On March 2, the "Golden Era of Computing Power --- Computing Power Jingwei Cloud Summit" officially opened.
In the first round table forum session,Chen Lei, Founder of BitBlue Whale, He Heng, Deputy Sales Director of Whatsminer, Qing Qing, CMO of F2Pool, Oda, POW+ of OKEx Mining PoolIn-depth discussions on "Bitcoin enters the mainstream, mining capitalization",
Is listing the "end" for mining companies? Has the competitive landscape of the mining industry become relatively static? Is it suitable to enter Ethereum mining now? How will the guests answer, Odaily sorted out the essence of this roundtable forum, and the answers to the questions will be revealed for you in turn below.
Hao Fangzhou (host of the round table):Hello everyone, I am the editor-in-chief Hao Fangzhou. Welcome to the "Golden Age of Computing Power Cloud Summit". The theme will talk about some macro topics such as industry trends and capital operations. We are honored to invite Chen Lei, the founder of BitBlue Whale, He Heng, the deputy sales director of Whatsminer, F2PoolCMO Qingqing, and OKEx mining pool POW+ Xiaotian. Please greet the audience first and give a brief self-introduction.
Chen Lei:Thank you for the host, thank you for the invitation, I am Chen Lei, the founder of BitBlue Whale. BitBlue Whale is an early mining service team in China. It mainly serves listed companies, capital parties, domestic leading mining machine manufacturers and about a dozen cloud computing power platforms. We mainly do mining services behind their backs. With the support of the facilities at the core of the market, we will provide some services required by customers, such as mining machines and transactions, up or down at the same time.
He Heng:Hello everyone, thank you very much for the host Fang Zhou, and thank you for the invitation. My name is He Heng, and I am the current deputy sales director of Shenma Mining Machinery. I am mainly responsible for the domestic mining machine sales business. Whatsminer was established in 2016. Well-known products include Shenma M3, M20, and M10, including the M30 and M31 series, which are hard to find now. They are all our mainstream products. Now our total global sales of mining machines are It is close to 1 million units. This is a phased breakthrough for us. In the future, there will be more and better products for everyone. There will be more topics to chat with you in a while. I will introduce them here first, thank you Everyone.
Green:Hello everyone, Odaily friends, long time no see, the last time was at our FAT awards ceremony. This time I am mainly here to talk to you about the new trends and trends of the mining industry in 2021. I come from F2Pool. F2Pool was founded in 2013. It is the earliest digital currency mining pool in China. At present, our Bitcoin mining pool’s computing power ranks No. 1 in the world. First, we have dug up the most Bitcoin blocks in the world. In addition to the familiar Bitcoin, Litecoin, and Ethereum, we currently support the mining of more than 40 new currencies. We will continue to provide security for miners around the world. , Stable, and high-yield mining services, welcome everyone to join F2Pool for digital currency mining.
Oda:secondary title
Q1
Hao Fangzhou (host of the round table):Thank you for your introduction, I would like to share some news with you first. Last week, Hive Blockchain, a listed mining company in Canada, acquired two bitcoin mining facilities, including a 50 megawatt data center; Argo, a listed mining company in the UK, acquired 4,500 mining machines and has recently put them into operation; Over there, Northern Data plans to conduct another IPO in the United States and carry out dual listing; further news, 500.com, a listed company in the US stock market, has recently fully acquired the mining pool business of BTC.com. We can see that this year listed companies are very actively buying mining machines for mining, or deploying the encryption market through mergers and acquisitions. Mining companies are also actively stocking up for listing and embracing the traditional secondary market. The mining industry seems to have become a traditional financial industry. The connection point with digital finance. The first question I would like to ask all guests, is landing in the traditional capital market the only "end" for mining companies? On the way to the securities secondary market, is there a real amount of compliance and process costs paid, and what are the difficulties? Which mining circle businesses are suitable for taking the traditional capital route?
Chen Lei:Thank you, host. Since the second half of last year, institutions have been entering the market one after another. They have spent quite a lot of money. In addition to directly buying bitcoins, they have also bought a lot of mining machines. Now about 70% of the mining machines are bought by overseas capital. I mentioned in 2018 that with the advancement of semiconductor manufacturing processes, the mining industry will become more concentrated, professional, and large-scale, and eventually more institutionalized. This is what we are doing this time. The trends seen in the bull market are now played by institutions.
