Ten Years of Mining: What is Mining? What are the pitfalls of physical mining machines and cloud computing power?

This article aims to popularize common sense and pitfalls in the mining industry.

With the popularity of blockchain in recent years, many people have been exposed to blockchain and digital currency, the most representative of which are Bitcoin (BTC) and Ethereum (ETH). This article mainly introduces the mining of these two digital currencies.

How to obtain Bitcoin and Ethereum?

Currently, there are two main ways to obtain Bitcoin and Ethereum. The first is to purchase them directly with legal currency on a digital currency exchange. The second is “mining,” which is currently the only way to obtain Bitcoin and Ethereum at a low cost.

What is Mining?

In order to make it easy to understand, I will not use the official language. Mining is to mine digital currency through special mining machines, such as the latest models of Bitcoin mining machines: Shenma M30S++, Ant S19Pro, Avalon A1166Pro, Xindong T4+, etc. These mining machines are the latest models of mining machines on the market, with low power consumption, high computing power, and high coin production.

Most Ethereum mining machines are GPU-assembled mining machines, and there are also AISC chip mining machines, but on a smaller scale. There are several types of mining machines: GPU-assembled mining machines such as A-card and N-card, and AISC chip mining machines such as Antminer E3, Innosilicon A10Pro, Shenlang B1, B3, Grayscale E3, etc. Mining is to mine Bitcoin and Ethereum through the above dedicated machines.

Several ways of mining

1. “Just buy a mining machine and mine at home

But!!! Many people are confused after buying a mining machine. There are a few things to pay attention to when buying a mining machine:

Electricity bill: As we all know, household electricity is calculated according to a tiered system. Currently, household electricity is basically 0.58-0.62 yuan per kilowatt-hour. The more electricity you use, the higher the bill will be in the future, and the benefits will become less and less.

Noise: The noise of the mining machine is very loud (if you have no idea about the noise of the mining machine, you can watch the video below). If you place it at home, you need to find a way to isolate the noise and not disturb others...

Maintenance: Mining machines need to run 24 hours a day, and the wear and tear is very large. The average life of a mining machine is basically 2-3 years, and this is based on very good maintenance of the mining machine. The operating environment of the mining machine must be ventilated and dust-free. In addition, the temperature is also very important. If the temperature of the mining machine is too high, there is a lot of dust, and there is no ventilation, the life of the mining machine will be greatly reduced. If the maintenance is not good, it will basically break down in about half a year to a year and a half, and you may not be able to recover your investment by then.

Maintenance: Problems are bound to occur during the operation of the mining machine. If you do not know how to repair it at home, it is not recommended to do so. Because if the mining machine is damaged or stops mining, you need to find a professional maintenance person to help you repair it. During this period, you will waste a lot of time, looking for someone - send it for repair - maintenance period - send it back after repair - debug on the machine and connect to the mining pool. This period of time will undoubtedly waste your huge time cost.

Finally, you have to think about how much extra cost you will spend during the above period. So do you think the cost of digging at home is low?

2. Mining Machine Hosting

Advantages: No need for self-operation and management, which saves you from the thorny issues of "electricity bills, noise, maintenance, and repairs when mining at home". You only need to prepay the electricity bill and management fee on time.

Since they do not have the ability to operate and maintain the mine themselves, it is unlikely that they will send someone to the mine for operation and maintenance. The operation and maintenance are all left to the mine. There are all kinds of pitfalls here. I will pick a few typical ones to introduce.

There are also the following risks:

Power outage at mining farms: mining farms generally require regular inspection or maintenance, and a 1-2 day inspection period a month is normal. However, there are also many small and medium-sized mining farms that use the excuse of power outages and other maintenance as an excuse to steal users’ computing power for their own mining.

Replacement of accessories: Some mining farms may use bad things to replace your good things, such as hashboards, power supplies, or even whole machines. If it is a new machine, these are some common hidden risks.

Operation and maintenance capabilities: The operation and maintenance capabilities of the mining farm are also something we should focus on. Operation and maintenance capabilities are mainly reflected in risk prevention, exception handling and response time. If the mining machine is poisoned, the inferior mining farm has no good solution and cannot do a good job of network isolation. If some mining machines are poisoned, without network isolation, the income cannot be guaranteed.

