|
In April 2021, Babbitt and Biyin jointly hosted the Second Global Blockchain Computing Power Conference in Chengdu. Unleashing new imaginations for the mining industry and gathering new trends in the mining industry, this 48-hour event will undoubtedly witness a new era for the computing power industry. At that time, Biyin CEO Pan Zhibiao accepted an exclusive interview with Babbitt and answered 9 hot issues raised by Babbitt on the development of mining. Let’s take a look. 01 This is probably the most glorious moment for Bitcoin mining. Looking at the future from the present, what do you think about the development trend of mining in 2021? A major framework trend is institutionalization and capitalization. The industry will become more and more concentrated, and the proportion of retail investors will become smaller and smaller. In the past, they might have bought dozens or hundreds of units, but now they often buy 500 or 1,000 units, and the transaction funds are tens of millions or even hundreds of millions of RMB. The investment cycle of these institutional funds is usually 3-5 years, and their risk tolerance, use of financial instruments, and understanding of Bitcoin as a financial product are far stronger than those of traditional miners. This will further raise the threshold of the mining industry. Of course, this will also create new market opportunities. For example, Biyin Cloud Computing can provide services for purchasing physical mining machines online. The market volume will not be large and may be a long-tail demand. 02 US listed companies are transforming in a high-profile manner and frantically purchasing mining assets. Will the situation of China and overseas in the computing power industry change? Will China's status be reduced? In the production process of mining machines, Samsung and TSMC machines produce chips, and complete machines are made in Shenzhen. This production supply chain has always been in Asia, or more precisely, in China. This will inevitably give Chinese miners priority in investment in this field, and will be more sensitive. Now, with institutions entering the market to buy Bitcoin, such as Grayscale and many US listed companies, when traditional industries are struggling to do business, the transition to mining has brought about a relatively good increase in stock prices, which will trigger more listed companies and institutional investors to enter the mining industry. Previously, people believed that 70%-80% of the computing power was in China, but this proportion will gradually decrease. North America's computing power may reach 20%-30%. We have dropped to 40%-50%. This is actually beneficial to Bitcoin, because the underlying infrastructure of computing power is more decentralized, which will reduce regional risks. For example, when computing power is sufficiently decentralized, the influence of policies in some regions on the industry will decrease. 03 It is reported that Inner Mongolia has completely shut down all Bitcoin "mines" in order to achieve the "carbon neutrality" goal. Will this seriously deal a blow to China's computing power industry? The electricity market is an open, market-based market where you can buy electricity and power generation groups can sell electricity. Everyone trades on a comprehensive electricity trading platform. I haven't read the original document, but I've seen news reports about carbon neutrality, and I don't think it has much to do with Bitcoin mining. Carbon neutrality is a matter for the entire industrial chain. If electricity is generated by burning coal, provinces and cities may start by reducing high-energy-consuming enterprises when controlling carbon indicators. If the mining circle consumes more high-energy-consuming thermal power, it is likely to be affected. In China, Xinjiang and Inner Mongolia both use thermal power as the main source of electricity, supplemented by some solar and wind power. However, the proportion of clean energy in Sichuan is significantly higher. During the flood season, a large amount of energy comes from clean energy, so Sichuan's policies have been relatively stable. Inner Mongolia's carbon neutrality is not aimed at Bitcoin mining. It does not consider mining to be illegal. It is a matter of carbon neutrality and a result based on longer-term planning. 04 We say that 2021 will be a year of dramatic changes in the industry. What do you think about the opportunities in this industry in 2021? I think there are a lot of opportunities. For example, the simplest opportunity for ordinary investors is to invest in digital currencies, which will have a good return on investment. As the price of coins rises, it will bring about a "sunshine" effect. In this industry, whether it is mining or financial service derivatives, I think there will be good investment opportunities and everyone can make money. This is a result of the overall environment. As far as the mining industry is concerned, I think finance will be a direction, such as providing hedging services based on digital currency for miners to reduce the risk of currency price fluctuations for miners. For example, digital currency financing services can expand the investment scale of the mining industry. These can earn investors higher profits in the rising cycle. Once the market falls, it will of course bring greater risks. Business operations must grasp new market demands, cannot stick to traditional business lines, and should embrace new opportunities. 