Institutionalization has two major benefits for the industry. One is that the scale of the institution is larger, so there is still a lot of room for imagination as to how high the bull market will be pushed this time; It is not so easy to get out quickly from the perspective of their action strength, scale and compliance costs. So I think the admission of institutions is good for the whole industry.
Hao Fangzhou (host of the round table): Mr. Chen told us about the institutionalization trend of the mining industry. Next, what does Mr. He think of this issue?
He Heng:Let me answer the first question first - "Is landing in the capital market the end of mining companies?" I think this is definitely not the end, and there is no end for mining companies. The purpose of landing in the traditional capital market is to make the company more formal, Scale is recognized by the entire capital market, and it is also a reward for the support of customers, shareholders and all partners. As a technology enterprise, mining enterprises must take this technology as the first element and put technological innovation first. From this perspective, enterprises only have a direction and no end point. Only by doing so can enterprises better adapt to the changing environment In the future, whether it is entering the market, promoting sales, or competing with competing products, technology must be the core element.
Regarding the difficulties of landing in the secondary market, many difficulties actually come from policies. For the mining companies themselves, it is difficult to effectively solve this problem in the short term. What we can do is to continuously iterate and update our technology and financial processes. U.S. stocks have the listing review of U.S. stocks, and A-shares have the listing review of A-shares. What we have to do is to iterate our own rhythm and cost according to the requirements. This matter requires long-term investment.
As for what other businesses in the mining circle can enter the traditional capital market. After more than ten years of development, the mining circle has formed a very large industrial chain, and its business includes physical mining machines, cloud computing power, mines and so on. The mine is actually a very large infrastructure, and it can also be used as an investment target. Originally, the mine is an entity with real value. It can also calculate the cost and income well in the audit, which is more convenient from the perspective of listing. . In addition, the mining machine leasing business also has the opportunity to land in the traditional capital market, and some financial derivatives, including mining loans, mortgages, capital allocation and other related businesses, can all be made in the direction of landing in the traditional capital market.
Hao Fangzhou (host of the round table): Thanks to Mr. He, Mr. He mentioned that mining machine leasing and financial direction can be done in the direction of the traditional capital market. I would like to ask Qingqing, is there any precedent for the mining pool to go public? What do you think of landing in the traditional capital market?
Green:I thought of a metaphor, is going public like we have a diploma, this is actually free to choose, it is definitely not the final path, getting a diploma is for better jobs and better development, and going public is also financing, It is to have more funds and better cash flow, so that enterprises have stronger development momentum and greater development space, which is a choice of a virtuous circle.
For mining pools, a recent example is the transaction between BTC.com and 500.com, which is equivalent to seeking listing through a VAM agreement. For mining companies, the difficulty of landing in the traditional capital market lies in the disclosure of their profitability and assets, which will ultimately determine their market value. Are these conditions for mining companies enough to compete with existing companies in the market? Why can you be listed first among many companies and enterprises, or be recognized by investors? Can these conditions be publicly and compliantly displayed to future investors? These things are more difficult.
Going back to the trend mentioned by Mr. Chen just now, the mining industry is gradually developing towards institutionalization. At present, the unit price of Shenma’s new machines is more than 60,000 yuan. For retail or individual investors, it takes a lot of money to buy mining machines in batches. The threshold is still rising. The arms race in the mining industry has actually become a trend invisibly. Just like the large holders of Bitcoin, they are changing from retail investors to medium-sized investors and then to institutions. The mainstream people who hold Bitcoin and the mainstream of mining The characters have all transformed, and they are all transforming into institutions.
Of course, this is definitely a positive, indicating that the industry is attracting more and more attention from investors in traditional fields. Let’s go back to our question—do mining companies have to go public? Again, it depends on the choice of the company.
Hao Fangzhou (host of the round table): I especially like Qingqing's metaphor about the relationship between ringing a bell and a diploma. Indeed, there are many paths to choose from, whether for individuals or businesses. We can see that the overall macro environment is still positive, including the trend of globalization and institutionalization. Finally, Mr. Tian will sum up.
Oda:The focus of this question is how we treat compliant mining companies and compliant traditional capital, which is the same as we talked about Internet companies 20 years ago. Broadly speaking, Internet companies refer to companies that provide services based on computer network technology and use network platforms to obtain income. Therefore, from this point of view, the so-called mining companies are based on computer encryption network technology. Encrypted network platforms provide services and thus obtain income. The path taken by most enterprises is the only way for the development of most enterprises. The next generation of development direction is the beginning of the popularization of blockchain Internet.
secondary title
Q2
Hao Fangzhou (host of the round table):Thank you, Mr. Tian. We all know that the production capacity of mining machines has entered a bottleneck period since last year. The supply is in short supply. Are newcomers coming in? If the competitive landscape of the mining industry is relatively static, do you agree with it?
