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This article was originally written by Tony from IPFS Force Zone Continue with "Mining Machines or Computing Power: How to Break Through Filecoin? (Part 1)" . So in such a chaotic market, how can we boldly invest in Filecoin? Market investment wave: mining machines or cloud computing power? Since the Bitcoin mining industry, there have been two ways of investing in mining: mining machines and cloud computing power. The same is true for Filecoin. So what is the difference between these two? Simply put, it is the difference between a landlord and a second-hand landlord. A mining machine means that I bought the entire mining machine and own the ownership of the mining machine; cloud computing power means that I rented all or part of the mining machine for a certain period of time and obtained the income for that period. (Figure 6) Mining machine hardware, source: new.qq.com, 2020-06 Mining machines are customized computers used to earn crypto assets. These computers generally have professional mining CPUs, GPUs, memory and other hardware. Early Bitcoin mining machines mostly used proof-of-work methods that burned graphics cards, which consumed a lot of power. Users mainly run software on mining machines and then run specific algorithms. After communicating with remote servers and completing tasks, they can obtain corresponding crypto assets. This is one of the ways to obtain BTC, ETH, Fileocin, etc. Compared with purchasing mining machines, cloud computing power is to split the total computing power of mining machines into independent units. Users purchase a part of the computing power of a single mining machine for mining. Usually, large mining farms provide computing power leasing services. Users can earn digital currencies mined by the corresponding computing power by purchasing computing power contracts, saving the cost of purchasing mining machines and the cost of mining machine operation and maintenance. (Figure 7) Mining machine VS cloud computing power, source: IPFS Force Zone, 2020-07 In Filecoin, cloud computing power is divided into two forms: one is simple clustered cloud computing power, and the other is mining pool cloud computing power, which can be understood as shared mining machines/mining pools . Simple clustered cloud computing power mainly involves many single mining machines being managed together. The mining farm and the hardware are independent. The cloud computing power sold by splitting the single T computing power of the mining machine is similar in concept to the split concept of Bitcoin. Mining pool computing power is concentrated in a data center. All hardware is uniformly arranged through planning. All equipment is closely linked and communicates internally. It has good network conditions and rarely has storage bottlenecks. All equipment is under unified management. All levels have fault tolerance protection and stable operation. (Figure 8) Mining pool cloud computing power, source: Hu Feitong’s public account (ID: gh_0a0825484600), 2020-04 The main difference between the two is the difference in computing power allocation. Simple clustered cloud computing power is the patchwork management of a single mining machine. The computing power for distributed revenue may be N (the computing power purchased by investors)/the total computing power of the mining machine or N (the computing power purchased by investors)/the total computing power of the mining farm ; the computing power of mining pool cloud computing power is N (the computing power purchased by investors)/the total computing power of the mining farm . So the difference between the two is: The threshold difference. The threshold for cloud computing power is lower, and users can purchase it with a single terabyte of computing power according to their investment preferences; while the starting price for mining machines is a single mining machine, and the investment is higher than that for cloud computing power, including a lot of hardware, and the matching requires at least dozens of terabytes. Differences in costs and energy. For mining machines, investors need to spend money and energy on site layout, operation and maintenance, electricity bills, etc. to maintain their own mining machines. There will be different "pitfalls" in the operation process. Once a "pitfall" is not grasped correctly, it may directly affect the subsequent income. After purchasing cloud computing power, investors only need to pay a certain management fee. The management fee is mainly paid in advance or paid in the later period. The risks are different. Once you start mining Filecoin with a mining machine, you can only sell the mining machine hardware to exit; while some cloud computing power systems will protect investors, and some systems indicate: fill the effective computing power period, extend for one year if the investment is not recovered in the first year, and refund if no profit is obtained. In the final analysis, investors still have to look at the technical capabilities of the miners, because many of these terms that seem to protect investment are marketing methods to seize the market. Ownership is different. Buying a mining machine means buying ownership; while buying cloud computing power means leasing cloud computing power for a certain period of time, with no ownership, only profit income. Liquidity. The exit of mining machine investment may require more considerations, including mortgage mechanism, exit approval, mining machine sales, etc.; while cloud computing power can choose whether to continue to participate after expiration, and its liquidity is relatively simple, including early participation and later exit. Operation and maintenance adjustments. Once the official participation rules are adjusted, mining machine investors may need to find an operator to adjust the computing power and pay additional fees; and because the income from cloud computing power is tied to the mining pool, it generally includes operation and maintenance services, so there is no need to worry about it. In addition to the above mining pool types, there is also a distributed mining pool concept. Distributed mining pools contribute to distributed storage networks by utilizing idle resources in society, providing computing, storage, network and other unified management equipment across networks and regions, and decentralizing storage of a large number of tasks. This method can be used to access existing external equipment, and is particularly suitable for providing services to individuals or other entities. Distributed mining pool service providers have less investment and mainly make profits through services. (Figure 9) Distributed mining pool, source: Hu Feitong, 2020-04
