Produced | Odaily
Editor | Hao Fangzhou
Produced | Odaily
On the afternoon of March 2, the "Golden Era of Computing Power --- Computing Power Jingwei Cloud Summit" was officially held. The summit was co-organized by Odaily and RRMine, and gathered half of the mining industry, including mining machine manufacturers, mining farms, mining pools, miners, and financial service providers, to discuss the beauty of computing power. (Click the link to watch the exciting content）
In the third roundtable forum, three guests were invited to discuss the changes in the mining industry structure. They are:Qiu Xiaodong, business director of Spark Mining Pool, Wu Di, business director of Binance Mining Pool, and Yang Xiao, COO of Panda Miner。
When talking about financial tools, Wu Di said that Bitcoin has broken through the psychological price of many miners, but everyone is still reluctant to sell it. After Bitcoin rose above 15,000 US dollars, many miners thought that the price of the currency had reached a relatively high point and hedged; then the price of the currency went straight up, especially after reaching 20,000 US dollars, many people snapped their thighs, and then their psychology began to change. Relatively aggressive and optimistic; until 50,000 US dollars, some miners will cash out a small amount to pay future electricity bills, but maybe 80% of the assets are still retained, although 50,000 US dollars has greatly exceeded everyone’s psychological expectations. Miners' expectations for the currency price have also become higher, and many miners are still reluctant to sell at this price.
When talking about "Is now a good time to enter mining", Yang Xiao said that when entering mining, everyone mainly considers benefits and costs, both of which are inseparable from the currency price.
In terms of the market, the market is now fluctuating up and down in the mid-term, which is a slow bull. It is also a good window to mine during this period. Besides the cost, the mining machine fluctuates with the price of the currency, and it is indeed relatively high at present, but as long as the increase of the mining machine is slower than the increase of the currency price, it can be considered to start. As for future earnings, in addition to the long-term optimistic expectation of the currency price mentioned above, the limited growth of the entire network's computing power is also a favorable factor. Whether it is from Bitcoin or Ethereum, the production capacity is in a state of tightening. Let’s talk about what is good for mining. Ethereum is very fragrant, with the highest income among mainstream currencies, plus expansion and the long-term dividends of Ethereum 2.0, it is still a relatively good investment product.
In response to the “opposition to the EIP-1559 proposal”, Qiu Xiaodong, head of the business at Spark Mining Pool, said that opposition to the proposal does not mean a fork of Ethereum. He said that Spark opposed the proposal, not only for the interests of mining, but also for the evaluation of the proposal. "We feel that this proposal may not have greatly improved the flexibility of transactions, and whether it can really achieve the purpose of deflation, including such considerations."
The following is the speech record, organized by Odaily, enjoy~
Odaily: First of all, please introduce yourself.
Qiu Xiaodong:Hello everyone, I am Qiu Xiaodong, the business director of Xinghuo Mining Pool. Our mining pool is a mining pool that focuses on GPU mining. Currently, the Ethereum mining pool is our main business. We are now the largest Ethereum mining pool in the world. pool. For mining, we have some long-term cultivation and accumulation, so we can share some information with you.
Wu Di:Hello everyone, I am Wu Di, the head of business at Binance Mining Pool. We are a mining pool owned by an exchange, and our layout is more centered around the exchange ecology, including computing power coins. Binance Mining Pool has a relatively short development time and was only established in April last year. We used to be mainly engaged in BTC business, and recently opened an Ethereum mining pool. In terms of mining pool rankings, we rank third among BTC mining pools, and Ethereum is currently about eleventh.
Yang Xiao:Hello everyone, I am Yang Xiao, a panda miner. Founded in 2014, Panda Miner is the first batch of digital currency mining machines in the world. For more than six years, we have been working on the layout of the entire mining industry chain, including mines, mining machine hardware, mining services, and ecological expansion, and are currently serving the global miners. Our Niubit should be regarded as one of the oldest computing power platforms in the world. It was established in 2014. Backed by our own resources related to mines and mining machines, and relying on the operational capabilities of a strong Internet team, it is currently serving the world More than 50 countries and regions and users provide services.
