Miners are facing the most difficult situation in history. Is GPU mining the only way out?

In this world, there really is "pie in the sky". Of course, it's not the kind of pie that is full of traps that everyone often talks about, but a real pie made of real money.

On September 17, at the China Mining Tour Xiamen event, the organizer Lieyun Finance quickly formed an event group to distribute the grand prizes.

As time went by, more and more lucky winners were born. Some won 30,000 yuan of convertible modern gold coupons, some won the BEYOND Summit booth award, and some received generous cash red envelopes.

After the grand prize was drawn, the words "Support Lieyun, Lieyun is awesome" dominated the entire screen! The atmosphere was very enthusiastic, and for a moment, it seemed as if we were in a bull market.

But, apparently, that is not the case.

01

Bitcoin miners only get soup

Since the March 12 crash, Bitcoin has been rising slowly amid fluctuations. Perhaps it is more appropriate to describe the current market as a slow bull market. This view coincides with the views of the guests on the scene. F2Pool CMO Qingqing said that the current market is a slow bull market.

Xue Jing, editor-in-chief of Lieyun Finance, also added that bull market and bear market are relative. What you see as a bull market may very well be a bear market in the eyes of others. Only by grasping the situation well can you have your own bull market.

Bitcoin Trends in 2020

September, which is about to pass, is a month of "bull and bear intersecting" for different miners.

On the one hand, according to data provided by Apatheticco, DeFi liquidity mining is very popular. In the first half of September alone, the ETH on-chain transaction fees were approximately US$96.4361 million, accounting for 58% of the mining income of Ethereum miners.

This allows ETH miners to eat big chunks of meat and drink big gulps of wine, but it is too difficult for Bitcoin miners, who can probably only drink soup.

According to OKLink data, the total network computing power increased from about 123EH/s at the beginning of the month to 135.36EH/s on September 23. Although it did not reach the peak of 140EH, it still maintained an ultra-high level, and the difficulty of Bitcoin mining has now reached 19.31T. What is even more worrying for miners is that the increase in mining difficulty continues. According to BTC.com's forecast, after the next adjustment, the total network difficulty may reach 20.79T, an increase of 7.65%.

As for the reasons for the increase in computing power, a senior Bitcoin miner told Lieyun Finance that, first, the dry season is approaching, and miners are taking advantage of the last time to start up old machines, causing the computing power to increase; second, the entry of new machines; and third, some mining farm machines that have been powered on and started up have been put on the shelves one after another.

He also said that due to the epidemic and the Bitcoin halving, many mining companies have been shut down one after another, and some miners have also left the market. The companies or large miners that survived are basically those that have been in business for a long time and have a relatively mature industrial chain. However, competition among the existing markets will become more and more intense.

02

The computing power will drop significantly

However, some miners are not so pessimistic. The reasons they give are roughly as follows: "With the arrival of the dry season, competition in the stock market will not intensify, because some machines will be shut down during the dry season, which will reduce computing power."

Li Peicai, founder of Shanghai Waiyi and vice chairman of 100P Computing Club, also said that there will be several trends in this year's dry season: "First, machines with more than 60 watts can only be shut down during the dry season; second, the production capacity of new machines this year is not high, and the cost of new machines remains high; third, from a general perspective, new miners entering the market from abroad are changing. Europe and the United States have a large share of new machines, and many large mines have also been built. Mining overseas has become a trend."

Chen Lei, founder of BitBlueWhale and member of 100P Hash Power Club, holds a similar view. He said that during the entire flood season, even if the hash power has been increasing, the old machines are still filling the load, and the new machines are only increasing in small batches. In the dry season, the million-level old machines will not move north, and the production capacity of new machines is also very limited, far from enough to fill the hash power lost by the withdrawal of old machines. Therefore, it is foreseeable that the hash power will drop significantly.

If the future development is really as Li Peicai, Chen Lei and others said, the computing power will decline during the dry season, then is now the time to enter the Bitcoin mining market?

Jiang Tao, an 8-year veteran Bitcoin miner, said in response to a question from Lieyun Finance that today's mining industry is no longer suitable for small investors. He pointed out that the early dividend period of Bitcoin mining has long ended, and the current electricity prices are rising, and there are many pitfalls in mining.

03

Where is the future of miners?

At present, traditional capital has entered the Bitcoin mining market, and there is no longer any opportunity for small investors to enter the market. The mining industry is moving towards financialization, specialization, and scale.

Bitcoin miners are called traditional miners and are considered the "front wave" by many latecomers.

“The waves behind the Yangtze River push the waves in front of them, and the waves in front of them die on the beach.” In order to avoid the fate of “death”, the waves in front of them really tried their best.

According to media reports, a miner recently took a different approach and used the government’s supercomputer to mine. Although he eventually escaped jail time, he lost his job after the case was exposed. His earnings from mining for a month were less than $10,000.

Some miners also said that they are currently adjusting their tracks. "The price of mining machines is greatly affected by the market. Under a not-so-good market, the profits of miners and mining companies will be greatly reduced. As the payback period of Bitcoin mining machines is getting longer and longer, the popularity of Ethereum mining is increasing, so we will focus on deploying Ethereum graphics card mining in the future."

But is graphics card mining the only way out?

Industry insiders said that if conditions permit, you can certainly deploy graphics card mining. Although the cost is higher than the previous ones, there is still room for appreciation. In addition, you can also make fixed investments in mainstream currencies and play around with DeFi. There is only one prerequisite, that is, you must understand the investment and don't make investments that you don't understand.

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