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1 Getting to know Bitcoin starts with understanding blockchain technology
Song Jiaji's second lecture started from the development cycle of the blockchain technology industry. In 2008, the Bitcoin "White Paper" "Bitcoin A Peer-to-Peer Electronic Information System" paper was published, and the blockchain moved from theory to practice. Ten years later, the Department of Informatization and Software Services of the Ministry of Industry and Information Technology of China directed the China Institute of Electronics Standardization to publish the "White Paper on the Application and Development of Blockchain Technology in China" to standardize blockchain technology.
Song Jiaji introduced that the Bitcoin white paper focuses on defining three points, the first is distributed storage, the second is community-oriented consensus mechanism, and the third is based on encryption algorithms.
The innovation of Bitcoin, based on the payment software of the banking system, is helpful for financial control, but there are problems such as increased transaction costs, restrictions on small transactions, restrictions on Internet trade, and excessive requests for personal information of customers. The payment and settlement of Bitcoin does not rely on third-party credit intermediaries such as financial institutions, and realizes point-to-point electronic cash transactions.
On 1024, 2019, the collective study of the Political Bureau of the Central Committee of the Communist Party of China on the blockchain field set off an upsurge of domestic attention to blockchain applications. Today, blockchain technology iterations such as cross-chain and sharding have pushed digital currency to a new dimension. At the same time, applications represented by DeFi have sprung up and gathered popularity in the market. From another perspective, whether in the financial field or in the direction of new infrastructure, the technical advantages and main directions of blockchain are becoming increasingly clear.
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2 Break through the fog of technology and interpret the mining ecology
Song Jiaji explained the working principle of transfer and mining in detail with the bitcoin payment scenario. As follows: A wants to pay B one dollar, and in the traditional banking system, the bookkeeping is done by the bank. In the blockchain solution, the process of transferring one dollar from A to B is shown to the entire network, and potential third parties—the miners of the entire network—complete the authentication and bookkeeping tasks.
In short, when a transaction occurs between A and B, miners invest in mining machines and electricity fees to compete for bookkeeping rights to obtain system rewards, that is, mining, and the "mine" for mining is Bitcoin.
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3 Mining machines, mining farms, mining pools, and cloud computing power build an industrial ecosystem
Song Jiaji said that mining already has a clear industrial chain, forming an independent ecosystem to complete the ecology and services of Bitcoin.
The ecosystem is roughly divided into several categories. The first category is mining machine manufacturers who are participants in the industry, the second category is called mining farms, and the third category is called mining pools. Some mining pools have evolved into cloud computing power platforms.
The mining machine manufacturer itself is a chip factory, which produces and designs chips for mining machines and assembles them into machines and equipment to sell to miners. The process of selling mining machines is understood as transferring computing power to miners, and miners pay legal currency cash to mining machine manufacturers, forming a traditional product sales behavior. After the miners get the machines, they are hosted in hydropower and thermal power to obtain relatively cheap mines.
The industrial chain of mining is generally carried out among the three. With the development of the industry, the cloud computing power platform has joined to help miners withdraw funds and meet the needs of cloud computing power investors.
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4 The poor "coin" is now, counter-cyclical gold digging
In any business, there are income and costs. So what are the revenue and costs of Bitcoin mining?
Song Jiaji introduced that from the perspective of revenue, Bitcoin mining revenue = total network computing power * proportion of miners' computing power * currency price - mining machine power consumption * electricity bill. Since the mining difficulty of the entire Bitcoin network (affecting unit mining income) and currency prices are the same for all miners, the mining income of a miner is only related to the computing power of its mining machine. The greater the computing power, the greater the mining power. The more benefits you get. The main factors affecting the mining cost are the power consumption and electricity bill of the mining machine. The energy consumption ratio (W/T) of the mining machine is the key indicator. The mining machine with the same computing power has the same mining income, but the energy consumption is smaller than that of the mining machine, and the electricity bill is less, that is, the mining income is theoretically higher.
The cost side is divided into two parts: fixed investment and operating investment. Investors buying mining machines is equivalent to establishing a bullish option on Bitcoin at a certain point in time. Why is it called a bullish option? Because if you are optimistic about the currency price when buying a mining machine, if you are not optimistic, you will not buy it. Investors purchase at a certain price is equivalent to a one-time investment, that is, fixed asset investment. The electricity fee, operation and maintenance, depreciation and amortization during the investment period constitute the operating cost.
The electricity used for mining is mainly hydropower and thermal power. The high water season brings relatively cheap hydropower, and most of the hydropower is distributed in Yunnan, Guizhou and Sichuan. Based on the principle that the lower the electricity price, the higher the income, the phenomenon of migratory birds of miners has been born.
China's three major bitcoin mining machine manufacturers lead the world, where does the manufacturer's profit come from? How are mining machines priced?
Subject to currency prices, the financial attributes of mining machines are longer than those of electronic products. From the perspective of cash return, mining machines are priced according to the return cycle, which is a capital product, not a consumer product. The profitability of mining machine manufacturers is also closely related to currency prices.
and does not constitute investment advice
The opinions contained in the article represent only the author's own
and does not constitute investment advice
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