Distributed Roundtable Episode 2: Tianru CEO Yang Ming talks about Filecoin mining

When talking about Filecoin , one thing that cannot be ignored is mining. Especially because the rules of Filecoin mining are different from those of Bitcoin and Ethereum mining, how exactly does Filecoin mining work? What is the difference between Filecoin mining machines and Bitcoin mining machines in terms of performance? What should ordinary miners pay attention to when buying machines? Questions like these must be of great interest to everyone.

So, in the second issue of the Distributed Roundtable, we invited Yang Ming, the founder and CEO of Tianru ( 1475 ) , to talk about Filecoin mining, which is of interest to everyone .

Jerry : Mr. Yang, can you please share some knowledge with newbies in the industry? What is the difference between Filecoin mining and Bitcoin and Ethereum mining?

Yang Ming: First, Bitcoin mining is about computing power , which is the number of hash operations per unit time; while Filecoin mining not only involves the computing power of the mining machine, but also the speed at which computing power grows . Second, Bitcoin mining has computing power as long as it is plugged into the network and electricity, while Filecoin mining has a set of penalty mechanisms, and the rules of the game are much more complicated.

I am very familiar with the Bitcoin code, which is very simple and beautiful, and its design incorporates knowledge of sociology and economics game theory. Filecoin 's code may not be perfect, but it wins in terms of practicality.

Jerry : What do you think about the prospects of the IPFS protocol?

Yang Ming: The Internet has gone through several stages. The first stage was the craze, when some people started to believe in the Internet, until everyone began to believe in it at a certain opportunity. The second stage was the sobering stage, when the value of the Internet was overestimated, and then the Internet bubble burst in 2003 and the financial crisis came. The third stage was the reconstruction stage, when the Internet began to rebuild and its value re-emerged. The development trajectory of blockchain is similar to that of the Internet. The industry is currently in a trough, and IPFS has the opportunity to save the industry from the trough. I vaguely feel that filecoin will be a turning point.

Looking at the development history of Internet companies, we can see that companies that have emerged from the trough all have one characteristic, that is, a complete infrastructure, and the infrastructure must include storage. In this way, IPFS based on distributed storage has the potential to be a dark horse .

Back to the blockchain industry, Bitcoin only puts transaction and asset data on the chain, but business data / transaction data and user data are not on the chain. It is expected that if more than 60 million merchants in China put their data on the chain, the entire chain cost will be very high. IPFS can effectively solve this problem with its technical advantages.

I believe that all disruptive things start with small things, and IPFS is that very small incision in the blockchain industry.

Jerry : What are the essential differences between the IPFS protocol and the http protocol?

Yang Ming: HTTP uses absolute addressing . For example, No. ## , Yan'an West Road, Shanghai, China . The system will provide the corresponding IP address so that users can find the file.

IPFS is different. When a user wants to find a piece of content, this content will form a unique hash value, and this hash value will be recorded in the entire route. For example, if I want to find the file "Forget Love Water.mp3" , the system will help me ask my good friends ( peers ) if they have this file. If friend A among my 200 friends knows who has it, friend A will send a request to friend B , the owner of the file, and establish a P2P connection between friend B and me . If friend A doesn't know who has it, he will continue to broadcast. According to this model, users can generally find 100% of the files by the third or fourth round . IPFS relies on this way of finding friends to say hello to get files , which is the essential difference between IPFS and HTTP technology communication.

Based on different modes of searching for files, HTTP and IPFS have their own advantages and disadvantages . First, in HTTP , since the file address is known to everyone, the network is vulnerable to attacks. Second, since this address has an owner, this owner has certain privileges. For example, if you install a camera in the bedroom to monitor the elderly and children, the surveillance video can be called by the camera manufacturer.

On the contrary, in the IPFS protocol, you don’t know which server the file is on before you address it; it is difficult to attack when you don’t know where the target is. Secondly, there is no privileged party behind your data. The only privileged party is you, because you have a unique hash value. As long as the hash value is not leaked, no one can see the data.

IPFS also has a cost advantage: once the system is built, the cost of storing data with IPFS will be lower. The properties of the two technical solutions, HTTP and IPFS , are like calling a taxi and Didi Express . In the past, when you called a taxi to pick you up, the taxi had to leave from the taxi company, but now Didi will pick you up nearby based on system matching. When the taxi comes to pick you up, it will occupy road resources (waste bandwidth resources), consume fuel (consume node computing resources), and is not that fast (slow data transmission).

Since the IPFS system will retrieve files based on the best network and the highest trust among your 200 peers , and it will send many nodes to retrieve files, the efficiency will be much higher. For example, if you watch a video on Google, the video data is in Seattle, USA. According to the traditional method, it needs to be transmitted to you through a long path, so the experience is not that fast. On IPFS , if someone on the local area network has watched this video, he will send it to you nearby.

