Editor’s note: This article from the Babbitt information (ID:bitcoin8btc), author: Helen, the daily planet unauthorized release.
Along with the market to bear, bear the brunt of mine circle. Machine and electricity are unavoidable expenditure, they built up the walls and the cost decreasing currency price, together constitute a bureau of a life-and-death matter Tetris game, with the most intuitive and brutal way of shifting investors’ nerves.
Mine circle chiefs avatar scripts at a current situation:
Mine circle is the oldest ethnic encrypted digital currency, bitcoin together with birth, growth and development, now the past ten years, has developed into a complete ecosystem in the lower reaches of the industrial chain. If the stock market is the national economic indicator, so mine circle is the encrypted digital currency market compass.
This paper is divided into three parts, the first will be briefly reviewed under the mine ecosystem and constitute the basic logic, then in-depth analysis of the status of mine circle under the market downturn to survive, finally come to listen to the voice of mine circle chiefs, opposite the crisis with the machine, how to identify their own position, to survive the winter? Let’s find out.
Basic knowledge of 1 block chain mine ecological circle
What is the 1. mining?
For mining from the perspectives of cognition, need to look at, one is the technical level, the second is the economic level.
From a technical point of view, mining is through the hardware operation process of brute force.
The core block chain is to solve the problem of double pay, all digital currency is a mutual verification of the public accounting system, and the essence is in the mining right for accounting. By calculating the random number list under a block, when the random number with block requirements, namely the competition to account right, that is the process of mining.
From the angle of economy, mining the essence is a kind of arbitrage.
Mining is the essence of a set of arbitrage, what is good? Mining is the necessary hardware, hardware flawed production cycle, but the price is fluctuating moment. This leads to difficulty in ore and price does not match the stage, so set is the difficulty and the price difference.
What are the roles of 2. mine ecosystem?
It is because of these two dimensions are different, the former is derived and its chip industry, the effort in the iterative update of hardware, the latter focus on economic accounts, for cheaper electricity pennies. Generally speaking, there are four main roles are in mine ecosystem, chip, mine, mine, mine pool.
Is the core chip machine: machine manufacturers to design the integrated circuit of a particular algorithm, and then by the chip manufacturers in accordance with the mask design package of ASIC chip.
– machine is the necessary equipment for mining machine: ASIC chip manufacturers will be entrusted to the factory or self making packaging machine, made of foreign sales of finished products.
Mine is mine – placed place: cost drive area to low price ore miners, constantly looking for low-cost electricity and construction of new mines, scientific and fine management, to ensure the benefits of mining.
Mine is pool will be combined to obtain stable operation force: Mining revenue mechanism is to submit the miners mine pool, pool for mining income, different currencies need different ore pool.
In mine circle, and its top chip manufacturers in the food chain, the technology monopoly market; the ore mine owners pool, followed by controlling the price Hanlaobaoshou, while the miners in the seller’s market, located in the bottom of the double cost to bear the loss and high cost of hardware.
In the current market, whether the role of the situation change? After several years of development of the mine circle, now what is the situation?
Under the current situation of mining industry 2 market downturn
“The situation is still relatively easy mining circle, compared with the traditional industry in terms of input and output is relatively high, even in a bear market, the annual 30%-40% still can be guaranteed, but the increasingly fierce competition.” The founder of F2pool Cobo, co-founder of God fish said this wallet.
1, the chip and the mills
From the beginning of the CPU mining, GPU mining, the evolution of today ASIC (professional mining machine) era, 2013 years of Avalon production of the first bitcoin ASIC machine using the 110Nm technology, and we are familiar with today’s mills have evolved to 7Nm process.
Under the economic incentives of bitcoin, ore ring for the past 5 years, fast through the course of 30 years, the semiconductor industry 20 chip iteration. As the mine circle of the upstream industry, chip and ore field also eroded the whole mine circle 60%-70% profit.
The history of the development of machine we should how many have heard, not detailed here, the simple review can browse.
(source: quasi whale Research Institute)
After several years of development, and the birth of the chip mill field a number of companies, the formation of competitive pattern. These companies are listed as the representative of the following figure:
The chip and the mining machine industry has the following several major trends:
One is with the rapid development of digital encryption currency market in 2017, more and more traditional chip giant into the industry, this new ASIC professional manufacturers machine 15, the number of card machine manufacturers more, so the future there may be more and more kinds of mills.
The two is to expand the mining currency, rapid fluctuations in currency price in 2017, the industry has a greater capacity, and the new incoming chip manufacturers is difficult to compete with the giants in the bitcoin mining, then turned to the study of small currency mining chip algorithm, so its algorithm species increased significantly, from the comparison the limitations of BTC, LTC, Dash, ETH, ETN, ZEC to expand the currency SC, DCR, PASC, Mona and other dozens of dollars, in the short term, these new mills have super high yield.
