

Lao Luo in this period of time dug 25 bits in total, according to the quotation, income about 500000, but the electricity fee is 600 thousand, “the same mine, the big mine may run flat, but in my here, Yu Yue dug more compensation, simply shut down the machine.”

The feeling of panic began to spread. In November 25th, a big shade line was highlighted again, the price of bitcoin is approaching 25000, which is also the most popular of the miners’ group of ant S9 model mining machine.

More small miners joined the ranks of the clearing. But the situation was worse than they imagined. Four or five days ago, the second hand S9 market quoted prices around 1200. As the price of the currency approached the shutdown price, the price of S9 was directly cut to 600.

“This is a machine for 30 thousand dollars a year ago!” A small miner, who was forced to leave the field, was excited. Like a misguided lamb, in the cold winter coming the node, the slightest master of their own destiny.

An old miner told the Tencent “the potential”. From time to time, the miners who entered after last November almost failed to escape the fate of the lamb. The worst of them is the wave that entered in January 2018.

At that time, the price of bitcoin has reached a peak of 120 thousand yuan in a year long rush. It is able to “produce” the bitcoin miner, which is regarded as the golden egg of the chicken. The price of the factory is still two or three times more than that.

That was the day of the revelers of the miners. In order to get the goods, some miners in Xinjiang send money, cars and even houses to the salesmen. They believe that “as long as the miner can get to the hands, they will be able to make a profit.”

In the past 10 months, they didn’t even have the money to buy the mine. Second hand miner prices fell again, “the equivalent of fixed assets lost 90%, can say no blood,” the old miners said.

Migration to low price areas

When winter comes, the law of the jungle is highlighted. Small mines in succession have become prey in the mouth of a large field. Miners who have been sold by small miners to sell the mine, into large mines, power supply, continue to roar.

Liu Haiyang decided that it was his chance. 0.28 yuan of electricity price, and forty thousand stations of the warehouse, let him in this round of power shuffle fighting battle in the advantage. “A few hundred dollars of S9, if it is still the current currency price, three months can be back.” He paused and added, “if you don’t dig the current S9 on the market, someone will pick it up.”

Not willing to leave the medium size of the mine, is also looking for a way out. To find cheaper electricity, they look at the wider Xinjiang border.

Near the border, the city of Huo Cheng and Yining is the lowest price of electricity known in the miner circle. However, because Yining has taken place many times to suddenly check the property of the enterprise, many mines are punished by blackout, and go to the “blacklist” of the miners. The miners also use “JQK” to say, “start using low price to tick your past, then ring you, and finally K you”.

However, the properties of forged electricity have occurred in the past. Some of the mines are attached to the local energy enterprises and apply in the name of thermal power, and the electricity price is only 1 Mao after the state subsidies. But such operations are only suitable for higher currency prices, and they have earned money from the money they have invested before they are checked for electricity.

There is also a look at a similar country. In Uzbekistan, not far from Xinjiang, the price of industrial electricity consumption is only 23 Fen of the RMB, and the price is also low in Russia, about 25 Fen.

But accordingly, they need to bear the risks of different institutions and cultures, as well as possible security risks. The miners selected the site in the old industrial factory building, which had been robbed of the masked people who had been trampled in a few days, and the newly loaded miners were washed out.

The construction of infrastructure is also an important reason for restricting the mining field to go out. The world’s first largest mining machine maker in the world is looking for a mine in the world. After visiting more than 10 countries, the Tencent’s “potential” concluded that power generation and infrastructure are still the best in China. “In particular, Xinjiang, the 750 thousand volt high pressure ring network, especially stable, and rich coal resources, power generation is very abundant, used for mining is very suitable.”

It is for this reason that bit continent still owns a mine of 50 thousand miners in Xinjiang, paying tens of millions of dollars per month for electricity.

The Tencent “the potential” learned that, in addition to its own mines, the bit continent in Xinjiang is also in the near future. At the end of November, bit continent just set 50 thousand large miner trusteeship under a mine near Shihezi. The other domestic mining machine manufacturer, Jia Nan, also has 10 thousand units in the area.

The survival skills of the bear market

The retail miners are retreating and large capital enters the field with more cash flow to support, reduce the return expectation and lengthen the investment cycle.

Compared with a month ago, bitcoin total network computing power dropped by 14.8%, which also meant that the difficulty of mining was reduced by 14.8%. The continuous retail miners leave the field, bringing about the reshuffle of the force, and the miners are looking for the survival strategy under the new round of battle.

“It was a good money to get into this industry last year, and the feeling of this year was too fast.” Jin Xin, the founder of the minba mining machine, said, “to live in a bear market, we must have the right cost and survival skills.”

Before entering the mine, Jin Xin started a number of projects, but all because of the negligence of cash flow failed. In October 2017, he started studying mining and locked his eyes on a relatively small market card machine. Unlike the ASIC miners produced by the bit continent and jiaxan, the graphics card machine corresponds to the digital currency of the ETH (ether Fang), XMR (Monroe coin), Zcash and so on using the PoS algorithm. Among them, the ether workshop is the fundraising currency that swept the global ICO activities, about 11 thousand yuan at its peak in January 2018.

