Editor | Hao Fangzhou
Editor | Hao Fangzhou
Produced | Odaily (ID: o-daily)
This year's recovery in currency prices has brought about a new round of "recharge of faith", and some investors' interest in Bitcoin has shifted from buying to more source mining. Mining itself can be seen as exchanging bitcoins at a price lower than the market currency price every 10 minutes by investing in hardware and electricity. Therefore, if you are optimistic about Bitcoin in the long run, the best way to collect coins is mining rather than buying coins.
Nowadays, as Bitcoin mining becomes more and more mature, the threshold for purchasing and operating mining machines and finding low electricity prices is also getting higher and higher. The rise of the cloud computing power platform has made the mining industry structure gradually transition from the monopoly of large mines to the mining of the whole people. For ordinary investors, purchasing cloud computing power contract products (rental computing power) is a low-cost, low-threshold mining method. Investors can regularly receive mined bitcoins, which is more stable than buying coins . At the same time, mine owners rent out computing power to obtain cash flow in advance and disperse risks to achieve a win-win situation.
This article will explain the advantages and disadvantages of Bitcoin cloud computing power mining compared with traditional mining, sort out the industry structure of cloud computing power mining, evaluate mainstream platform products, and use new platformsEasy to castTable of contents:
Table of contents:
1. What is cloud mining
2. Comparison of advantages and disadvantages between cloud computing power and traditional mining
3. Cloud computing power mining market structure
1. Market size
2. Models and Cases
3. Product evaluation
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1. What is cloud mining
The usual steps of Bitcoin mining are "purchase mining machine - deploy mining machine - set up mining - obtain income", but the step of deploying mining machine is affected by many factors, such as electricity price, site, temperature, noise, operation and maintenance, etc. These thresholds require certain conditions and knowledge to eliminate, thus giving birth to a sub-module under the mining industry - cloud computing power.
Cloud computing power is a remote mining mode. Users purchase cloud computing power contracts through the platform, lease computing power for mining, and obtain regular income. The advantage of cloud mining is that users do not need to have an in-depth understanding of mining principles and various hardware and software, or purchase expensive mining machines, and do not need to maintain 24 hours by themselves. They can participate in mining as long as they place an order, similar to purchasing income rights products.
We believe that cloud computing power is the P2P of computing power, and the platform side connects the income rights (assets) of mining machines and individual investors (funds). Therefore, when choosing a cloud computing platform, pay attention to the following three points:
The computing power side needs to be supported by real mining machines and mine farms. The platform generally discloses relevant information.
Whether the electricity behind the computing power is cheap and stable. we already knowElectricity price is the core variable of mining cost, Computing power is also considered to be a digital product converted from electrical energy, so stable and cheap electricity prices can support high-quality computing power.
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2. Comparison of advantages and disadvantages between cloud computing power and traditional mining
For investors, the cloud computing power contract has the following advantages:
There is no need to purchase mining machines, the initial investment is small, and the threshold is low.
There is no need to bear additional risks such as mining machine failure and performance loss, or to invest in post-maintenance costs, and the investment stability is high.
After the contract ends, there is no need to deal with machines, venues, etc., making exit more flexible.
For mine owners, renting and selling the right to use computing power for a period of time to customers at a price slightly lower than the self-operated mining income can quickly return cash, pre-purchase the latest mining machines, expand production scale, and strive for long-term The possibility of making profits in the market can also to some extent retain mining machines at low currency prices, transfer risks, and hedge against the single risk of mining self-operated business.
However, compared with directly participating in mining, cloud computing power also shows the following disadvantages:
Even if the platform fully displays relevant information such as mines, mining machines, cooperation, and teams, it is still difficult for users to judge the quality of computing power behind the platform, real-time operating conditions (such as whether there is a power outage, site inspection) or real revenue data.
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3. Cloud computing power mining market structure
1. Market size
Cloud computing power was born in 2014. On September 1, 2014, Bitmain’s Hashrate Nest was launched, and Sweden’s KnCCloud was launched on September 2. In the same year, foreign companies such as Genesis-Mining, NiceHash, and cex.io, domestic Huobi.com’s digcoin, and Bitcoin International also appeared. Its computing power bar, Hash Cloud under HashRatio, a mining machine manufacturer, and ZeusHash, a subsidiary of LTC mining machine manufacturer Zeus.
Later, with the downturn in currency prices, cloud computing power fell silent for three years. After 2017, platforms such as Hashpower Cloud, Interstellar Rubik’s Cube, Bit Power, Hash.Pro, BitDeer, and Renren Mine emerged. Cloud computing power, with its low threshold and more flexible features, opened the era of mining for all.