Oda:The so-called bottleneck period is nothing but self-increasing. Let’s continue with the previous topic. This is the confusion before we entered the big circle from a small circle. If the industry is not standardized, let it be regulated. In fact, pains and opportunities coexist. As for what stage the market is in, I think it is currently in the stage of embracing more people and more capital. Looking at the broader world, who thinks that now is not the time to enter the market? Just like Nokia back then, everyone has the opportunity to enter this market, and there is no bottleneck period.
Hao Fangzhou (host of the round table): Mr. Tian’s summary of this industry is relatively open. At present, the market is in a stage of gaining momentum, with both pains and opportunities. What does Qingqing think about this problem?
Green:I think this problem should be divided into two parts. If it is newcomers and retail investors, it is difficult to participate now; People in the industry already have some resources and have their own judgments about the industry. In fact, there is no bottleneck period.
For newcomers or retail investors, if they want to participate in mining this year, the only choice may be cloud computing power. I also mentioned just now that the current official price of a new machine is more than 60,000 per unit. It is difficult for retail investors to buy several machines at once, and retail investors can only buy them in the hands of agents or secondary distributors. The quantity is very small, and the price may be higher than the official selling price, followed by a series of fees such as hosting, mine operation and maintenance, which invisibly increases the difficulty for retail investors. So for newcomers, since it is difficult to buy high-performance mining machines this year, my suggestion is to participate in cloud computing power mining, which may have a small burst this year. For newcomers, cloud computing power is very much like an advanced model of Internet products, and can also get a return on investment of 20%-50%.
For those who have been in the industry for several years like us, they will have some advantages in mine resources, mining machine resources, including the bargaining power method of purchase. In the bull market, whoever can buy and get high-performance machines earlier will have more advantages in the track at this stage. In addition, during the course of the bull market, we may not care much about electricity bills or detailed prices. This year, the overall situation is more obvious. There is basically no miner who does not want to increase production capacity. The demand is greater than the supply. Everyone must be in a state of scrambling for machines.
Hao Fangzhou (host of the round table): Qingqing’s point of view is quite thorough. The question should be divided into two parts. For beginners, they should weigh their own resources and bargaining power. Cloud computing power is a low-threshold participation method for beginners this year. .
He Heng:The insufficient supply of chips has led to insufficient supply of the entire production capacity, which is a persistent problem. I think this is related to demand. The current currency price is greater than the relative production capacity. If the currency price is more than 20,000 US dollars and there is no explosive growth, the production capacity is actually sufficient to meet the demand. Even if the currency price returns to 20,000 US dollars now, the income per T may still be close to one yuan. Of course, miners with more than 50 cents are profitable. Now the income of one yuan per T is actually very high, and the computing power is not increasing now. , The mining income is very high, which will cause manufacturers or middlemen to increase the price of mining machines. At this time, various manufacturers will still consider the feelings of miners and friends, and most of them will be priced according to the payback cycle. It is impossible for miners to dig forever in the foreseeable future.
The mining industry is now in a period of rapid development, but I do not guarantee that there will be pitfalls on the road to future development. As for whether the current competitive landscape is in a relatively static state, I think that as long as there is competition, there is no such thing as static. Static is the superficial state of things. Don’t relax your vigilance. Those who make products still need to make good products and provide services. The most important thing is to do a good job in service, and those who make investments must manage their own profit and loss ratio, sharpen themselves before the next storm, and build a boat that can withstand the stormy sea.
Fangzhou Hao (host of the round table): Mr. He attaches great importance to the quality of products and services. We talked about the relatively static competition in the mining industry. This is because the market has entered a certain stage of the Matthew Effect, and the capital market will amplify the advantages of some high-profit companies. , Mr. Chen can answer this question.
Chen Lei:I think this matter is divided into so many points. First, the current mining machine situation is indeed quite tense. For the miners who are already in the field, the increase in computing power will not be large, which is definitely a good thing. As far as manufacturers are concerned, according to our own knowledge, the supply of the entire chip this year should still be quite tight. TSMC and Samsung also have demands from other industries and fields, and those are not likely to be able to fill them. However, there will still be some opportunities in the market. If the currency price remains at this high level, some old chip production lines and production capacity in the past can be reused. TSMC’s 5nm production capacity should be fine, and some orders can be obtained. We don't think the supply of new machines this year will blow out like the bull market in the second half of 2017, but there will still be a certain amount.
