Author | Richard Lee
Editor | Gong Quanyu
Author | Richard Lee
Editor | Gong Quanyu
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01 Giants go to sea, most small and medium miners are still waiting and watching
Xu Liang's nearly 20,000 Antminer S19 mining machines have been out of operation for at least half a month, but he is not in a hurry to go to sea.
Since the successive introduction of policies to shut down mines in various places, going to sea is the most discussed option in the domestic mining industry. Leading mining companies in China moved quickly. For example, Canaan announced the establishment of a self-operated mining base in Kazakhstan. Ninth City announced the acquisition of Canadian Bitcoin mine Montcrypto and invested in another mining company Skychain. Bit Mining also invested in Kazakhstan. The mine has transferred thousands of mining machines one after another, and said that the remaining mining machines will need to be transported in "the next few quarters".
But on a practical level, mining machines going to sea means that they have to face many problems such as uncertain local policies, unstable local social environment, insufficient mine capacity, and high transportation costs. Just recently, Kazakhstan enacted a new law that will charge cryptocurrency miners an additional fee of about $0.0023 per kilowatt of electricity.
Or because of this, for more small and medium mining enterprises and miners, wait and see is still their main attitude.
A large number of mining farms are located in Xinjiang and Sichuan, with loads of 250,000 kilowatts and 30,000 kilowatts respectively. They are mainly Bitcoin mining machines, and there are also a small amount of Ethereum graphics card mining machines. Xu Liang has also set his sights overseas after the local government introduced policies and shut down its mines.
"Going out to sea must be self-built. Unless there is a local load, it is impossible to resume operations immediately." Xu Liang said that currently it takes at least three to six months to build a new overseas mine, and it can take as long as eight months. And the cost of building a new mine is around six or seven million.
"Why am I not in a hurry to go out now? I just want to see how many people are lying on the ground in the first wave." Nearly 20,000 units of Antminer S19 are not an asset that can be easily transferred at risk. Xu Liang is waiting for the first batch to go to sea. Mining companies will make specific choices and arrangements for going overseas after they report back on their experiences and lessons. Xu Liang and his team started investing in Bitcoin mining in 2019, and they have already paid back their capital.
Similar mentality is not alone. The cloud computing power platform Yizhicai also issued an announcement on June 22, saying that after the mine in the Xiaona Park in Sichuan was shut down in accordance with regulations, the platform will stop the mining machine hosting business in the mainland indefinitely, and the overseas cloud computing will be shut down. Force business as the focus of the next step. However, in terms of specific overseas mining, the announcement stated: "Easy Mining adopts the strategy of following the leading enterprises in the industry, and waits for domestic counterparts to solve the corresponding operation and maintenance and maintenance problems of overseas mining before going overseas to avoid unnecessary suffering. Loss."
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02 Some small and medium miners may benefit from it
Due to the suspension of a large number of domestic mining machines, the daily average computing power of the Bitcoin network has dropped to 96.49EH/s as of July 6, which is close to the level at the end of 2019. This callback cycle of currency computing power. At the same time, some small and medium-sized miners who were previously in a weak position tried to seek more income during this period.
A senior person in the industry told the chain catcher reporter that there may be many new small-scale miners in the country, and many of them may have been small miners or participated in the joint mining of large-scale mines before. "In the past, these miners did not get up because they had a big gap in cost compared with large mines." The senior person said.
Affected by the low tide of the entire network's computing power, the difficulty of Bitcoin's entire network has been lowered one after another. On July 3, the mining difficulty was reduced by 27.94% to 14.36T, the largest reduction in history. As the difficulty of mining decreases, the income of online miners will increase, including small miners who were relatively passive in terms of electricity costs before.
He also added that due to the global chip shortage in the past year, the computing power has basically not increased much, so even the Antminer S9 mining machine six years ago still has a low proportion of electricity costs, which means that the current mining machines on the market are basically They are all "electricity insensitive", and even using a household electricity price of 0.6 yuan can still be profitable, while warehouse rent and noise reduction costs are almost negligible relative to profits.
For the small Bitcoin miners who stay in China, it is still unknown how long the upward trend of income during the computing power correction period can last. According to the analysis of the above-mentioned industry veterans, under China’s latest regulatory policies, the future computing power structure may become more complicated.