At present, the technology is not very mature, and there are no companies selling distributed mining pool business in the market. At the same time, how to deal with official standards also needs to be explored step by step, but the future is promising. Sharp eyes: How do we identify hardware devices? There are many accessories for mining machines, mainly including CPU, SSD, hard disk, GPU, memory, motherboard, network card, display card, board connector, radiator, etc. The following is an analysis of the main hardware, including CPU, SSD, hard disk, GPU, and memory. The mainstream hardware configurations on the market are as follows: CPU: AMD 3960x/3970x, 3990X GPU: 1060, 1080, 1080Ti, 2080, 2080SUPER, 2080Ti SSD (solid state drive): 1T/2T*NVMe (Figure 10) Hardware performance comparison of the Fiecoin community, source: filecoin.io, 2020-07
The above are some suggestions on CPU given by the official Protocol Lab through the community . According to official information and the experience of miners' testing, multi-core, high-frequency CPUs will greatly accelerate the storage packaging process. The performance of the CPU determines the growth rate of the computing power of Filecoin mining equipment. The more powerful the CPU, the faster the computing power of Filecoin mining equipment will grow. In fact, both AMD and Intel processors can help storage miners submit packaged calculation results to the network as quickly as possible. However, the latest experiments conducted by Protocol Labs themselves show that AMD processors with SHA are much better than other processors. The community announced the use of AMD 3960x, but some mining machines are already using AMD 3970x. As previously noted, Protocol Labs (and others) have found that AMD processors with SHA extensions accelerate this process to a considerable degree. As mentioned earlier, Protocol Labs found that AMD processors with SHA (hash encryption algorithm) extensions have a significant advantage over other processors. Source: Filecoin Official Blog Mining Guide A Guide to Filecoin Storage Mining Currently, mainstream mining companies on the market, such as Force Zone, use AMD architecture processors. Before the advent of GPUs, basically all information processing work was done by the CPU. After the GPU came out, because the two have certain differences in processing, they can be finely divided: the CPU is responsible for highly logical transaction processing and serial calculations, while the GPU focuses on executing highly threaded parallel processing tasks (large-scale computing tasks). It can be seen that the CPU is the "master" and the GPU is the "slave". No matter how fast the GPU develops, it can only share the work for the CPU, not replace the CPU, so the same is true for Filecoin mining. GPU assists miners in completing SNARK calculations within a strictly limited time. The main role of GPU in Filecoin is to generate "proof of replication". Protocol Labs will also explore the use of GPU in other parts to provide greater flexibility, because GPU makes certain calculations faster, cheaper, and more technically logical than CPU. The current client Lotus supports NVIDIA chips and 1080 and 2080 series GPUs; the team is testing more GPU models, and the official hopes to support more chips from other manufacturers in the future. During the testnet phase, many miners may use multiple graphics cards on a single server to shorten the time to generate replication proofs in order to compete for computing power rankings. After the mainnet is launched, in order to control costs, generally only one graphics card is used, otherwise the payback period will be prolonged. SSD function: The system processor transfers program data from the SSD to the memory for short-term access and use. Because solid-state drives have instant data transfer speeds and can help speed up the data transfer process, SSDs are used as system disks, large caches, and for storing unsealed sectors in transit in Filecoin mining machines, as Filecoin node data storage disks, etc. With the development of the network, the space required for the storage disk of Filecoin's node data may become larger in the future , and the main network launch requires 32GB sectors. The sealing process will increase the occupancy rate of SSD space. In the future, SSDs with larger memory may be needed. At the current early stage, 512G may be enough. The main functions of memory are: temporarily storing sealed files; running each link of the mining program, calculating data cache usage. Memory is a data "highway" that connects the hard disk and the CPU. The improvement of memory can increase the sealing speed to a certain extent. At present, the mining market mainly uses 128G/256G/512G. Some miners even increase the memory in the test network for ranking. Some manufacturers' storage servers participating in the test actually use 1T or even 2T memory bars, which is not reasonable for individual investors. Hard disks are only a medium for storing data, and they are not the only factor in mining. How much data is stored is affected by bandwidth, hardware facilities, operation and maintenance, mining machine layout, etc. As a miner, the more effective data is stored, the greater the profit. Compared with the POC consensus mechanism, its data hard disk mining is based on who has more hard disks. Whoever has more hard disks can mine more. The PoST consensus does not care about the hard disk, but only focuses on the amount of data stored in the hard disk. During the mining process, parameters and plans may be continuously adjusted to mine more effective storage and obtain Filecoin. In addition to some important equipment, we also need to refer to the manufacturer's operation and maintenance capabilities. The key indicators for measuring the operation and maintenance capabilities of Filecoin mining can be referred to as follows: Rich R&D experience. The operation and maintenance team needs to have been deeply involved in Filecoin for a certain period of time and have rich technical R&D experience. They can make contributions by improving some technical details, hardware equipment (number of hard disks), mining farms and mining pool implementation methods, etc.
