The third computing power revolution: Water-cooled mining machines may be the ultimate form of computing power products!

Market, market, everyone is watching the market, but behind the market, there are still some profound things happening in the mining industry. The mining machine computing power has once again come to a crossroads, continuing yesterday's reappearance, today's shutdown products, can they return to the stage again? Most people probably don't care, anyway, life is indifferent to life and death, just do it if you don't agree.

At present, the lucky ones are the miners who have a large computing power in the early stage and are still running; the miserable ones are the miners who entered the market at a high position, or were forced to shut down the machines with small computing power, or had a lot of machines but no suitable electricity. The former have already recovered their investment, and in the case of a sharp drop in the price of the currency, they can still make good profits by lying flat. The latter, at least for now, are the ones who take over at a high position in the market.

But is this the result of the mining circle? Is it really possible to get rich by buying cheap machines at reasonable prices, as most people think? What are some pioneers doing, and what are mining machine manufacturers doing? Water cooling products, which used to be like modified cars, have been accepted and recognized by mainstream manufacturers. What do water cooling products represent?

The truth may be more terrifying than we thought. Silently and invisibly, we will usher in an era of large computing power, or super computing power, and 2022 will be the first year of the third computing power revolution.

The full text is nearly 5,000 words. Next, we will discuss whether this is a transformation or a battle in seven dimensions. You can browse by section:

1. The important computing era we are experiencing.

(II) Several reasons why water cooling will become mainstream.

(3) “Crisis” in the era of change.

4. Why do ETSI chips have great potential for performance improvement?

(V) Compared with other large manufacturers, Intel still has more than one generation of product differences.

6. Is the water-cooled mining machine the ultimate form of computing power products?

7. What changes will there be in the water cooling market in the future compared to today?

1. The important computing era we have experienced:

1. Individuals and geeks: From 2009 to 2012, four years passed, but the core issue that could not be avoided was CPU and GPU mining , first M and then G. In the four years of rapid change, when individuals or companies leading with G were making a fortune, they did not expect the arrival of the T era. We said goodbye to the past without any signs, no goodbye, only farewell.

2. Professional machine (ASIC) air cooling era: From the first ASIC mining machine in 2013 to now, as the chips are made smaller and smaller, the computing power is getting higher and higher, from the initial single 10G to the current maximum 140T, according to the current situation, according to the best energy consumption ratio, ASIC machines have basically approached or reached the physical limit of ASIC air cooling products . At present, Intel's ASIC air cooling 138T is basically the same as Ant's S19XP computing power. Therefore, in the future, it is not the further changes in chip manufacturing that can achieve an exponential increase in the computing power of ASIC products.

3. Professional machine (ASIC) water cooling era: 2022 is exactly ten years compared with the previous era. In these ten years, a large number of people have been accomplished, including firm believers, mining machine manufacturers, power resource integrators, power equipment suppliers, mining machine traders, mine builders, mine owners, etc. In ten years, we have gone through the industrialization road that traditional industries have to take for decades.

This year, Bitmain released the mass-produced Ant ASIC water-cooled mining machine. Here, we can't help but ask, are ASIC mining machines about to usher in the third revolution in this industry?

In fact, this question is like asking whether new energy vehicles will replace traditional fuel vehicles. There is no need to ask, because it has already arrived. It’s just that our industry is different from the traditional automobile industry, and it will be faster than we think. Just like ASIC is going to replace CPU and GPU mining, it’s not a goodbye, only a farewell.

2. Several logics for water cooling to become mainstream:

Pursuing the best power consumption ratio with limited energy : The proportion of electricity costs in future computing power products will only increase , unless a more ideal power consumption ratio can be achieved. For example, Antminer's XP Hyd has a power consumption ratio of 20.5, which is more than double the energy consumption ratio of existing mining machines.

Large-scale pollution sources: Decentralized professional mines are not all located in the mountains or next to reservoirs. More likely, they are located in industrial areas or close to residential areas. Indicators related to noise pollution and greenhouse gas emissions are likely to become prerequisites for restricting the existence or start-up of large-scale sites.