The three is its intense competition between manufacturers, more intense. The manufacturers through constant iteration to calculate force machine, upgrade against competitive products, leading to its not maintain long-term high income, ore prices continued to fall, 2017 year bitcoin miner high price of 2 million yuan, and today is generally only 400 yuan price, a huge decline.
The card machine over the past two years, very moist in some currency, or even a month will be able to go back to the. But now the card currency algorithm constantly ASIC, lead to graphics machine and other living space has been eroded step by step, the value of the card machine down.
2, mine pool
As shown, pool number increasing, showing explosive growth, the competition is more and more serious. According to statistics, the number of the foreign service pool in 300+, the overall trend, general layout of multi currency pool service, single ore pool decreased gradually.
Good change is brought about by competition, mine pool service more and more transparent and humanization. In the past a long time, the miners is settled mining revenue generated, and now more and more pool, began to return, the currency theory public pool fees, revenue models and other information, guarantee the maximum benefits of the miners.
Of course, in this area, there are also many pits, false propaganda by It is often seen. word games and game data. Coin printing co-founder Zhu weight pointed out the two common mistakes: one is too high is not equal to high income, sometimes only show high, rather than an actual force, many businesses to + invalid finally force was calculated, which show the stress seems to be very high. Two is the low fees trap pool costs between 0.7%-1.5%, ignoring the cost of low fee is not reasonable, there are black box operation.
Who declined to be Name mine Lord Babbitt tells the story behind the mine.
First of all, in fact, is the excess of power resources, many parts of the country 50% units after the completion of the task of generating rationing, are not started. Although the price is by the national grid unified guidance, but in some areas there is independent of the sale of electricity rights, such as Xinjiang, Yunnan, Guizhou, some cities and counties.
This makes the business field formed two types of legal and illegal.
The so-called legal, is based on high-tech data or education is the name of the registered companies, acquisition site, building a room, through legal channels and local government to get the required industrial electricity price, and compliance payment.
The so-called illegal, is not registered in any company may, in the barren hills and the local power plant a private agreement, also known as the black field. The price will be cheaper than the market price, but not very strong stability. In theory, all the electricity can be in the national grid and southern power grid monitoring, so as to check must be shut down. And it is difficult to meet the demand of large scale mine, is also at most small 3, 4000 Taiwan ore mines secretly engage in.
Secondly, people engage in mines can be subdivided into 3 types:
It is the organization, they have a large volume of funds, to look for special maintenance, mills are their own, the power source is basically through formal channels, only possible through the relationship to get slightly lower than the market price.
The second is the middleman, mine owners can not find a suitable price will go to middlemen, brokers responsible for all the preparatory work fix, including factories and take power, specific operation of middlemen do mine, only have power more resources, make the difference in the.
The third is the mine owners, they are mainly responsible for the operation, but in fact most of mine is not mine owners, they need to be from the hands of its retail. Is the price of risk arbitrage, middlemen, mine owners, retail got are different prices, to know the difference of every penny of electricity, electricity consumption in a large volume of mine are huge expenditure. The mine owners can get the 3 hair once the price to count, for 4W of the electricity consumption per hour, a month is 8 million, a year of electricity is a million.
Of course, this is only the domestic situation, some countries overseas, due to some special reasons, even the existence of zero tariff, here will not go into details.
“3 hair 8 is generally the price, this figure has been adjusted downwards. Why electricity has been reduced? Because the miners and mine are two separate groups, the miners moved, for mine is not sell electricity loss. But the limit is 3 hair 5, less than this figure, as your own machine received a dig.” Coin printing co-founder Zhu Fa said.
3 Mining bear survival guide, need or opportunity?
Through the above, we believe that for the whole mine ecosystem has a clear understanding, then we combine the recent market, to talk about the specific impact of miners and coping strategies.
For the miners, there are now three heavy crisis, a dry season is coming, the rise in electricity costs. The two is a new generation machine. The third is the price fluctuations in the old mill did not return. God fish said several miners Chinese relatively large, the average loss in 1 million dollars this year.
One of the miners to provide data show: the expenditure model for what M3 mill, buy machine costs 2100*4900=1029W, electricity cost of 269W – L; return dug to 31.2 BTC, with 31500 of the currency price, return 255.78W; not labor costs, loss of over 10 million.