05 Will China's mining companies enter the capital market such as A-shares? At present, several companies in the industry are mainly focused on entering the US market. In the US, companies like Tesla have purchased Bitcoin, and Grayscale has custody of a large number of customers' Bitcoin. In other words, only in such an environment with full support from accounting, auditing, and law can companies have the opportunity to participate. If cryptocurrencies cannot be included in the balance sheet, companies cannot do this because the risk of illegality and non-compliance is very high. Chinese companies' demand for financing from U.S. stocks should also be due to their appreciation of the relatively legal and compliant conditions in the U.S. environment. The domestic market is not completely clear in terms of policies and regulations. In the absence of complete auditing, finance, and bank custody, it is not very likely that companies will be able to do this. Even in Hong Kong, there are very few companies doing mining like in the United States, and there are only one or two companies doing some marginal businesses. This is because it does not have such soil under this general background. We see a lot of funds coming in, but when it comes to seeking to go public in China, the window of opportunity is still relatively small at the moment. 06 What is the mentality of miners at present? What do you think are the risks of the industry in 2021? Some people like high risk, some like low risk. Some people will sell some coins to pay for electricity when the price of coins rises, and make a profit at the same time. Others are willing to hold coins, and keep the rest after selling the part for electricity. The old miners believe in Bitcoin more and will hold more Bitcoin. New investors prefer fiat currency and are good at measuring investment behavior from the perspective of fiat currency. Therefore, they think it is good to make some money with fiat currency and tend to sell coins. There are two risks in the market in 2021: The first is the risk of the power market. You must legally attract investment, establish industrial parks, and make invoices and taxes legal and compliant before you can do such a thing. For example, in Sichuan, the provincial government, the Development and Reform Commission, the Economic and Information Commission, etc. have issued a series of legal and compliant documents to guide enterprises to complete such an investment behavior, so you must optimize the business environment of such a place. The second is the risk brought by the price of the currency. Don't be too optimistic. Don't pursue high profits when there are certain lucrative profits. Once a large retracement occurs, it may bring risks. There is no market that only rises and never falls. Control the risk and control the leverage. 07 What are Biyin’s plans for 2021? The earliest business line of Biyin is Biyin Mining Pool, and we will continue to strengthen this business line and provide high-quality services to the miners. The Biyin financial business we carry out under Biyin Singapore will provide supporting financial services for everyone, such as increasing leverage to make more money, or providing derivative tools to reduce everyone's investment risks. Biyin Cloud focuses on the long-tail small and medium-sized market. In today's situation where it is difficult for retail investors to enter the market, we use an online platform to allow everyone to enjoy the preferential electricity prices and hosting services of professional mining farms when purchasing 1 or 5 mining machines. 08 What advice do you have for practitioners in 2021? First, you must be patient and have confidence. The market has just entered the bull market track. From the perspective of investors, don't get off too early; Second, when you are confident, you must pay attention to risks. Don't be overconfident. Don't think you are a stock god when you make money. Now you need to be bold and careful. The decline in the past few days is just a short-term adjustment. There should be another wave of market in the future. If you are very happy to make a lot of money and continue to leverage, then a callback may wipe out everything. Only by looking at the entire investment process calmly and rationally and maintaining a good attitude can you survive the bull and bear markets. 09 What are your expectations for the 2nd Global Blockchain Computing Conference? Babbitt and we jointly host this event, which is a strong combination in terms of brand. We hope that the conference can cover more people and attract high-quality investors to learn about the industry. These new investors or institutions can bring their expertise in their original industries to our industry. We hope that more professional people can do more professional things, thereby injecting new vitality into the industry. This is a very serious and high-quality conference, which will inject new vitality into the industry and bring in new professional talents. It will enable the industry to develop more compliantly, healthily and rapidly. |
![[Roundtable transcript] The evolution of GPU, FPGA and ASIC mining from the dominance of HNS and other mining coins](/upload/images/67e6b9df076a3.webp)