Finally, both parties have different expectations for marginal benefits. For centralized enterprises, they have to support employees, provide security maintenance, and bear risks, so they hope to make as much money as possible; while for miners, hard drives are idle anyway, so every penny earned is a penny earned.

Jerry : Mr. Yang's answer about the difference between HTTP and IPFS is the clearest and most concrete one I have ever heard. So, I would like to ask what experiences you have had in the past? What was the opportunity that led you to enter the IPFS track?

Yang Ming: I have worked at Ericsson, Google, Baidu, Intel and UnionPay. In short, I have worked in foreign companies, state-owned enterprises, private enterprises, IT , Internet and finance.

In 2017 , when I was working on another project, I accidentally came across IPFS . My first impression of it at that time was: this thing has a future. Coincidentally, the project I was working on at the time encountered a bottleneck, so I changed direction and started to lay out IPFS . I still remember that after the Chinese New Year in 2017 , I quit my job and devoted myself to IPFS .

Coincidentally, the project I worked on during my graduate studies was the edge network protocol BGB system, which is quite similar to IPFS . When I was doing development at Ericsson, I also came into contact with many protocols, such as domain name resolution DNS , DHCP automatic address allocation, etc. After I looked at IPFS at that time , I felt a sense of familiarity and familiarity.

Jerry : What is the positioning of Tianru? What products and services does the company have? Who are the company's current customers? What pain points will it solve for them?

Yang Ming: We plan to enter the IPFS track from a product-based enterprise. At present, the company's products include hardware equipment and software solutions. We provide integrated services for underlying communication protocols, encryption efficiency, upper-layer strategy optimization, and mining optimization.

In terms of hardware equipment, we sell two types of mining machines. The basic version is currently priced at 88,000 yuan, with a mining efficiency of 40GB per hour; the supercomputing version is currently priced at 248,000 yuan, with a performance of three digits. The mining efficiency of high-performance mining machines on the market is generally between 5-15GB per hour, so Tianru's technical advantages are very obvious. In the field of hardware mining machines, we mainly serve high-net-worth customers.

1475 Miner Acceleration Edition

1475 Miner Pro Supercomputing Edition

In addition to mining machines, we also provide software solutions . Simply put, if you have a server, but the mining efficiency is not high, then we can provide empowerment services. In addition to the hardware that needs to be purchased by yourself, we will charge 10,000 yuan per machine per year for the software . In the area of ​​software solutions, we mainly serve customers with existing machines.

We plan to build Tianru into a light-asset platform-based enterprise . The first platform-based product is the OSP system we developed ourselves, through which customers can use Tianru's GPU for acceleration. Originally, the mining machine itself needed to buy two GPUs , each costing 10,000 yuan, which was an additional cost in addition to the mining machine. If the customer adopts Tianru's OSP system, there is no need to purchase additional GPUs . Users can call Tianru's mining machine to calculate, and the mining machine will inform the customer of the results after the calculation. This will create a win-win situation. Users will not only reduce the threshold of GPU costs and improve efficiency, but Tianru will also gain benefits.

The second platform product is a real mining pool. Unlike the traditional mining pool that adopts a cluster architecture (relatively simple), we optimize the underlying communication mechanism and the task distribution and collaboration strategy: we will break away from the limitations of the mining farm, form a network around the world, and then cooperate with each other. The use of Tianru's mining pool will produce the following effects: first , it reduces the cost of mutual collaboration and improves the conversion rate of effective collaboration; second , it breaks through the limitations of factors such as geographical location, making the user access threshold lower; third , it breaks through the limitations of hardware bottlenecks, where hardware refers to disk IOPS and 10G network cards, etc. In short, we changed the underlying technical architecture to make the system compatible with low-threshold mining pools and improve the utilization rate of the machines. Originally, customers needed a lot of trust costs to deposit their own mining machines in the mining pool. Now you don't need to trust me, you can access the mining pool by running a command.

Jerry : Could you please tell us about the company’s production capacity and sales situation?

Yang Ming: Because the company has a certain layout in the early stage, the monthly production capacity of mining machines can be about 200 units. As for sales, the company will gradually form a sound sales system!

The industry is still in a turbid state, with too many uncertainties and the overall sales methods of the industry are relatively rough. Mining machines on the market are all being sold using different points, using different dimensions to expand the market and maintain customers, including ranking, computing power growth, mine maintenance, price advantages, etc.

In fact, mining is essentially an investment behavior. When purchasing a mining machine, customers need to consider: How much on-chain assets can be obtained for every 10,000 yuan invested? How much computing power can the main network increase? How much profit margin is there? We only use one dimension to measure the value of a mining machine, that is, the cost of unit computing power growth, that is, the unit input-output ratio .