The shutdown is not possible, can only be sold on the pounds “
This is the recent ore rumors circle of a joke, the first half of the sentence is a joke, it is true that the second half of the sentence. It is understood that the old mill now because the output is electricity, has been reduced to the point where the bulk sale of 70 yuan a pound. CEO Pan Pengcheng is a mining world, advise the miners: “while there is little value, and I advise entrant miners friends quickly put the old equipment to sell, if a little late, it is not sold on the pounds, that is kg and tons.”
Cellular vehicle sales director Deng Mingyue also address him, did not sell the mill! But she also said: “in the country has to shut down the machine, M3+, T9, in fact, to some countries, the Middle East zero price, the cycle is relatively short. This is the secondary market development direction of mine this child.”
Mills sold another said the shutdown or shutdown. “When mining electricity was larger than the output, we can only choose to shut down, or to seek cheaper electricity costs, there is no doubt that this is one of the economic accounts.” God said the fish.
“The market is not understand the risk of investor education”
(source: money printing)
The figure shows is based on 0.4 yuan / kWh tariff revenue and its reference, we can see that the core problem is the price level. With the 2017 high market prices, a large number of miners passed into the rapid increase of the resources, but in the winter, how will they survive?
“The market in education do not understand the risk of investors, this round of accelerated decline has not led to more mine owners out of the market, it should be said that the future will be at least 5% of the investors bear, will fall in the circle of mine clearing risk consciousness weak investor.” COO Yu Yang said the sea mine.
“I also agree with this round of decline will cause small miners off the tide, will cause all vehicle manufacturers shipped difficult problem, but also give the industry a wake-up call. Cut chives traditional seller’s market has ended, a new round of competition will enter into what stage? How to ensure the interests of users and win-win? The war has just begun.” The panda and its co-founder Yang Xiao said.
For lower prices, this is certainly the most direct way is to reduce the cost. But in addition, there are also some economic means to avoid risks.
Mining is the essence of arbitrage, remember to use financial instruments to hedge.”
For the miners, maintain sufficient cash flow is commendable, in this case, most of the miners facing liquidity problems to pay electricity. We gradually realize that not only rely on hoard coins for the winter, hoard coins and currency speculation are gambling, because you don’t know what time the bull market will come, can take in the past. As a mature investor, we should invest in certain things, as far as possible to improve their survival rate. At present, can be used to hedge financial instruments include: a hedging tool for currency price; the second is the principal currency credit institutions; the third is to lock the purchase price is.
The founder of F2pool, said “God fish pond to realize mining is the essence of arbitrage, we need to use financial tools for exposure to become smaller. Such as the use of hedging behavior, to reduce the risk.”
Dragon pool founder Zhao Yingguang said: you can use money to loan principal currency lending institutions at the right time to sell out of money. This process does not need to raise funds to redeem, only need to pay a certain fee money lending institutions. In this way, one is to solve the liquidity of your reality; two is the best time in a period of time choose to sell the currency; the three is to avoid the passive zapan, favorable in the industry. Now there are some institutions for the operator to do hedging, such as to lock the price to buy you the next month is.”
“Bear is the golden period of mining, please enjoy this time.”
Although the currency price fell to the miners brought funds the actual problems, but the basic logic earn coins, the bull market bear market currency speculation has not changed, in fact, more ore pool are not so anxious, from their position, revealed more is facing a rare opportunity to delight.
God fish said: “I have experienced more cattle bear, is a very classic words to you,” the bear earn coins, the bull market to make money. ” We stick to the principle of the line, after a period of time that the bear at the bottom, we control the risk, it is a very good opportunity to dig, dig this round up bitcoin, enjoy this time. These days is the history of the largest bitcoin is withdrawal time, mining is actually very precious time, if we can control the cost and risk, this is bitcoin mining rare golden period.”
Bear make money, then dig what money? Bitcoin is the currency? At present, small currency gains seem more high. Letter pool operators responsible person Zhou Peng said: “dig down small currency there is some short-term benefits, but the long term, or to dig bitcoin safer.”
“The fastest 3 months will hit bottom, the latest not more than six months”
For the duration of the bear market, mine circle chiefs seem generally more optimistic, the founder of F2pool, God gives the fish pond in the first half of the expected, the sea will be mine COO Yu Yang also said that the currency fell faster than expected, but the bull market may come earlier.
Coin printing co-founder Zhu weight more optimistic, he said: “the fastest three months will hit bottom, the latest not more than six months. We can get this round of the bear market bottom. But to fully recover, reach the next round of the bull market peak, may take 2-5 years, a reference on CBBC is such a cycle. I think this is a worldwide public really come into contact with the digital currency to invest in this area, so may bear longer, cut more miserable, but if cut off in advance to the bull market. So the danger is the chance, don’t be too pessimistic.”