Another question, about the timing of entry. Mr. He also said just now that the price of the mining machine is always 200 days to pay back the price, which is a similar price. Sometimes BTC rises too fast, the effect will be magnified, and the price of the mining machine will appear a bit high, but Basically, they all come and go on the 200-day line. Looking back at the past at the current point of time, we feel that the machines are very expensive. In fact, it all depends on how we judge the market and the bull market. If Bitcoin reaches $100,000, looking back at the time we are talking today, the current price will appear very cheap. We often talk about this topic with institutional investors, that is, we must find a way to enter the low position of the market, but the difficulty in doing so is how to judge whether the current position is high or low, whether it is high in the past, or in the future? We don't know. It should be noted that risks still need to be controlled, especially for institutional investment customers. It is recommended to do at least 50% to 60% of hedging to ensure that the principal does not have too much risk. It is best to use futures and spot in parallel, similar to fixed investment. Strategy, with some hedging options, might be a little safer.
secondary title
Q3
Hao Fangzhou (host of the round table): Mr. Chen said that no matter who it is, it is quite difficult to judge where it is in history. under the market situation. Mr. Chen also made some more specific suggestions, asking everyone to use more financial tools for risk control, and also mentioned Ethereum, which is the topic of our last question. Some investors and friends have been paying attention to Ethereum recently. They will ask us, from the perspective of the secondary market, the growth rate of Ethereum is greater than that of Bitcoin, and DeFi is even more popular. Compared with Bitcoin miners, the position of Ethereum miners in the ecology At the same time, Bitcoin mining tends to be industrialized and the production capacity of mining machines is limited. Do you think that more investors will focus on mining Ethereum and other currencies with graphics cards? Is it appropriate to enter the market now?
Chen Lei:In the entire pan-blockchain field, whether it is technology, academia or application, Ethereum is currently the largest ecological public chain.
Of course, Ethereum also has some challenges. In terms of mining, one is the matter of switching to PoS. Especially newcomers may worry about whether they can mine in the future, but I personally think that the road from PoW to PoS is very long. At least in the middle of this will give us a lucrative mining return period of no less than two years. After that, we need to see how the future will go and how to participate. This is just my personal judgment. The Ethereum community is actually divided and radical. Some people are worried that there will be some surprises in the middle? At present, I personally think that there will be no major surprises, and mining can still be done within two years.
Second, Ethereum is also facing competition in terms of liquidity. I think the biggest threat to it may be exchanges (public chains), but I think (challenging Ethereum) will be more difficult. Ethereum is a serious ecology, what is ecology? The developers are all on Ethereum, in other words, the project parties are all on Ethereum. We usually say that exchanges have money and traffic, which is a threat to Ethereum, but I don’t think so. The traffic of exchanges is end users, not developers. To give a simple example, like the ecology of the Internet world, Microsoft, Apple, Google, Android, applications and products are all on them. Chinese mobile phone manufacturers have the largest and largest user base in the world combined, but this is meaningless because If developers are not among them, the ecology will not be competitive enough.
All in all, I feel that although Ethereum will have various challenges, as far as mining is concerned, it will be safe for at least two years. From the perspective of the market, compared with the consensus basis of BTC, the activity and future development of Ethereum still have a relatively large room for imagination. Of course, having said that, if you are an institutional user, our institution recommends 50% to 60% hedging, and you still have to be in awe of the market. We don’t know when the bull market will end.
Hao Fangzhou (host of the round table): Mr. Chen is generally optimistic. Although there is a threat from the exchange, he still believes that Ethereum mining still has a two-year window for newcomers. What does Mr. He think?
He Heng:In fact, I don’t know much about Ethereum personally. After all, I am not part of the Ethereum ecosystem, nor am I a technical person. From my point of view, Ethereum, as the current second largest blockchain project by market value, will still have many opportunities and imaginations in the future. There will definitely be more opportunities in the future.
As for Ethereum mining, or other mining based on Ethereum or other public chains, it is essentially an investment behavior for miners. Investing in something, whether it is a new individual or an institutional client, as Mr. Chen said, you must control the risk well, make good use of the financial tools in the market, and calculate your account, and you will know how to play. At this time, you will not think when to enter is the high point, and when to enter is the low point. There is a saying that is very good, the best time to plant a tree is five years ago, and the second is today. So when doing anything, don’t just stay in the imagination, but practice it, calculate your retreat, the losses you can bear, including your plan and the investment return ratio of the plan, and that’s it.