The customers we face are people with high industry awareness, risk tolerance, and rationality. In fact, our mini program has more than 100,000 registered users, among which there are many customers who hope to get high returns at low cost, but we cannot use strong sales methods to stimulate people's dreams of getting rich quickly, so our products will have certain threshold restrictions for mass customers! In addition, we hope to maximize the benefits of customers while ensuring costs, weakening the profit margins of dealers, so our sales strategy will not be so aggressive.

There must be chaos behind the emergence of new things. Moreover, there are such huge economic benefits behind this. However, compared with spending more energy on marketing, our company is more willing to spend more time on researching technology. Although the road we are taking is more difficult in the early stage, it will become easier and easier in the later stage. It can be regarded as a result of accumulation. I also hope that the market's awareness can be gradually improved! Give technical personnel time to research, and return the market and customers profit space!

Here I would like to advise everyone not to just look at the ranking when purchasing a mining machine, because the costs invested by the merchants behind the ranking are hidden; secondly, you need to compare prices from different stores when purchasing a mining machine, and do not be superstitious about radical marketing techniques.

Jerry : Based on the current input costs and currency prices, how long will it take for miners to recover their costs?

Yang Ming: In fact, there are two factors that determine the time period for miners to recover their costs: the first is the number of mining machines currently invested in filecoin mining, and the second is the current coin price. Assuming that there are 30,000 to 50,000 mining machines on the market , and the coin price is 50-100 yuan, then the payback period for using Tianru's mining machine (supercomputing version) is about 25-50 days. These two factors are highly volatile, which is also the risk for miners.

Jerry : What kind of company does Mr. Yang want to build Tianru into in the future? What is the company's vision?

Yang Ming: We still want to develop into an ecological enterprise in the future. We will set up a subsidiary, which will invest in application-based companies.

Technology is a core driving factor in the early stage, and the later stage is a battle for capital and resources. In terms of strategic deployment and positioning, the latter stage is very important.

We spent a year and a half educating enterprises around us. We call these entrepreneurs who agree with us on the general direction consensus partners. These consensus partners are the closest partners for the company's future industry layout.

Jerry : I would also like to talk about the current status of the mining industry. As we all know, most miners are Chinese, and less than 30% of miners are overseas. They still use the machines and technologies we provide. In your opinion, how is the domestic industrial chain divided? Secondly, how are miners geographically distributed in various cities? What are the characteristics of each?

Yang Ming: In terms of vertical industries, the upstream is the machine manufacturer, commonly known as OEM ; the midstream is the mining machine manufacturer, and the downstream is the sales system and customers (i.e. miners). On both sides of this industry chain are media / exchanges / wallets / browsers, etc.

The mining industry is concentrated in Shenzhen because Shenzhen is relatively developed in the upstream of the industrial chain, that is, the hardware is relatively developed. However, many pyramid schemes are also mostly distributed in Shenzhen.

Shanghai is more business-oriented. Most technology companies in the industry chain are in Shanghai. In addition, Hangzhou / Beijing and Chengdu also have good companies.

Jerry : Will the bubble burst with the launch of the mainnet?

Yang Ming : There is a high probability that it will happen. Only a small number of companies with good input-output ratio and risk control can withstand the risks.

Jerry : Who is the opponent that you respect from the bottom of your heart?

Yang Ming: The overall quality of the mining industry is not as high as that of the Internet and IT . It can be said that the real elites have not entered this industry. However, there are still many people I admire, such as Star Continent, Xianhe, Xi'an Lingdong, Force Zone, China Community, Star Union, Chuxun, etc. They have all made irreplaceable contributions to this ecosystem.

Jerry : Finally, Mr. Yang, do you have any suggestions for those who are interested in Filecoin mining? And there have always been misunderstandings about 1475 , so is there anything Mr. Yang wants to clarify?

Yang Ming: Here, I want to reiterate that mining is essentially an investment behavior. When choosing to invest in mining machines, technology is certainly key, but the most important indicator is the input-output ratio: that is, for every 10,000 yuan invested, you need to know how much on-chain assets this 10,000 yuan can generate every hour after the mainnet goes online. You also need to know the mining machine's computing power, stability (including the stability of computing power growth), efficiency of coin issuance, etc. These are all related to your personal interests. Don't be led by rankings and some sentimental propaganda.

In fact, there are quite a lot of misunderstandings about us in the industry.

First: Some people always think we are official. In fact, we are close to the official, but we are not official. What I need to clarify here is that we are a Chinese company and a mining machine manufacturer.

Second: Some people say that the core competitiveness of 1475 is to find bugs . In fact, finding bugs is just a byproduct. Because we optimize the underlying things, it is easier to find some underlying bugs , so we solve the bugs by the way , playing a game of attack and defense with the official. In the final analysis, we, like everyone else, hope that this ecosystem will become better, safer, more stable, and less risky.

Third, some people think that 1475 uses machines to rank high. In fact, the number of devices we use is not that exaggerated. At most, there are only 97. The reason why we can run 10T per hour at the fastest time is because our machines can run up to three digits per hour.