The best heat dissipation of water cooling has spawned a "big" market: For air cooling, because it is divergent and has a physical-level heat dissipation effect, the high-intensity operation and environmental corrosion of hardware products not only cause frequent machine problems and limited lifespan, but the heat dissipation efficiency of wind reaching the chip is about 8%. For oil cooling, it is immersive and a good heat dissipation method, because the body is fully immersed, and the oil flow takes away the heat from the heat sink to achieve chip heat dissipation, but because the oil cannot directly reach the chip, the projected area of ​​the heat sink is only about 15%, and the flow rate is slow, so its heat dissipation efficiency is only about 20%~35%. The water cooling method is different. Since the water cooling plate is almost zero-distance fitted to the chip, and the specific heat capacity of water is greater than that of oil, and the density is 10,000 times that of air, 99% of the heat energy can be taken away through the rapid flow of water.

Taking the measured data of the Antminer 19 series mining machine as an example, under the same frequency, the average chip temperature is 70-75 degrees in the air-cooled state, 65-70 degrees in the oil-cooled state, and about 60 degrees in the water-cooled state. It can be seen that the heat dissipation effect of water cooling is significantly better than that of air cooling and oil cooling. Therefore, the future is an era of large power supply and large computing power. From a technical point of view, because of the heat dissipation of water cooling, 6000, 10000, and 15000W power supplies become possible . For 5nm or 3nm chips of Taiji Electric, under the premise of ensuring the number of chips, solving the power consumption and chip temperature, it is normal for 300-400T machines to appear in 2023. In addition, the power consumption ratio may also be an astonishing 20.5% or lower.

The violent increase in computing power has not yet been reflected in time: Is the computing power of the entire network we see today real? Yes and no. The core behind computing power is energy. How many mining machines are currently on the way to global migration or have arrived at their destinations, waiting for the improvement of infrastructure. If the real computing power under energy security, I believe it has exceeded 300E . So if the computing power increases by 40%, will the profit decrease by 40%? Probably not, because the basic electricity price remains unchanged. For miners, how much will the profit decrease?

Let's take S19 as an example. At present, the basic electricity price is 7.5 cents (0.5 RMB). The current electricity fee accounts for 51.9%, and the daily income is 75.16. But if the computing power increases by 40% to 300E, will the income be 75.16X0.6=45? In fact, it is not the case. At this time, the electricity fee will account for 81%, the net income will be 6.1 yuan, and the income will decrease by 78%. Of course, the calculation logic is that the currency price remains unchanged. We also know that this industry cannot be predicted in the short term, and there is no need to predict in the long term.

Here is another calculation for XP water cooling. When the hashrate reaches 300E and the electricity cost of S19 accounts for 86%, the electricity cost of XP water cooling accounts for 53%, and the daily income is 57.4. The single T income is nearly 3 times higher than that of S19, and the overall income is 9.5 times higher. Of course, if the income is this, and the coin price remains unchanged, the payback time of XP water cooling is about 6 years. Oh my god!

Therefore, we must believe that the future does not need to be predicted, otherwise there is no point in mining.

Of course, some people will say that the above calculation is not rigorous, because when the computing power increases by 40%, the low computing power machines are shut down first. When they are shut down, the computing power actually decreases. This is true, but we must not underestimate the manufacturer's shipping capacity, and the number of high computing power machines that are already piled up in the warehouse ready to be put on the shelves. Based on the ability of several major manufacturers to sell futures, it can only be said that it is exaggerated and crazy.

3. “Crisis” in the Era of Change:

Wei: In the future, the cheap mining machines you buy may be scrap metal, just like in the ASIC era, you bought CPU and GPU mining machines for mining. The changes in technology upgrades are revolutionary. In a certain sense, in the bear market of air-cooled ASIC, buying mining machines at the bottom is a bargain and a value investment. Picking up low-computing power mining machines during the water-cooling technology revolution is to leave memories and recharge faith.