The mining industry must be a long-term industry. It needs to be deployed for a long time. There is still more room for imagination in the future, but this is the future. The premise is to survive now, so when you enter mining, you must control your Investing in risk is very important. Now there are many financial tools on the market that allow miners to protect their invested assets. I think this is very good, and it is very helpful to promote the entire mining industry.
Hao Fangzhou (host of the round table): Mr. He’s point of view is quite similar to that of investors and friends. Considering whether to enter the market from the perspectives of history, growth, long-term space, and risk control, mining pools may be different. Voices and opinions, including the 1559 proposal that was discussed a lot last week. Many friends around me also asked whether this aspect will affect the admission of newcomers. Qingqing will answer it first?
Green:Recently, the hot topics are all around Ethereum, including the point mentioned by Mr. Chen Lei just now. The current ecological chain of the exchange is developing very fast and well. A large number of transactions are formed on the Internet, which is a particularly favorable point for development. But we all know that Ethereum has achieved such a status in the past five years because it has the largest group of developers and the most ecology. An important chain.
Regarding the value of Bitcoin, we have formed a consensus over the years that it has the attributes of digital gold, but in fact it is partial to investment attributes; for Ethereum, it mainly lies in its ecology, participants and users. There is a significant difference between them. Bitcoin carries a very large amount of funds, while Ethereum carries a very large amount of funds and users. This is why we support the 1559 proposal, and we hope that the Ethereum chain will not be left behind. At present, the smoothness and experience of the exchange public chain are better than the current Ethereum, so what 1559 wants to solve is the TPS problem, including transaction congestion and too expensive gas fees, etc. We hope that Ethereum can carry more funds, users, and developers. So what to do? Only to broaden the road, why PoW to PoS, and why to promote and improve the protocol, are actually solving these problems, so we expect the development of the entire Ethereum to be positive and fast, the process from PoW to PoS is too much It is a long time, and it may take one and a half to two years to gradually transition in the future. 1559 is also to solve these problems faster.
Back to the perspective of miners, investors need to invest in equipment, which means that there will be costs. Miners must calculate the mining payback cycle, how much cost to invest, and how deep they should participate. The transformation from PoW to PoS is expected to take another two years. Whether the equipment and graphics cards in hand will encounter mining disasters after two years is also the most worrying issue for investors and current miners. F2Pool started from supporting Ethereum at the earliest, and then all currency types with graphic card attributes, such as Grin and Beam, will be supported for the first time. The reason we do this is to give miners more choices. After Ethereum converts PoS in the future, graphics card miners can still participate. . Now in addition to Ethereum, we recommend mining RVN for A cards, and CFX for N cards. The development of these currencies and the performance of the secondary market are very good. We support more than 40 currencies and continue to give us graphics card miners more choices. In fact, the transfer of Ethereum to PoS has been decided a long time ago, but the development is very slow, so we will continue to mine star projects and high-quality currencies, and provide new participating tracks and projects for miners, in addition to hoping that they will have better It is also hoped that in the future, the computing power of Ethereum will be undertaken, so that graphics card miners will continue to participate. Except for institutional users, it is the same for the entire graphics card market. In addition to paying back the cost, we are looking at longer-term things.
Hao Fangzhou (host of the round table): Thank you Qingqing, I can feel that F2Pool is looking at the future with a developmental perspective. I hope that the audience can remember some of the wealth codes just mentioned. Finally, we want Mr. Oda to talk about this issue again, how to view Ethereum mining.
Oda:Regarding the question of whether Ethereum mining can still be used, as we said before, if you want to do something, how to do it, and how to plan it, you will not be so confused. For our old miners, we don’t think so much, and basically plan ahead. What kind of machine should I use this year, and how should I increase the number of machines? The coins are then exchanged into machines, and this continues, slowly accumulating. However, for some users whose beliefs in the industry are not too firm, I suggest that you think about it again. You can also consider some products launched by the platform, such as earning coins, which are actually fine.
Hao Fangzhou (host of the round table): Thank you Xiaotian. When you introduced these methods just now, I can feel a little bit of Versailles. Xiaotian mentioned that the old people are more planned about the rhythm of admission, and the newcomers still need to pay more attention to control risk. Time is limited, so we will stop here for this round table. Thank you again for your wonderful sharing.
