FIL surged 422% in a single month, and big miners said it was far from their psychological expectations | Pre-heating for the second computing power conference

On March 31, Bairong Cloud Technology Co., Ltd. was listed on the Hong Kong Stock Exchange, and its stock price plummeted 16% from the opening price, breaking the issue price. This made investors who had tasted the sweetness of Hong Kong stock IPOs quite upset.

In a Hong Kong stock IPO group, an investor joked: I have made a lot of money from FIL recently, so I can buy new stocks at will. As a result, the group went wild and a group of people started talking about FIL enthusiastically. It turns out that while NFT has become popular, the traditional capital market has also been swept by a FIL trend.

In March, Filecoin token FIL rose against the trend, with a monthly cumulative increase of 422%. According to Feixiaohao data, its circulation market value is 107.4 billion yuan, ranking 8th, second only to XRP, but higher than UNI.

The surge in FIL has taken many people by surprise, and they are deeply surprised and confused. At the same time, many people also said that this is completely expected, without any suspense, and a sure thing.

The token incentive model is similar to 10%POW+90%POS. Is this the engine of FIL's eternal bull market or the poison that leads to a death spiral?

Is the fact that Chinese miners occupy more than 95% of Filecoin nodes a business opportunity or a trap?

FIL, can it still rise? Can I still participate in FIL mining?

On April 17-18, the "Supercomputing and Fusion, 2021 Global Blockchain Computing Power Conference" will be held in Chengdu, Sichuan. We interviewed several guests in the Filecoin field. They gave the most cutting-edge analysis from the industry, which may help you solve your confusion.

FIL, why did it increase by 422% in a single month?

The surge in FIL can be said to be unexpected, but also reasonable. On this topic, let us listen to the analysis from front-line practitioners.

Ni Yiye, founder of Westworld:

1. On April 15, FIL has a relatively important node, that is, the linear unlocking of SAFT tokens within 6 months after the launch of the main network is about to be released, which means that the daily new supply of FIL will decrease. The reduction in supply is a sign that will inevitably affect the supply and demand market. In fact, there is a wave of increase before each Bitcoin production reduction, which is a reason for the increase brought about by the main network rules.

2. Grayscale launched the FIL investment fund, which had a great impact on investors’ confidence. The current round of Bitcoin’s rise also started with Grayscale’s entry.

3. The mining market is hot, and my colleagues and I have spared no effort to promote Filecoin. Now, FIL is obviously in a state of supply less than demand. As long as someone participates, the price of the currency can only go up. When the growth rate of new participating customers reaches a bottleneck, there may be an opportunity for a callback.

Andy Guo, partner of Open Source Mining Pool:

1. This year is a bull market. Both Bitcoin and Ethereum have seen very impressive gains, but FIL has not moved since it rose from $20-30 to $40-50. When Bitcoin did not effectively break through $60,000, funds on the market began to look for new investment opportunities. FIL is a low-value asset with hype, and it only rose 2-3 times at the time.

2. Filecoin is being accepted by more and more people, including traditional funds, listed companies, and Chinese stocks. With the entry of off-market funds, FIL has successfully broken through the circle. Moreover, Filecoin still has a lot of potential. For example, if it can support smart contracts, then the price will have room to rise.

3. Although Fileocin has POW components, it is actually a model of POS. The biggest investment in FIL mining still comes from mortgage and GAS consumption, and the coin is the real mining machine. In addition to GAS destruction and mortgaged FIL, the circulation of FIL is not much, and the FIL given to miners to increase computing power is very small, and the amount of lending is also very limited. In addition, some manufacturers oversell computing power, so they must quickly buy coins to mine to fill the gap. FIL mining will cause the price to spiral upward.

Filecoin computing power growth chart

Filecoin, is China the main battlefield for mining?

Data shows that 97% of Filecoin's nodes are in China, which matches the impression of many people. Some people joke that Filecoin is a Chinese project.

At present, although activities including AMA from the official Filecoin Protocol Lab are rarely seen in China, and the main force of social communication is basically Chinese mining machine project parties or unofficial teams, in fact, the Protocol Lab also admits that China is one of the most valuable markets for Filecoin.

Why does China play such an important role? What do practitioners think about this issue?

FBG Business Development Gao Guijun:

Most of the Bitcoin and Ethereum miners are also in China. There is a mining atmosphere in China, and everyone is more accepting of this business model.

In addition, Filecoin actually received a lot of publicity in China in the early days, and the market foundation was very good, which made many retail investors willing to participate. This 2C user base makes it easier for miners to promote their subsequent mining business.

Ni Yiye, founder of Westworld:

This is a common situation in the blockchain industry. Americans or Westerners provide technology, the Chinese push the popularity to a high level, and finally the whole world shares the benefits of the industry. This is the case with Bitcoin. A large number of miners are actually in China, but the miners sold the coins. Now, including Grayscale, Western forces are starting to buy back the coins.

It is a very normal phenomenon that most of FIL's miners are in China. China has a natural soil that is conducive to the spread and promotion of the mining industry. This is true in terms of supply chain, market funds, and other dimensions. But I believe that starting from Grayscale's entry into FIL, more mainstream investment institutions will also participate in it, and finally, FIL will form a virtuous circle like Bitcoin.