On the one hand, some domestic small miners who have advantages in power resources, such as those who use small hydropower stations or isolated grid power to operate mining machines, may not necessarily have a lower mining cost than overseas; on the other hand, the construction of domestic mines is also Relatively cheap, according to his introduction, the construction cost of overseas mines such as the United States is roughly four to five times that of domestic mines.
Therefore, the senior person predicted that in the future, among domestic small miners, those whose electricity cost is below 50 cents/kWh can still occupy a certain living space in the expansion of overseas mines; Small miners of / degree also hold advantages in at least the last year, but after a year of overseas mining development, domestic retail investors with this power gradient may still face the fate of being eliminated.
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03 The Ethereum mining machine was affected, but it is still sought after by the market
Although local governments are mainly cracking down on the Bitcoin mining industry, many Ethereum miners have also been affected because a large number of Ethereum mining machines and Bitcoin mining machines are operating together in mines in Sichuan and other places.
Liao Hao became a miner in November last year. He is running hundreds of Ethereum mining machines in a State Grid hydropower consumption park in Liangshan Prefecture, Sichuan. In the first half of this year, the currency price has been rising all the way. Liao Hao also followed the market and bought hundreds of new Sapphire 588 machines at a price of more than 30,000 each. After the Sichuan Provincial Development and Reform Commission issued a notice of withdrawal on June 18, the price of the same type of mining machine dropped below 13,000, a reduction of more than 50%.
"The depreciation of the mining machine is too serious, and now it is a waste of time." Liao Haosan and April just finished repaying the bank loan of 500,000 yuan. Now the mining machine is shut down and the cash flow is interrupted. "If (the price of the mining machine) falls again It’s really a loss.” But in this large mine with more than 100,000 machines, Liao Hao's situation is still good.
"Think about how many people are doing cloud computing here. (Some) borrow money (to buy mining machines), which is a huge burden. Many people lose their money and have no time to cry." Liao Hao said. In addition, four or five small retail investors who just "rushed into the market" this year also suffered serious losses. When the currency price reached a high point, they bought mining machines at a high price of 30,000 to 40,000 units. shutdown. In the park where Liao Hao is located, there are "more than a few hundred" such people.
Right now, waiting and watching and "distributed" mining have become the coping strategies of Liao Hao and his colleagues. While “looking at the situation” and waiting to see whether there will be any loosening in the implementation of subsequent policies, they are also starting to transfer idle graphics cards and mining machines to gamers or other small retail investors. Regardless of whether the implementation has changed, what Liao Hao knows is that the large domestic mines no longer have the advantage.
"Run as much as you can." Even if the situation doesn't turn around, Liao Hao intends to find a place to keep the mining machine running. His own home, relatives' home, joint mining, etc. are all options to consider. "Either install a solar power generation site by yourself, and then put a dozen or twenty mining machines."
Liao Hao also set his sights on the small hydropower station in his hometown. The hydropower station is located in Heyuan, Guangdong, with a load of 500 kilowatts. The private price is 3 million yuan, which Liao Hao cannot afford alone. In addition, after the finalization of the regulatory policy, Liao Hao is also worried about the eyes of the people in his hometown: "It is now said that mining is illegal, if those people in my hometown who don't know about it think that we are doing illegal things and ruin our reputation. .”
"Our status as absenteeism has changed from holding our heads high to now being downcast." Liao Hao laughed at himself.
Taking Liao Hao’s experience and countermeasures as an example, the trend of further decentralization of Ethereum and small currency mining in China may be taking place. The owner of a mining machine dealer in Chengdu, surnamed Min, told the chain catcher reporter that since the Financial Commission of the State Council stated in May that it called for a crackdown on cryptocurrency mining, the price of mining machines has been falling all the way, but sales have not been affected in any way. The reason is that Ethereum and Small currency mining machines are still sought after by the market.
"At such a low price, the mining machine is very easy to sell," said the owner, surnamed Min. According to him, many retail investors can’t afford mining machines when they are at a high price, so they can only wait and see, “Now that the time is right, they should hurry up and buy the machines, and they can finally mine. That’s their mentality.” For example, mining machines for Litecoin Ant L3+ sold for eight or nine thousand when the market was the highest, but now it can be bought for two thousand.