Management costs and revenue cycle: On the test network, many computing power rankings require high costs. For investors, it is unreasonable to make inferences based on the equipment investment in the test network. Therefore, a good operation and maintenance team will reasonably plan how to configure the hardware to maximize revenue, which is a reference standard.
Network stability: It is also necessary to achieve network stability through some technologies, hardware (whether hot plugging is supported), etc. Otherwise, there will be economic penalties due to network instability.
The test network performed well: Although the test network results cannot clearly show the actual ranking after the main network is launched, they reflect the technical strength of many manufacturers to a certain extent. The manufacturers that will truly rank top in the future may be on the list of those participating in the test network competition.
In addition, we also need to examine the financial strength of the team , which depends on R&D investment, computing power competition, cluster layout, etc. If there is no large-scale technical team, there is a high possibility of pseudo miners/cloud computing power or channel dealers. As Warren Buffett once said, there is no formula to determine the true value of a stock. The only way is to thoroughly understand the company. This also applies to investing in Filecoin. Look for companies that truly do technology , and don't be blinded by the exaggerated marketing methods on the market. The Planet Daily pointed out that the market price of Filecoin mining machines is generally divided into three levels: high-end mining machines of 200,000 to 300,000 yuan, mid-end mining machines of 60,000 to 130,000 yuan, and low-end mining machines below 60,000 yuan, which are different from the price of the higher-configuration 192T mining machine (161,000 yuan). (Figure 11) A 192T high-end mining machine costs 161,000 yuan, 838 yuan per ton, source: Scale Blockchain, 2020-06 To a certain extent, in addition to paying attention to the cost-effectiveness of hardware, we must also pay attention to the early investment costs and technical input of the operation and maintenance team, which will be the key to obtaining high returns in the future. The details of many mining pool layouts on the market have not been disclosed, and there are different opinions on the truth and falsehood, so it is impossible to verify. For mining machines or simple cloud computing power investment, the above can be used as some reference. After basic understanding and research, it is more convenient to compare the differences between manufacturers. Opportunity cost is the most expensive investment There is a very important concept in economics: opportunity cost. Opportunity cost means that there are several options for the use of a resource, and the cost of using the selected option is the highest value among all the unselected options. The main references for opportunity cost are: Resources are scarce. Which company has the most sophisticated and scarce technology? Which one cannot be easily copied? Resources have multiple uses. Which one can maintain the greatest flexibility? To achieve multiple uses? Resources have been fully utilized. Have the purchased hardware and technology been fully utilized? Maximize the benefits? Resources can flow freely. Can everyone achieve maximum liquidity after participating?
Faced with approximately 200-300 Filecoin investment products on the market, investors need to abandon more items and choose the investment targets with the highest value. What is needed more is that we devote more energy to research in order to seek higher opportunity costs. Based on the above considerations, I believe you will soon find the best investment method. Statement: This article is an original article from IPFS Force District. The copyright belongs to IPFS Force District. It may not be reproduced without authorization. Violators will be held accountable according to law.
Tip: Investment is risky, so be cautious when entering the market. This article is not intended as investment and financial advice. |
