"Mining" encounters strict regulation: Huaqiangbei boss's daily income is zero, and graphics card prices plunge

Original title: "Mining" encounters strong regulation: Huaqiangbei boss's daily income drops to zero, graphics card prices plunge

Shenzhen Huaqiangbei is the distribution center for mining service providers across the country. The stall owners who mainly sell "mining" products have had a hard time over the past month.

In early July, the fifth and sixth floors of Huaqiangbei SEG Plaza, which mainly sells mining machines, hard drives, graphics cards and other electronic products needed for "mining", were a little deserted, completely devoid of the bustling crowds in May. Mr. Jin, the owner of a mining machine business, recalled that in April, everyone at SEG was scrambling to buy hard drives, and many "new bosses" entered the market. It has only been a few months, and the market has completely changed.

The reason behind this is that virtual currency mining projects are subject to strict supervision at the national level.

Since June this year, many major mining bases such as Inner Mongolia, Qinghai, Sichuan, and Hefei have been shut down one after another, and the withdrawal of mining from China has become a foregone conclusion. Real-time data shows that at 8 a.m. on July 19, the price of Bitcoin was $31,121.26. In mid-April this year, the price of Bitcoin once exceeded $63,000, but now the price has been cut in half. At the same time, the prices of Kia Coin and Ethereum have all plunged sharply compared with the market in April or May.

Experts believe that my country's regulation and restrictions on Bitcoin trading speculation and mining are mainly aimed at preventing financial risks. If Bitcoin or other cryptocurrencies cannot meet the requirements of financial stability, they are likely to be subject to "strong regulation" or even suppression for a long time.

The price of "mining" products has fallen sharply

In 2009, the mining industry developed rapidly around the world, attracting numerous capitalists to join the game. Shenzhen Huaqiangbei, as the largest electronic product trading center in China with the most complete product categories and the largest annual transaction volume, sells electronic tools needed for mining, and has also become the choice of many electronic merchants for transformation.

Just recently in May, in Mr. Jin's shop, several employees were assembling mining machines on the desktop without stopping. On the most conspicuous wall of the shop, an ultra-large LCD TV broadcast the real-time prices of various virtual currencies, while another one displayed the price of mining machines that day. The top-end server cost more than 80,000, the high-end cost more than 70,000, the mid-end cost more than 40,000, and the low-end cost more than 20,000... At that time, there was an endless stream of currency enthusiasts who came to the store to inquire about mining.

"The price of an enterprise-level 16T hard drive is 5,300 yuan and must be reserved." This was the price quoted by Ms. Zhang, a store selling hard drives of brands such as Western Digital and Seagate, in early May. At that time, shortages and price increases were the norm.

The price of enterprise-class large-capacity hard disks has been pushed up several times after the emergence of KIA Coin. After mining with mining machines and graphics cards, the new favorite KIA Coin only needs a hard disk to start mining.

But more than a month later, after the cryptocurrency market was regulated and the price of Kia Coin plummeted, the price of hard drives has recently returned to its initial price.

In mid-July, Ms. Zhang was sorting goods in a stall of less than 10 square meters. When asked about the price of 16T hard drives again, she said that it was now around 2,000 yuan and the supply was sufficient.

The price of P-disk servers, which are also used for mining, has also plummeted. Mr. Jin told the First Financial reporter that a top-of-the-line P-disk machine with a daily P-disk capacity of more than 9T (with brand new accessories and warranty) cost more than 80,000 yuan in May, but now costs more than 40,000 yuan.

April and May were Mr. Jin’s highlights in the cryptocurrency circle. He posted more than ten WeChat Moments in those two months to promote his store. However, in June and July, Mr. Jin only posted two updates about his store on WeChat Moments.

Graphics cards, which have always been priced firmly, have also been greatly affected. Jiang Tai, the owner of a graphics card stall, told the First Financial reporter that graphics cards, in general, have dropped by 20% to 30% compared to before.

