As the end of the year approaches, the reasons and implications of the Antminer S9's continued survival

With the recent surge in the price of Bitcoin, many people have seen the investment opportunities in cryptocurrencies and have joined in on cryptocurrency investment. Of course, some people who pay attention to mining may have noticed that the S9 mining machine that everyone has been paying attention to before can still continue mining and generate income.

S9 mining data, electricity cost is 0.34 yuan (source: F2Pool)

Of course, according to the data from F2Pool, mining with an electricity fee of 0.34 yuan still has certain profits, and this electricity price is indeed relatively high. If the mining machine is abroad, such as in Central Asia such as Iran and Kyrgyzstan, then the electricity price may be lower and the profit will be higher.

The fact that S9 has survived until now is indeed a miracle in the mining industry. Of course, when analyzing the reasons for S9's survival, we also discovered many interesting things.

1. S9 has stable performance and is easy to modify and maintain.

Stable performance is the most basic feature of s9. The mining industry often has harsh conditions. Some mining machines are located in deserts with a lot of dust, and some are located next to hydropower stations with high humidity. This will affect the life of the mining machine. Because s9 has a simple structure and relatively small computing power, it has better stability, so it is indeed not easy for it to survive until now.

In recent years, as mining machine manufacturers pursue power consumption ratio, the main feature of a large number of newly produced mining machines is the increase in computing power boards and computing power chips on the computing power boards. The previous 13T s9 seemed relatively weak, but now a mining machine can easily have 70, 80 or more than 100T of computing power, and the design is compact. On the one hand, it is because of the space reasons of the mining farm, and on the other hand, it is also to reduce costs and power consumption.

Let's take a simple example. Under the same power consumption ratio, a 26T mining machine will definitely be cheaper than two 13T mining machines, because a mining machine not only has a computing power board, but also a shell, heat dissipation device, control board, fan, etc., which will be reflected in the price.

Because of the hashrate board and design, the circuit of S9 is simpler than that of current mining machines, so its performance is much more stable. At the same time, because the deployment volume of S9 is large, there are mining farms that have made certain optimizations for S9. After optimization, the power consumption of S9 will be lower, and the profit will be higher. However, the new mining machines have more hashrate chips, so the optimization space is relatively small, so people are less willing to tinker with them.

2. The price increase of electronic components at the end of the year has led to an improvement in the cost performance of S9

Due to the COVID-19 pandemic and the complex international situation this year, many international and domestic electronic component manufacturers have recently raised prices. According to the report of International Electronics Business, in the third quarter, various major electronic components were in short supply, which directly affected the current prices:

In Q3, many major international semiconductor manufacturers such as ST, TI, ADI, Intel, NXP, Infenon and other brands were out of stock of multiple models. Although the production capacity of these original manufacturers has been initially restored, the recovery speed on the demand side has exceeded expectations. In addition, these manufacturers' previous judgments on the demand side have tended to be conservative, and they have a wait-and-see attitude towards economic growth in the "post-epidemic era", resulting in cautious capacity expansion. Therefore, the extended delivery time and price fluctuations are difficult to be resolved in the short term. Industry insiders predict that the price increase trend may continue until the first quarter of 2021.

Excerpted from "Survey on Electronic Component Purchasing Behavior in Q1 and Q2" by International Electronics Business

The shortage of basic electronic components and semiconductors and the consumption of safety stocks have actually made it possible for currently produced electronic machines, including mining machines, to be in short supply or have high prices. As for the previous S9, since production has long been discontinued, most of the goods currently on the market are previous inventories and second-hand sources. Therefore, in this sense, the S9 appears to have a certain cost-effectiveness.

Due to the shortage of electronic components, if the price of electronic components continues to rise in 2021 as stated in the survey report, then this will lead to a wave of price increases for all mining machines in the mining industry. At present, we see that the new NVIDIA graphics cards are in obvious shortage in the market, which is why the difficulty of Ethereum mining has not increased significantly. This is restrained to a certain extent, but generally speaking, the safety inventory of electronic companies is basically one to three months, and in the third quarter, the market has actually shown shortages. Therefore, in the short term, manufacturers can hold on for a while, but basically at the end of 2020 and the beginning of 2021, they may face a wave of more obvious price increases, so s9 may continue to shine.

In this way, before the bull market comes, more miners may be more or less reluctant to give up S9, so that they can start mining under favorable electricity prices, and this seems to be a good way.

The revelation of S9 coming back to life

S9 is a typical case in the mining industry. On the one hand, it has a particularly long life cycle in the digital currency mining cycle. On the other hand, it has a great impact on the research and development of many mining machines. The simplest example is that S9 can have such a long life cycle. So for mining machines with a power consumption ratio greater than S9, will the life cycle of these mining machines also be long? Of course, this is also very likely.

We all know that there is the famous Moore's Law in the chip field, which means that the development of semiconductors is very rapid. However, as human exploration of the manufacturing process of silicon-based chips becomes increasingly difficult, Moore's Law seems to be gradually becoming invalid.

According to TSMC, they will produce advanced 4nm chips in 2022. Will 3nm, 2nm, or even 1nm continue to improve at the speed of Moore's Law? Obviously, this is impossible, because basic physics limits its development speed. TSMC's Morris Chang proposed a plan to "surpass Moore's Law" in 2000, but it has not shown much progress until now. Therefore, in the next few years, semiconductor progress will become increasingly difficult.

Similarly, the development of semiconductors will naturally lead to a slowdown in the progress of all technology industries, including cryptocurrency mining machines. Because of the close relationship between the power consumption ratio of mining machines and computing power, currency prices, etc., if we add PLANB's Bitcoin price model, then it can be basically assumed that the currency price may maintain a large degree of support in the future, or the life cycle of mining machines will be longer, which may be a good thing for the mining industry.