Exclusive interview with Kong Meng, founder of VeryHash: Liquidity is the cornerstone of free trading of computing power

From November 23 to November 24, a blockchain industry event was held in Shenzhen Bay. The "BEYOND-2020 Blockchain Industry Conference and Annual Awards Ceremony" exclusively sponsored by VeryHash and hosted by Lieyun.com and Lieyun Finance kicked off. At this time of the event, well-known media such as Lieyun Finance conducted an exclusive interview and special report on Kong Meng, the founder of VeryHash.

Kong Meng, founder of VeryHash

Lieyun Finance: Mr. Kong, please introduce yourself first.

Kong Meng: I am Kong Meng from VeryHash. VeryHash is a technology company that focuses on mining machine hosting and computing power trading. We have achieved low thresholds for mining and real-time circulation of mining machines by formulating mining standardization.

From November 2019 to now, the yield from buying mining machines has outperformed Bitcoin by 20%+, and the positive return on fiat currency is 10%+, which fully demonstrates that mining has better trading attributes than Bitcoin.

Buying a mining machine for mining in VeryHash is equivalent to buying a mining machine online. You don’t have to pay a deposit for electricity bills, and you are not bound by the amount. You can buy 1 T and sell it in 1 day. The mining farms we host charge electricity fees according to the actual computing power of the mining pool, and you can mine for only one day.

Gyro Finance: What are VeryHash’s current businesses?

Kong Meng: We have only done one thing from 2018 to now, which is to improve the liquidity of mining machines. Because the overall market value of mining machines is very large, about 10 to 20 billion. However, the investment threshold for all users is very high, and the transaction frequency is very low.

Transaction frequency is very important. When I founded VeryHash, I asked myself a question: What if I only want to mine for one day? We actually proposed a solution around this problem.

veryhash.com

The first is standardization.

Because BTC is a tradable asset, a BTC in a wallet is a BTC, and it is easy to confirm ownership. Mining machines are also easy to confirm ownership, but the most difficult thing about mining machine standardization is its stability. The platform must ensure that users have stable income, not random income. It is equivalent to buying a mining machine for users, and it has to pay dividends every day, and this dividend is unstable. For investors, it is difficult to calculate the income.

VeryHash is about ensuring stable income distribution. Now we can basically guarantee that S19 will distribute income at 95%. We deduct an insurance premium, which is equivalent to full coverage of auto insurance. If there are any risks of mining machines, mining sites, mining pools, operation and maintenance, and repairs, we will use the pre-deposited insurance premium to compensate users, ensuring that users will receive 95% of their income.

After solving the liquidity problem, we built a computing power trading cloud, which directly connects mining machine transactions to computing power-related platforms such as cloud computing power, mining pools, and exchanges. Without too much investment, platform users can freely buy and sell mining machines.

As for what we will do in the future, the first thing is to cooperate with other financial platforms to develop some financial products based on mining machines, for example, dual-currency financial management products similar to mining machines.

Second, we will launch futures products for mining machines, and short-term cloud computing products will be launched together with futures products. Three months of cloud computing power, combined with three months of delivery contracts, will hedge the user's risk. This is the direction of VeryHash's future business. That is, mainly based on the liquidity of mining machines to iterate more trading derivatives.

Gyro Finance: Why did you choose to trade mining machines?

Kong Meng: We divide investment behaviors into three types: long-term investment, medium-term investment, and short-term investment.

In terms of long-term investment, mining machines will definitely not outperform BTC. However, they can outperform in the medium term. We have done many data backtests. For example, from January to June 2019, the S9 mining machine increased by more than four times. If a person buys an S9 mining machine, taking into account the increase in the S9 mining machine and the income in these six months, he will get about six times the income.

In addition to mining income, we should be able to enjoy the premium income of mining machines. I hope users will pay more attention to the price of mining machines rather than the income. When we provide liquidity, short-term income can be higher, but when this scenario did not exist before, people would not consider this scenario.

This is why we want to trade mining machines. We don’t want to treat mining machines as a financial product. Even if it is to educate the market, it is better to return the power of buying and selling to users. This is why we want to trade mining machines.

Interstellar Super Brain IPSB: I just heard you talk about quantitative trading of mining machines in your speech. How is this done?

Kong Meng: We are connecting more exchanges, hoping to bring in more liquidity.

In fact, the purpose of buying is to determine the direction, because it is bullish. I hope it can be sold at a better price, or the price does not rise, but there is mining income every day, and it is profitable to sell at a flat price. As long as the mining machine is bought at the right time, it will make money if the market is flat, and it will make money if the market is rising. It will only lose money if it falls. Therefore, its probability is actually higher than that of pure holding coins.

Mo Engine: What is the computing power trading cloud you just mentioned?

Kong Meng: When we provide standardization and solve liquidity problems, we actually hope to educate more users. In fact, from the perspective of financial products, if we want to expand the pie, we have already integrated the upstream, and we hope to integrate the exchange.

The mining machine itself has value, and its value is given by Bitcoin and Ethereum. It has value but no liquidity, but we have solved the liquidity problem.

We are now targeting all second-tier exchanges. If you want to rise to the first-tier exchanges, you still have to solve the mining problem, or do cloud computing, buy mining machines, and build mining pools, which all require a large amount of investment.

We provide the simplest solution, which is to list mining machine trading pairs so that users can also buy mining machines. This is a very good way for exchanges.

We integrate some resources in the mining circle and integrate some of the currency circle through the exchange cloud computing power. This is the core of our computing power trading cloud, helping them lower the threshold and achieve a win-win situation.

Soso Coin: What are your thoughts on financial derivatives in the mining industry?

Kong Meng: The premise of all financial derivatives is that we must provide liquidity. Liquidity is a basic thing. For all assets to develop, liquidity is something that cannot be circumvented.

Based on liquidity, the first thing we can do is futures. Now mining machine manufacturers are selling futures. We can do the futures market. The second thing we are thinking about is whether we can do a dual-currency financial management of mining machines. This is our first derivative ecosystem. After spot and futures are up, we will build some more stable quantitative models.

From a product perspective, we will focus on spot and futures in the future.

Lieyun Finance: It is said that the mining farms in Kazakhstan are quite popular now. Do you recommend foreign or domestic mining farms?

Kong Meng: We are currently choosing domestic mines, but the stability of foreign mines is much higher than in the past two years, including some mines in North America and Kazakhstan. In fact, various countries, such as Iran and Russia, actually have some relatively stable mines.

From the perspective of risk control, we prefer to cooperate with domestic mining farms, because for us, the mining farm is a cold wallet for mining machines, and we need to ensure the safety of assets. In a country with relatively sound laws, it is relatively stable.

I think this thing itself does not distinguish between domestic and overseas. It’s just that from the perspective of our enterprise, going overseas will be more risky because risk control is difficult. In addition, we have very high requirements for the stability of mining machines. The online rate of the VeryHash platform mining farm remains above 95%. This also provides users with stronger protection.