As cryptocurrency mining is facing strict regulation, some private power plants are also beginning to close down, and the number of second-hand graphics cards on the market has also increased significantly. Compared with new graphics cards, second-hand graphics cards have seen a greater price reduction.

According to industry quotations, the RTX 3060, with an original price of 2,499 yuan, is currently priced between 2,400 and 3,000 yuan in the second-hand market, and the price was 6,500 yuan two months ago; the RTX 3070, with an original price of 3,799 yuan, is currently priced between 4,100 and 5,000 yuan in the second-hand market, and the price was 8,500 yuan two months ago; the RTX 3080, with an original price of 5,499 yuan, is currently priced between 5,700 and 6,500 yuan in the second-hand market, and the price was 12,000 yuan two months ago.

The prices of various mining products have been cut in half, and mining machine service providers are having a hard time. Jiang Tai has been at SEG Plaza for more than ten years, starting with selling computers and peripheral products, and then mainly selling graphics cards and mining machines. In his words, "I sell whatever the market needs."

When the market was hot, a high-end mining machine cost more than 100,000 yuan, or as little as tens of thousands, and a graphics card cost thousands or even tens of thousands. Jiang Tai said that when it was the hottest, the daily sales were hundreds of thousands, and generally more than 100,000. Now, the daily turnover is at most tens of thousands, and sometimes there is no income at all.

At the same time, many merchants told the First Financial reporter that SEG Plaza has recently entered a maintenance period and will be closed for more than a month, so they will take orders online during this period.

Early in the morning of July 15, Jiang Tai saw a notice at the stairs of SEG Plaza. During the mast removal period, SEG Plaza Building and some surrounding roads will be closed for management, requiring owners and tenants (merchants) to move valuables and items needed for business operations out of the building within 24 hours from the time of the issuance of this notice. From 18:00 on the afternoon of July 16, 2021, except for construction workers and staff with passes, other unrelated personnel are prohibited from entering and exiting the tower, podium and underground parking lot of SEG Building.

Jiang Tai said that during the closure of the building, his business premises will be moved to the underground mall in Huaqiangbei to continue operating. However, it will still be affected in attracting new customers, sending express deliveries, and picking up goods.

Mining may be subject to long-term strict supervision

On June 22, relevant departments of the People's Bank of China stated that virtual currency trading speculation disrupts the normal economic and financial order, breeds risks of illegal cross-border asset transfer, money laundering and other illegal and criminal activities, and seriously infringes on the property safety of the people.

At the same time, mining also brings huge power consumption. According to data from the Cambridge University Alternative Finance Research Center, as of May 17, 2021, the annual power consumption of global Bitcoin "mining" is about 134.89 billion kWh. If Bitcoin is regarded as a "country", it ranks 27th in the global national power consumption ranking.

Yu Lingqu, deputy director of the Institute of Finance and Modern Industry of China (Shenzhen) Comprehensive Development Research Institute, said in an interview with the First Financial reporter that my country's supervision and restrictions on Bitcoin trading speculation and mining are mainly aimed at preventing financial risks. For example, Bitcoin lacks a value center and its price fluctuates greatly, causing losses to investors and may even evolve into social risks; Bitcoin cross-border transactions evade cross-border capital flow supervision, posing hidden dangers to national financial security; Bitcoin provides trading tools for black and gray industries, bringing new financial risks such as money laundering and terrorist financing.

Yu Lingqu said that if Bitcoin or other cryptocurrencies are incompatible with the existing financial regulatory system and cannot meet the requirements for stable financial operations, they will likely be subject to strong supervision or even suppression for a long time and will find it difficult to become legal financial assets.

Along with the changes in the cryptocurrency circle, the slogan on a wall pillar in the middle of SEG Plaza has also been updated recently, from "Home of the Cryptocurrency Circle" in May to "Server Accessories" now.

When asked if stall owners have any other way out when business is slowing down, Jiang Tai told the First Financial reporter that he has not thought of it yet and just needs to continue waiting and watching.