Odaily: Nowadays, with the rise of currency prices and the soaring computing power, the mining difficulty of Bitcoin and Ethereum has also hit new highs one after another, and the computing power and mining machine prices have also risen sharply. I would like to ask all the guests an eternal topic, which is still suitable now Invest in mining, do mining? What stage of the bull market do you think you are in now? If you want to enter the game, which currency is more profitable?
Qiu Xiaodong:For Ethereum graphics card mining, ETH’s efforts in the second half of 2020 are very obvious, and the popularity is very high. In the past six months, I have also met many mining companies that I did not know before. They still maintain the "one card hard to find".
This has also led to many gamers hating miners very much, and even Nvidia was forced to launch graphics cards dedicated to miners, which did not exist before. Today, the computing power of the entire network has broken through a record high. The craziest time in 2017 was 192 T, and now it is 400+ T, which can be said to have doubled. But in general, the users who bought the mining machine are "really fragrant".
Although graphics cards are very expensive now, compared with the increase in currency prices, graphics cards have not risen so exaggeratedly. From July to August last year, the price of graphics cards has increased by two or three times, but the premium is not like this. There is no three-fold premium for graphics cards.
In general, graphics cards have global circulation channels, and it is necessary to truly take care of the experience of graphics card users and not really serve miners, so the increase in graphics cards is also limited.
Although the current graphics card is very expensive and hard to buy, there is also a phenomenon: the graphics card purchased in large quantities is more expensive, and it is cheaper to buy ten or twenty cards scattered here and there. This is caused by the imbalance between supply and demand. .
Assuming that you can buy a graphics card now, according to the current currency price, the payback period is about 200 days, which is quite exaggerated.
So what coin should you mine? Ethereum for sure. At present, whether it is N card or A card, Ethereum has the highest income. A few days ago, CFX mining was also good, and I also used N cards to mine.
Therefore, there are still many opportunities for graphics cards to choose from. At the same time, the graphics card is also suitable as an investment product, and the N card can mine a lot of tokens. We now add thousands of new users every day, all of whom have one or two graphics cards. Even some of my friends who play games are also learning how to use graphics cards to mine Ethereum. The market is entering a frantic phase, and we are currently under a lot of consulting pressure.
Wu Di:Regarding mining, this matter should be divided into three logics, one is whether it should be done, the other is how to do it, and the third is what to do.
First, should we do it? This problem has to be divided into two levels. One is from what angle to do it. If it is a currency standard, as Xiaodong said, the price of mining at any time must be lower than the spot price. If it is said that the cost of mining a coin is high, everyone will buy coins instead of mining.
Second, as the currency price continues to rise, is there such a risk? Of course, there are risks in doing any business. As the currency price gets lower and lower, the payback cycle gets longer and longer, leading to higher risks. For example, if I bought an S9 at the end of 2017 for 30,000 yuan, the currency price can be recovered within 3 months. The key is that the currency price has not been maintained for 3 months.
Therefore, how to avoid this risk is the key. For example, you may cover part of the cost. The payback cycle of fiat currency is determined, and the payback period will be paid after 200 days. As long as the marginal cost or production cost can cover the electricity or fixed cost, then I can continue to dig. This business must be a good business. From the perspective of the currency standard, the price of mining coins today is 37,000, and mining is 30,000, so I am making money. It cannot be said that it is impossible to obtain both the income of the currency and the income of the legal currency. Therefore, mining is a good business from any point of view, the key is how you do it.
Second, how to do it? Whether it is A-card mining or N-card mining, the biggest problem is that the difficulty of mining today is not four or eight years ago. Eight years ago, it was enough to find a house to mine. Four years ago, there were professional mines. Today, what everyone sees are conglomerates and consortiums of listed companies mining. The influence of graphics cards is not very great. The reason for the change in mining is the specialization and refinement brought about by the influx of a large amount of funds, which retail investors do not have.