Falsely reporting power consumption: The official website of the mining machine manufacturer will have the power consumption data of the mining machine. The actual power consumption is affected by environmental factors such as temperature, so the power consumption data given by the official is also a range. This provides convenience for some unscrupulous mining farms to falsely report power consumption. Some unscrupulous mining farms take the opportunity to report 5% or even more power consumption and charge users more electricity fees. For example, the actual power consumption of the mining machine is 3000W, but the power consumption is calculated as 3200W. This link is not transparent to users and it is very easy to fall into traps.

When choosing a mining farm for hosting, it is important to do research before hosting. In summary, the following points need to be examined:

1. Choose a mine that is compliant and has low operating risks

2. When choosing a mine, you should consider both the safety of the site and the convenience of transportation.

3. The electricity price and stability should be considered as the key factors, and the decision should be made based on the situation of the mining machine.

4. Mining farm network and temperature control and other infrastructure

5. The scale, reputation and operation and maintenance level of the mine

It is difficult for novice miners to have systematic inspection capabilities. For these miners, it is recommended to choose a joint mining service provider with a long operating history, large scale, great reputation and good reputation. However, due to this, high-quality mining farms also have certain scale requirements for hosting machines, with a minimum of 500,000 yuan and a maximum of millions of yuan.

If you do not do any screening when selecting the ore and host the mining machine in some bad mines, it is inevitable that you will fall into the trap. It can even be said that you have been cheated the moment you choose the inferior mine, but the "breakout" has not yet occurred.

3. Cloud Computing Power

Cloud computing power (also known as cloud mining) can theoretically achieve a win-win situation between cloud computing power platforms and users. Usually, large mining farms provide computing power rental and sales services. Users can earn digital currencies mined by the corresponding computing power by purchasing computing power contracts. This saves the cost of purchasing and operating mining machines, as well as the various problems of hosting and personal mining mentioned above. Cloud computing power mining greatly reduces the investment threshold for mining. The platform can also lock in profits in advance and reduce risks.

Because the mining machines and mining farms are owned by the platform, the maintenance, upkeep and repair are all handled by a professional team, and users who purchase cloud computing power are only responsible for collecting coins and checking the status of the accounts every day.

The biggest advantage of cloud computing power is that it can mine digital currencies stably 24/7/365 without any problems such as power outages, mining suspensions, repairs, and maintenance. However, the price of cloud computing power is slightly more expensive than that of mining machine computing power. However, on the whole, this computing power gap has been compensated by the income from non-stop operations throughout the year, and the output is much higher than that of mining machines.

So what are the risks of cloud computing?

1. Fake Platform

Some unknown platforms, which do not have actual mines and mining machines to support them, deceive people under the slogan of creating mines. After a period of time, they run away with the funds. Such fraudulent companies usually shout slogans such as "high returns" and "low requirements", and investors are advised to open their eyes and distinguish them carefully.

2. Shutdown price

The shutdown price refers to the price of the coin when the output is equal to the electricity cost or the output is not enough to offset the electricity cost of mining. It can also be understood as the mining cost price of mining Bitcoin or Ethereum. If the coin price falls below the shutdown price, mining will be at a loss.

For example, if the cost of mining a bitcoin is 50,000 yuan, if the price of bitcoin is lower than 50,000 yuan, then the output from mining is equal to the electricity cost and there is no profit, or 0 profit, then you need to shut down the machine to stop the loss.

Summarize:

The market opportunity of cloud computing power mining is that it provides individuals with a more "neutral" investment method, with a lower threshold than self-built mining farms, lower risks than short-term operations, and lower costs than market price purchases; it also allows mining farms to share costs and risks and obtain more ample cash flow. The main risk of cloud computing power lies in the authenticity and stability of the platform behind the contract. Some small and medium-sized mining farms often have power outages and unstable computing power, so you must do relevant inspections to avoid falling into the trap.

In this regard, as a two-year veteran miner of cloud computing power, we have layouts in multiple domestic mining farms in "Yun", "Guizhou", "Sichuan", Gansu, Xinjiang, and Inner Mongolia, providing real and stable computing power supply. All miners can choose a reliable cloud computing power platform based on their own understanding. Author (wabtc)

Finally, I hope everyone can make more money and avoid pitfalls!