Two months later, he was excited to reveal to the Tencent “the hope of the visit”, “the two months make more money than I made for three years.”

But the profit also lasted only two months. In 2018, as the digital currency went down to the bottom, he was particularly sensitive to the cash flow. He cut off the ASIC bitcoin miner in his own mine and put it all into the graphics card.

Compared with the ASIC mining machine, although the operation and maintenance cost is higher, the power consumption of the developing card miner is slightly lower and the global force distribution of the anchored digital currency ether workshop is also more dispersed. More importantly, the core component of the graphics card machine, the developer card, can be removed at any time and back to the game market. For players playing games in Internet cafes, there is no difference between the video card and the new product.

“There is a big difference in the card machine between miners and miners are in accordance with the current game market price to give its currency pricing, while in the game market, the core components of the machine card value is constant.”

Accordingly, Jin Xin developed his bear survival strategy: miners from the liquidation leave close to second-hand card machine, to cover the cost of a slight surplus and the moment in the currency price, plug in the power expansion of work force, once the currency price fell to the cost line, then sell off card, if the currency prices rose to bull market. Take card to miners.

With the CBBC cycle, graphics transfer between miners and game player. Look, this is a near the pink of perfection strategy.

“But if the currency price has been falling?” “Periscope” asked.

“It had to recognize.” Jin Xin’s answer is smooth and clean.

At least for now, Jin Xin’s strategy is effective operation. He also studied the field of energy consumption is down 10%, is a part of force to undertake business operations of artificial intelligence orders.

At the end of November, another center of domestic mines in Sichuan ushered in the dry season, which has brought a large number of mobile phone two to him. His team is busy testing the shelves, and access to power.

Let him proud is that with the continuous mill shelves, mine now has 1% square network is Ethernet, “equivalent to get a stake in the etheric fang.”

To dig coins and short currency price

Bitcoin on a bear market lasted for two years. In a bitter dig, Tun coins do not sell the miners have a surprising return in subsequent bitcoin bull market, the industry has become legendary among people.

Over the past four years, was a round of the coin Tun miners look up to as the standard rules, this round of the bear market is no longer applicable. The miners are facing a more complex market circulation: bitcoin about 4000000 more, the market value is the circulation of tens of thousands of yuan, to cash exchange many thousands of.

The new generation of miners rarely emerged like bamboo shoots after a spring rain Tun currency, exchange, to provide them with financial instruments more and more, learn to hedging lock ahead of earnings, is one of the essential skills they live in a bear market. Bitcoin factory production mode, upgrade to the financial model.

Hedging, in simple terms, in the spot market and futures market at the same time the same amount but in the opposite direction trading activities. The use of futures and spot prices with up and down the establishment of hedging principle, use futures to fill the spot the loss of profit.

For example, next month I output 30 coins, but a month after the currency price in accordance with the trend is likely to continue to fall 10%, then I will exchange in the air under a single, sold at current prices, a month after the delivery of 30 yuan.” Jin Xin explained, so you can lock the currency income, and not to bear greater losses in the stock market fell.

But the miners groups frequently hedging operations, let them consciously or not, has become the biggest force in short bitcoin.

“Everyone in the end is short, and we all want to protect themselves to currency prices continue to decline, but prices fell to mine operating currency.” Jin Xin said, “a bit like Arano Ki, not short to be eliminated, we are short of last heroic death!”

The bite of financial instruments to hedge the mission from the open mouth, bitcoin futures, but live into speculation.

In each game, every step carefully, to see the spring.

Everything is not over yet

In November 28th, falling bitcoin temporarily stopped declining, the day rose 11% during the return of more than 30 thousand.

Jia Nan Yun Chi even as a pretext, immediately announced several new mills, discounts.

But the trend is unstoppable, the last radiance of the setting sun a day later, currency price turned to continue down.

To winter. Liu Haiyang’s ten thousand mills has been plugged in, Jin Xin also received a number of second-hand goods, Luo in liquidation and migration between hesitate.

There are hesitant CHINT dealer in Shihezi. A boy came to the door, open to the 50 thousand power switch, big list suddenly fell on his head, so he did not dare to believe.

The 50 thousand switch is for 50 thousand bit, just a single machine hosting. Winter to spring and winter, the bull market bear market selling machine, mining is past experience to tell them the truth.

It is also a bear market in the last bit from the mainland invented the world’s first bitcoin miner ASIC Chia Nan Yun Zhi took the hands of a mine in Inner Mongolia Dalate county. Is the shuffle, the mainland has become the rise of a bit.

This story inspired the winter miners. Since December 2nd, Shihezi has third winter snow. 18 degrees below zero, the wind blows, the miners were dormant, waiting for the spring. Hundreds of thousands of mine still running, screaming, carrying their hope, never sleep.

From the Tencent of science and technology

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