Andy Guo, partner of Open Source Mining Pool:

China's electricity and IDC service fees are relatively cheap, which is a very important reason.

In addition, Chinese miners actually want to go abroad, but they happened to encounter special circumstances in the past two years, which made it impossible for many people to go out.

Li Xin, Vice President of RRMine:

At present, most of the market share of centralized data storage is monopolized by a series of foreign world-class cloud service platforms such as Amazon Cloud and Google Cloud. Among the nodes operated by IPFS (Filecoin) globally, China accounts for more than half, so the Chinese market is the main force market for distributed storage.

China is in a stage of high development and high demand. With the introduction of national macro-strategies such as Digital China, new infrastructure, and domestic substitution, distributed storage has a broader application scenario. The use of distributed storage in manufacturing, education, finance, radio and television, healthcare, government and other fields is in line with my country's development needs.

Where is the future of Filecoin? Can I still participate now?

Andy Guo, partner of Open Source Mining Pool:

The so-called upward spiral of FIL mining is driven by leverage. If the price of the currency falls, will it lead to a decrease in computing power, thus causing a downward spiral? I don’t think so. Miners need to pledge FIL to increase computing power. When the price of FIL falls, the cost becomes lower. This is equivalent to the electricity bill of Bitcoin miners becoming lower, and miners will calculate the currency-based income.

FIL's model makes it relatively easy to rise, but it is difficult to fall below the cost. It does not fall faster and faster, it must fall slower and slower. When it falls, miners will buy it to mine.

Filecoin mining has inertia. Whether it is computing power packaging or mining, it cannot be stopped or started in seconds. It is not like Bitcoin miners who mine, withdraw and sell.

Therefore, FIL is essentially too suitable for short-term investment. Miners need to adjust their mentality. It must be a long-term behavior. Short-term price increases and decreases do not have much stimulation for us, because most of them have not cashed out. Most of the big miners have mortgaged all their coins and then packaged new computing power. Because FIL mining must be better to participate early than late, and the later you participate, the lower the income.

If you do not participate in mining and you have relatively little money to invest, I suggest you buy some FIL and lend it to us, which has an annualized return rate of 45%.

FBG Business Development Gao Guijun:

Judging from the current coin price, it is OK for retail investors to participate, as they can get returns immediately after investing cash. For large investors, I think it is not too late to enter the market now, but we know from the yield curve that the daily coin production per T computing power is on a downward trend, so in fact, the time window for large investors to get high profits is not very long.

Li Yandong, Chairman of Star Continent:

Previously, Li Yandong expressed a similar view when he was interviewed by Wu Blockchain in preparation for the Chengdu Computing Power Conference. He said that the popularity of Filecoin was driven by miners, and Filecoin's "wonderful" economic model deeply binds miners, laying the foundation for the scale of Filecoin mining. If it continues to develop in this way, it is very likely to surpass Bitcoin and become the largest mining ecosystem.

Since Filecoin mining requires high pledge deposits and penalties for violations, the vitality and endurance of miners will be much stronger than those of Bitcoin miners.

However, Filecoin’s goal is to store the real data of the Internet, and now the rapid expansion of mining scale is mainly in storing “junk” data. However, under the rules of the foreseeable future, the mining efficiency of storing real data will be 10 times that of storing current “junk” data. Therefore, it can be predicted that the scale of Filecoin mining will experience a process of wild expansion in the early stage (2018-2022), gradual shrinkage in the mid-term (2022-2024), and gradual increase in the late stage (2024-).

Ni Yiye, founder of Westworld:

Let’s make a comparison with the more mature Bitcoin mining machine market. After the surge in Bitcoin last year, mining machines increased in price, and even started selling futures. The prices were still very high, but there were still many people willing to enter the market.

In fact, many people participate in mining, but they do not necessarily calculate the current input-output. Today, some large miners are also involved in FIL computing power packaging, and we are more confident in this matter.

Then, in the field of Bitcoin, when the value of the coins produced by mining is not enough to pay the electricity bill, miners must shut down. But after the computing power of FIL is packaged, you will not consider the power consumption, because it only accounts for a small part of the mining cost. The main cost is mortgage and GAS consumption, so even if the price of the coin falls, its decline will not be as sharp as that of Bitcoin.

We all think that FIL is still in the initial mining stage, and the main network has only been online for 6 months. It is also a project born with a golden key in the blockchain industry, so we are still bullish overall. In fact, it is far from meeting our psychological expectations.

In addition, regarding Fliecoin, we are still optimistic about the field of distributed storage. We believe that the protection of data security and privacy is the inevitable direction of future technological development. Even if it has some technical difficulties that have not been overcome, it will definitely continue to develop. Looking at so many storage projects, if there is a project that will come out, it must be Filecoin, and it will naturally grow with IPFS. The cost of trial and error is not high, but the cost of missing is quite high.

The above guests will all attend the "Supercomputing and Fusion, 2021 Global Blockchain Computing Power Conference" held in Chengdu on April 17-18. If you are interested in Filecoin, you are welcome to communicate with them on site.

The registration link for the 2nd Global Blockchain Computing Conference: http://hdxu.cn/F1q52