At present, there are more than 50 cloud computing power platforms in the world, of which there are less than 10 mainstream platforms, such as GenesisMining, Bit Deer, Koala Mine, Mine Cloud, Niubit, RHY (cloud computing power), Suancube, KGfire , Nicehash, etc.The cloud computing power market share of these nine major platforms has reached more than 80%, basically representing the entire industry.
From the perspective of business structure, the business models of these platforms are basically the same. Cloud computing power leasing, mining machine leasing, and mining machine hosting are the main businesses, with mining machine sales attached.
2. Models and Cases
According to the operation mode, cloud computing power platforms are divided into self-owned computing power (B2C) and platform type (C2C): the former builds or invests in mines and sells computing power directly; the latter builds a computing power trading platform and cooperates on behalf of mines Selling computing power to other parties can be regarded as a channel provider of computing power.
3. Product evaluation
From the user's point of view, the purchase of cloud computing power services usually involves two expenses: one is the computing power fee, which is equivalent to the rent of the computing power (mining machine); the other is the hosting fee and electricity fee to maintain the normal production of the mining machine. Some platforms (such as Suyitou, etc.) will directly combine these two fees into the price of the computing power contract.
The rate of return that investors are more concerned about can be subdivided into 1T/day dynamic return, which can also be represented by the total return (input principal * daily average return rate) within the contract period of the product.
The formula for calculating the rate of return is:
Yield = (X*YZ) / Z
Among them, X represents the number of bitcoins produced by 1T/day, Y represents the average price of Bitcoin on that day, and Z represents the comprehensive input cost of purchasing 1T/day (computing power fee, electricity fee, management fee, etc.). X can be directly obtained according to the BTC.com website, as shown in the figure below:
Below, we compared the one-year product static yields of mainstream platforms (August 23, 2019):
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4. Opportunities and risks of cloud mining
The risk of speculating on Bitcoin (short-term trading to earn price difference) is higher than hoarding Bitcoin (long-term bullish), but most hoarders often lack judgment on short-term price changes and "get off the car early". Cloud computing power brings investors a small amount of Bitcoin income every day, and it is also controlling investors' "frequent operations" in disguise.Therefore, for Bitcoin "believers", we give a suggestion that "speculating coins is worse than hoarding coins, and buying coins is worse than buying computing power".
The market opportunity of cloud computing power is that it provides individuals with a more "neutral" investment method, the threshold is lower than self-built mines, the risk is lower than short-term operations, and the cost is lower than market price purchase; it also allows mines to share costs and risks, Get better cash flow.
As mentioned above, the main risk of cloud computing power lies in the authenticity and stability of the computing power behind the contract. In our long-term contact with the mining industry, the high-frequency words we hear are "pit": reasons for power outages beyond common sense, various episodes during the transportation of mining machines, constant interference from viruses and blackmail, futures fluctuations and late arrivals. Spot goods, barriers to cross-border trade, and unpredictable team ghosts... Therefore, there is a certain scarcity of real and stable computing power, often behind many years of experience in pitfalls. As an information intermediary, how does the cloud computing power platform help users select high-quality cooperative mining farms, design friendly and attractive products, formulate professional and transparent industry standards, establish disaster recovery plans to deal with various risks, and provide solutions throughout the entire investment process? High-quality services will become its core competitiveness.
Cloud computing power platform for Odaily strategic incubationEasy to castThe first phase of products will be launched on August 30, 2019. Sueyitou fully adjusts the machine status, site and power conditions, team personnel background, and business compliance of the mine, and strictly controls the risk; the user interface is designed with the thinking and standards of Internet products to minimize the user's learning and use thresholds; share user-side risks with partners to ensure that even short-term power outages will not affect daily income. At the same time, Suyi Investment and the investment and financing platformMinIPOReach in-depth cooperation on legal affairs, tax compliance and other aspects, inform risks in advance, and do a good job of identity authentication; and use Odaily's media resources in the mining circle to keep up with the latest developments in the industry in a timely manner and provide more valuable information services for mining circle investors.
I'm Odaily Little Parker, looking for reports on high-quality blockchain projects, you can add WeChat lmm662381, please note the company + name + reason. For reprint/content cooperation, please email report@odaily.com.
I'm Odaily Little Parker, looking for reports on high-quality blockchain projects, you can add WeChat lmm662381, please note the company + name + reason. For reprint/content cooperation, please email report@odaily.com.