Therefore, my suggestion is that everyone should think clearly about the choice of path, what kind of mines to find and what kind of people to help me do this, instead of doing it by yourself. Otherwise, your mining efficiency is 20% lower than others, and your electricity bill is 20% higher than others, adding up to 50% of the cost will be gone. Once the market turns bearish or a new machine hits the shelves, your profit margins will get thinner.
The mining business is like the college entrance examination. It is not an absolute value game, but a relative value game. You need to run faster than others. Mining means that my efficiency is higher than others, and the cost is lower than others. Even if the currency price does not change, the new mining machines will definitely make up for the original excess profits. The key is to find the right people and the right place to do the right thing. This is how to do it.
Third, what are you doing? Do we choose to mine Ethereum or Bitcoin today? The payback cycle of Bitcoin is relatively long. It is possible for a large consortium to find the right position and do sufficient research. Ethereum is now more of a graphics card mining, one, two, ten are mining, Ethereum also has a very large consortium mining, the requirements for the entire operation and maintenance are higher.
More importantly, you can see that there are a lot of uncertainties on Ethereum recently, such as new proposals and new mining machines. It is actually unclear what exactly it is. Therefore, it is recommended that you do more homework and choose a currency that is more suitable for you. After all, money belongs to you and not others.
The final conclusion is: Mining is a good business at any time, not from a different perspective. If you do it, you must find a professional. What are you doing? You must do your own research and judgment. If it is more suitable for individuals to mine Ethereum, it is more suitable for large consortiums to mine BTC.
Before anyone enters the industry, think clearly, don't just want to rush in when you see it, do a good job of research, anything can make money.
Yang Xiao:Let's talk about the market first. Although everyone has seen that the currency price has fluctuated quite a lot recently, judging from the years of mining, the current market sentiment still exists in a certain sense. Recently, many traditional investors are communicating with us about the mining industry. I think this sentiment still exists. Whether it is mining or speculation, the heat exists, and personal cognition and judgment are always on the rise.
Let’s talk about mining itself. People often say that mining in a bear market and speculation in a bull market. Mining can be selected and invested at any time node. The core is what strategy to use for mining risk control.
From the perspective of the miners themselves, slow cow mining is the most comfortable. In essence, mining is betting on one thing: the increase in the computing power of the entire network is slower than the increase in currency prices. Under this premise, relatively excess returns will be generated. Even if you think the current mining machine is at a relatively high level, as long as you add appropriate strategies appropriately, you can get excess returns no matter on the legal currency standard or the currency standard. Of course, in terms of the currency standard, the guest’s analysis just now is more thorough, which is in line with the basic logic of the miners themselves to view this matter.
Recently, many people are worried that investing in mining machines will be copied on the top of a high mountain?
In fact, the core factor of the price of the mining machine itself is two parts: one is the market situation, and the other is subject to the corresponding influence of the back-end supply chain.
For the market part, our expectations are definitely preferred, but the market itself cannot be completely predicted for everyone. In terms of production capacity, the production capacity of graphics cards is in a very tight state. Regardless of TSMC or Samsung, the production capacity left for the digital currency mining industry is actually very limited. At present, most of the goods on the market have been sold until October, and the very exaggerated forward futures are also subject to the influence of comprehensive attributes such as production capacity, which is also the impact of normal supply and demand changes in the market.
From the point of view of the payback cycle, Ethereum has gone from one and a half to two years last year to about 200 days now, and the payback cycle of Bitcoin has fluctuated in the range of about 300 days. This income is very attractive. I believe that the mine will also find ways to increase more production capacity. So I think around Q3, there will be more and more corresponding goods. Of course, the market game between buyers and sellers will be asynchronous in a certain sense with the rise and fall of the market.