Danger: The value of a mine is determined by the price of electricity. No matter how good the relationship is or how good the energy point is, if the price is not competitive, the biggest profit will be eaten up. Industrial electricity, countries with high electricity prices, countries with high energy taxes, etc., have nothing to do with resources, but with whether the business can survive.

Machine: With the advent of the water-cooling era and the improvement of the industry's infrastructure, we must believe in the power of leaders. The arrival of "cloud" is the result of education by giants. Today, "cloud" is everywhere. Bitmain, which accounts for 80% of the industry, plans to use water cooling for 80% of its products when formulating its 2023 annual plan. It will surely lead the industry's gradual transformation from air-cooled infrastructure to water-cooled infrastructure.

Machine : Traditional Taiji Electric 5nm mining machines, represented by the S19 series, have ample possibilities for water-cooling transformation and strong room for performance improvement . The sooner you enter the water-cooling era, the faster you can reap the industry dividends. In many cases, you don’t want to achieve a staged victory, but rather a comprehensive “survivor” is king.

4. Why do ETSI chips have great room for performance improvement?

Here we need to analyze the industry positioning logic among large companies. Generally, leaders will not go all out to face the market, and followers will not even have a chance to survive if they do not work 100% or 120%. Have you ever seen a martial arts master who uses a unique move at the first move? Only second-rate players will go all out when facing masters.

In the mining machine industry, the upstream chip manufacturers are more powerful than the big manufacturers. Bitmain signs a long-term supply plan to ensure chip supply, so Bitmain's logic is how to use more TSMC chips, rather than maximize the use of TSMC chips. If it is maximized, it will make it difficult for itself to build so many mining machines. Therefore, its production logic is the most appropriate production and sales integration logic, rather than the logic of the best performance product. Because the supply guarantee of top-level chips is the guarantee of long-term performance.

Here, the existing market is given enough room for imagination. Have you ever thought about water cooling the S19 series of 5nm chips? It is not the manufacturer who left you an opportunity, but the chip supply chain that accidentally left you an opportunity.

Because of this, if the hardware has room for improvement, the software improvement method is appropriate, and the infrastructure is in place, it will be possible to evolve from air-cooled ASIC to the next generation of water-cooled ASIC at a low cost.

5. Intel still has more than one generation of product differences compared to other big manufacturers

This is not about technology, but about concepts, cognition and understanding of the industry. It is understandable that Intel can get the best chips and the best supply chain system in the world, but cognition is a magical thing. When Intel decided to produce prototypes only for three mining listed companies in North America, the arrogance of foreigners would make them have at least one generation of product difference. Is Facebook's technical ability worse than TikTok? But the cognition of short videos made them miss an era. The more effort Intel puts into air cooling today, the more likely it is to lose in the water cooling track .

Mining machine computing power products are not consumer products. The bigger the company, the more competitive the product. They are investment products that pursue the best power consumption ratio, the best return ratio, and the best use period . It may be a bit early to say that the starting point determines the end point, but after running 10,000 meters to the left, you realize that the game should be to run to the right. It’s okay, the night is long, we will wait for you on the road.

6. Is the water-cooled mining machine the ultimate form of computing power products?

In the short-term known technologies, it is highly likely. Don’t mention quantum computing. Let’s wait until the chip is revolutionized and used in missiles. From the evolution of several generations of mining machines, people have been constantly choosing and making trade-offs between wind, oil, and water. It should be said that the core of limiting the computing power of a single machine is still the heat dissipation and temperature issues. From the perspective of cost, environmental protection, and convenience, except that wind is endless, the noise is too loud. Water is recyclable and nearly endless, and it is environmentally friendly and pollution-free . There is really no other alternative heat dissipation medium.

7. What changes will there be in the water cooling market in the future compared to today?

The cost of infrastructure will increase, but compared with the investment in mining machine computing power products, the comprehensive cost is less than 5% of the computing power cost. For those who spend 95% of the investment on purchasing computing power products, 5% of the infrastructure is acceptable .