What currency should I mine now? We think that Ethereum is very good. The current payback period is the highest among mainstream currencies, and the overall dividend is relatively strong, including a series of comprehensive expected benefits for Ethereum this year. Although it will have a certain risk impact on the long-term POW, it is still a better investment method for the choice of continuing mining and hoarding coins.
Bitcoin is a more mature track, more institutional. Judging from the situation we have come into contact with, the proportion of institutional investors in the cooperation of relevant mines will increase, and the proportion of traditional institutional investors will increase. This is also a market trend.
In addition to Bitcoin and Ethereum, some small currencies are also worthy of attention. Although the current market feedback, such as the high level of gas, has resulted in a very high overall cost of mining, we can also see the introduction of some new technical means recently based on the promotion of the community and miners , including the advancement of some proposals. In addition, the current overall income of Filecoin is still rising, and it is in a certain expected situation.
For these potential other mining projects, more attention can also be maintained. Just now Xiaodong also mentioned that graphics cards are also suitable for small currency mining, which is also the wealth code for mining in the current market.
Odaily: Distinguished guests also have a lot of contact with miners. I want to know, what is the current research and judgment of the miners group on the market? What actions have you taken?
Qiu Xiaodong:The time period for this wave of Ethereum’s rise is actually quite short. During the DeFi frenzy last year, when the price of ETH rose to 400-500 US dollars, many large customer miners carried out hedging operations. Judging from the time period, it must be set early. Some people even wanted to sell the mining machine at that time, because the premium of the mining machine was extremely exaggerated at that time. Including myself, I have also suffered losses in locking in profits.
The current mood of the miners is: no hedging in a bear market, mining and selling in a bull market. Moreover, more and more miners have begun to know how to use some mature tools for hedging. The previous logic was to carry out simple operations by themselves, and miners are not very good at researching financial products; now some people will go to CeFi to borrow currency to hedge, and some people will use DeFi protocol for hedging. These changes are mainly due to the improvement and integration of the Ethereum ecosystem.
Generally speaking, there is not much hedging at present, and there is very little demand for hedging.
Wu Di:The data I got here is not the same. There are more financial services in Binance, and it shows periodic changes.
When the price of BTC reaches 15,000 USD, there is more demand for hedging, and many miners may sell their machines or coins to buy new machines, which will reach a peak at that time; when BTC is 20,000 to 25,000 USD, everyone feels that the market is coming At that time, there was no hedging, and the miners who had already been covered at this time snapped their thighs; when the BTC rose to 30,000 to 40,000 US dollars, the original hedgers resigned; when the BTC rose to 50,000, it was already higher than the psychology of many miners. As for the price, many practitioners who came in from the last bull-bear cycle also believe that 50,000 is a phased high. Therefore, when many miners come to this position, they start to carry out partial hedging, and lock in the electricity bill for the next year in advance, at least for a period of time in the future, they will be stable. After solving the basic needs, the remaining 85% of the income will not move.
Yang Xiao:The data situation mentioned by Mr. Wu just now is similar to our own implementation.
We didn’t have hedging expectations at the beginning, but later we learned the relevant strategies and started hedging, but ended up at a low position and desperately slapped our thighs. In fact, I think that as long as you reach your own psychological price, you can moderately do partial hedging. I am talking about this point of view with some big and small miners around me: in the current mining, we must learn to use financial tools (loans, etc.) to lock in certain interests in our assets in advance.
As for where to choose to add leverage and do hedging, it depends on your prediction of the market, and no one can help you with this matter. Be it DeFi or CeFi, financial tools can only provide you with project choices, but you still need to make your own judgment on the specific market position. Don't just hoard coins like before and don't operate. In addition, after making a market judgment, you should also be responsible for your own choices.
Odaily: This year, the computing power product family has added a very high-profile and important member - computing power currency. Binance launched BTCST, and Biyin issued pBTC35A. As far as we know, some other mining pools will also issue BHP. Distinguished guests, what are the prospects for the development of computing power tokenization? Can it break the "black box" of the mining industry? Is it worth the investment?
Qiu Xiaodong:Spark Mining Pool currently has no plan to issue hashrate coins, but we are also paying attention to the development of this new thing.
At the end of last year, many people talked to Xinghuo about Bashcoin, and also explained that the combination of it and DeFi can produce some new ways of playing. We believe that hashpower coins, especially hashpower coins based on Ethereum, have decentralized code auditing and publicity, which is a very "sexy" thing; moving decentralized cloud computing power to the chain, investors can Use the way of buying coins to experience the feelings of miners holding coins,
Of course, Bashcoin has certain risks. For our team, the compliance of currency issuance is the first consideration, and the stability of computing power should also be considered. After so many years of mining, I personally think that there is no 100% stable mine, whether it is electricity or various safety accidents. Therefore, how to achieve stable and continuous payment of income for Hashcoin is a big problem.
In addition, users may have less understanding of the stable income distribution of mining. Everyone doesn't know why the income is high today and low tomorrow, and what is the lucky value.
These issues and risks must be considered by Spark, so we are more cautious and have no plans to issue computing power coins for the time being.
However, we have also seen computing power coins made by some friends, and we think they are quite "sexy". In particular, the Bitcoin computing power made by Biyin, and cooperation with some DeFi pools to join liquidity mining, we think it is quite fun. However, the current HashCoin premium is a bit too high, and it will return to the real income in the end.
Wu Di:First of all, let me state that BTCST is an asset listed on Binance. As a platform, Binance only provides services to break through the barriers between assets and users. We provide customers with a choice. If other partners including Xinghuo have ideas in this regard, welcome to come to us.
Mining is essentially a system that continuously rewards miners to maintain system security. Almost all currencies have this mechanism, because third parties cannot be trusted, only third parties can be encouraged to provide this service. Because of this incentive, we have to compete for this incentive in a way. Competition is profitable, which is the essence of mining.
Unless the handling fee is fully sufficient to maintain self-operation, the system's additional issuance will not stop. I think Ethereum has gone a long way in this direction. Other currencies have not seen the handling fee enough to support the automatic operation of the system. I think Ethereum is currently doing the best.
Mining is actually an investment from funds to assets. Whether it is capital or personal mining, it is nothing more than giving money to one thing, turning it into another asset and transferring it out. It is very difficult for individuals to mine Bitcoin now, at least they must endure enough failures before they can succeed.
How to standardize it? The standardization of an industry is an important way to determine whether the industry can go further. The standardization of cloud computing power has been done well before, but the mass base and channel foundation for cloud computing power in the past were not strong enough, so it is more of a To B business. Relying on contacts in twos and threes, it is difficult to make a business successful.
It can be said that HashCoin has taken another step forward on the basis of cloud computing power. Hashpower Coin is open and transparent, and clearly tells users that I want to earn a premium; as for whether users are willing to admit to bargaining, it is the user's problem; a better premium means that better assets and products need to be provided .
Of course, how to find more people, provide liquidity and obtain a liquidity premium is not what the mining circle is best at, but what exchanges are best at, so Binance is promoting the standardization process of the mining industry.
We still want to emphasize that BTCST is not owned by Binance, and Binance will not issue any computing currency. We welcome everyone to come to us for cooperation, as long as it is suitable, as long as it can bring more value to our users. Our task is to improve liquidity through our more standardized services and a better liquidity platform, so that more people and resources can enter the mining industry.
Yang Xiao:In fact, there were already some old hashrate coins on the market before, and our attitude towards this is similar to that of Spark, which is relatively conservative.
Many people are optimistic about Bashcoin, and they are more concerned about the speculative nature of the currency itself, but they don’t pay much attention to the value attribute of the entity behind it. We believe that BHP has the following characteristics:
One is to lower the overall threshold for mining participation. For ordinary users, it is indeed increasingly difficult to participate in mining at present, but if they can participate in mining more effectively through the way of Token, it will have a positive effect on the entire mining industry.