The number of machine positions will be reduced; the number of machine positions in water-cooled sites will be at least 40% less than that in air-cooled sites, and at most 50% less. That is to say, a 10MW site previously required 3,300 machines, but now only needs 2,000 machines, or 1,650 machines. The land requirements and environmental requirements are lower.

Reduce the generation of electronic waste; because the number of machine positions is reduced, the same 10 megawatts, the deployment of fewer machines is equivalent to reducing the possibility of electronic waste generation, and also reducing the land area and land costs . The heat dissipation of machine chips is enhanced, and the computing power is improved, which means that its service life is extended.

Basic service providers emerge; with the gradual upgrading of the industry, the competitiveness of air-cooled sites will become weaker and weaker, and will be gradually surpassed by water-cooled sites. More and more new sites will consider hybrid site solutions (air cooling + water cooling), or water cooling will be the first choice for new sites (coins should represent). In the water-cooled infrastructure (water-cooled mining boxes), there will be water-cooled infrastructure service providers with branding, standardization, and globalization. Branded water-cooled basic service providers will not only serve a single product and a single manufacturer, but will serve the entire industry, multiple brands, and cover various models.

Trade circulation remains strong; water-cooled computing power products are not only the domain of institutions and large customers, but also small-scale water-cooling equipment providers will emerge to provide infrastructure for more small-scale new entrants , lowering the current industry threshold of tens of millions to millions. The mining machine circulation market will continue to be prosperous.

Technology service providers will emerge; some miners with S19 series and 5nm chip machines from Taichi Electric will upgrade their stock and be the first to reap the industry dividends . When the stock of upgradeable machines exceeds one million, there will be dedicated upgrade service providers. The upgrade from air cooling to water cooling will become a standardized product entering the market, and one or more large-scale water cooling technology upgrade service companies will be born in stages.

Products with super-large computing power; due to the introduction of aviation plugs and water cooling, water-cooled power supplies will have products with a power of more than 10,000W, and because of the addition of super-large power supplies, computing power products will have super-large computing power stand-alone products with a power of more than 400T .

The market really cannot be analyzed. In a bear market, all analyses are pessimistic. Why do we still say that water cooling is the third computing power revolution? Because in the mining industry, if we can call it a strategic opportunity, there are mainly two.

1. In the bear market, people firmly believed in hoarding coins, or held low-cost machines at the bottom . Most of the winners in this round of bull market have survived the cold winter of 312 and the biting of 519, and inexplicably embraced the era of institutional entry, and witnessed Bitcoin reaching 60,000 US dollars.

Second: They emerged from the technological revolution. The leading mining machine manufacturers that are still active today all debuted in the era of air-cooled ASICs. Large miners and institutional miners with "money" also made their mark in this era . These pioneers, because of their awe of technology and perseverance in faith, deserve to be the beneficiaries of the times.

What will happen in the future, in the upcoming era of water cooling with large and ultra-large computing power? Will more sovereign countries accept Bitcoin? Will it fall into despair amid traditional doubts, or reach new heights amid consensus? Will excellent companies be born in the era of water cooling? In addition to water cooling, will there be disruptive technologies? The blockchain industry is always performing miracles and has infinite possibilities. Whether you are an individual or a group, you are a force that changes the times . The unknown future makes us look forward to it together.

In addition to the technology and outlook, here is a short story for all miners:

Two friends were walking in the forest, neither wearing shoes, but one of them had his shoes hung around his neck. Suddenly, they encountered a bear. One of them couldn't run fast without shoes, but the other one immediately put on the shoes around his neck, and when the bear came up to eat his friend, he ran away. You will definitely encounter bears in the forest, but shoes don't make you run faster than bears. As long as you run a little faster than your companion, you can pass through the forest and see the sea. The revolution of water cooling is the shoes on our necks. Are you ready to set off with shoes hanging around your neck?