Second, the liquidity of HashCoin is relatively good. Although traditional mining machines and cloud computing power have certain liquidity, they are definitely not as simple as Token. After all, the buying and selling of coins is smoother.
However, corresponding to liquidity, it also increases speculation and risk, which also leads to the relatively high premium of the current Hashcoin. In addition, mining is relatively compliant in the entire encryption industry, which is also the difference between mining and speculation. From this perspective, although BHP increases liquidity, it also limits the compliance and stability of mining itself, so a trade-off is required.
In addition, Bashcoin has a weak ability to resist risks. At present, there are more products with high power consumption in the current HashCoin, coupled with the high premium, the ability to resist risks is relatively poor. In the current market situation, the comprehensive income of Hashpower Coin is not bad; but when the currency price falls, the potential risks will increase.
We are also looking forward to the combination of Hashpower Coin and DeFi to produce some new ways to make the income more considerable. If Hashpower Coin only lowers the threshold for everyone to participate and enhances liquidity, then these needs can be moderately met in the dimension of cloud computing power.
For example, now the cloud computing power platform has also opened up small-amount fiat currency payments and corresponding channels to meet the relevant attributes of low threshold; in terms of liquidity, we have also opened the corresponding computing power trading module; When the high-power consumption machine shuts down and no longer benefits, we also take the initiative to help users replace it with lower power consumption computing power to help users further reduce the risk of investment.
Odaily: Recently, Ethereum put forward the EIP-1559 proposal, advocating the reduction of Gas Base Fee, which may affect the income of miners. Several mining pools also showed their attitudes. What do you guys think of the EIP-1559 proposal?
Qiu Xiaodong:Spark Mining Pool is definitely against it. We have also written a lot of articles to analyze the problem of EIP-1559, but it has not improved the elasticity of the network, especially the founder of Filecoin also mentioned this problem during the live broadcast. We now have a relatively large number of users, so we are also speaking on behalf of miners.
Perhaps the current ecology of Ethereum is achieved by developers and users, and it is a chain where ecology is king, but the voice of miners cannot be ignored.
Of course, our opposition does not mean that Ethereum needs to be forked. This is too conspiracy theory. We will not take the lead in doing this kind of thing, it is thankless, and it is unnecessary to cause community division. We are just expressing our concerns about network security and the whole thing, speaking on behalf of the community ecology, nothing more.
Wu Di:In our opinion, whether it is a proposal or a variety of methods, we will still listen to the voice of the community. Because we are not just a mining pool, we are an exchange with a large number of currency holders, and many DeFi projects also have very deep applications here. On the EIP-1559 proposal, Binance does not have a lot of positions, and we want to hear the voices of all parties on this issue.
Personally, I feel that the current discussion in the community is not enough. When the community discusses more fully, everyone will definitely know which thing is more correct, or which point in time is more correct.
Yang Xiao:EIP-1559 is essentially a matter of "the ass determines the head". Everyone starts from the perspective of their own interests, and the understanding of the protocol itself is not deep enough. The Ethereum community has posted a large number of articles, and I suggest that you read them in more detail, instead of following everyone's current single-understanding perspective. Everyone needs to truly understand what problems the agreement can solve, whether it can really be solved, and what the logic behind it is, and then form some judgments.
I think everyone should look at the EIP-1559 protocol more rationally. The current view in the market is that it can greatly reduce the gas fee, so many people support and promote it. However, the EIP-1559 protocol does not really reduce the Gas fee, but controls the excessively high Gas fee. Spark has been providing corresponding tools, and I think it can solve the problem in disguise. Therefore, blindly promoting these proposals is not a good thing for the future development of Ethereum's comprehensive ecology.
My point of view is similar to that of Xiaodong, the miners themselves need to speak out. Although the Ethereum ecology is more supported by developers and users, since miners are a part of the ecology, we also need to express our attitude instead of blindly accepting it. In this case, the meaning of decentralization of the blockchain itself is lost.
