Suppliers who are in the trend, analyze whether it is profitable from the perspective of IPFS mining machine manufacturers

IPFS is so well-known in the blockchain industry that in the past three years, the concept of IPFS mining machines has supported large and small manufacturers in the domestic mining and trading circles. Various gimmicks such as "pre-sale", "pre-mining" and "double mining" have been used, and countless "electronic waste" has been sold like a money printing machine. No matter how many times the founder of IPFS, Juan Bennett, has publicly reminded people not to buy any mining machines, he cannot control the investors' desire to get rich.

However, all this has changed recently. On May 19, IPFS announced that the Filecoin mainnet will be launched from July 20 to August 20. After the second phase of the test network has been running for a period of time, the official announced the launch of the large miner reward plan on July 20, with 4 million FIL as a reward test.

The most important thing is the last sentence of the reward plan announcement: miners are strongly recommended to prepare now!

Finally, the Filecoin mining that investors have been looking forward to is really coming. I wonder if those investors who were deceived in the past are crying in the toilet. Now, the reporter of FinaceRun will take everyone to try to analyze how to become a miner selling IPFS cloud mining machines. After all, it is better to be a supplier to the wind than to be a pig on the wind. Let's see whether the current IPFS mining machine market is still profitable.

Filecoin mining machine market analysis

According to IDC's forecast, the global data will be 32ZB in 2018 and is expected to grow to 175ZB by 2025. If it is difficult to imagine how much 175ZB of data is, David Reinsel, senior vice president of IDC, explained the news in a video of Seagate, "If someone could store 175ZB of data on optical discs, then these optical discs could take you to the moon 23 times."

Don Tait, senior blockchain analyst at British blockchain investment company FUNATOZ, predicts that in 2020, the cloud storage market will exceed US$131.7 billion, with a compound annual growth rate of 28%.

With the advent of the 5G+ big data era, the amount of data is growing exponentially. Where there is data, there is a need for storage. As the infrastructure of many emerging strategic industries, the demand for storage will only become greater and more certain.

IPFS is a top project and resource in the blockchain community. Filecoin, as its incentive layer, will become the largest decentralized storage network. There are about 30 million people in the global blockchain community, and more than 90% of them are involved in, indirectly involved in, or aware of IPFS. It is a project at the same level as Ethereum 2.0 in 2020. With its strong popularity, the Filecoin mining machine market is becoming increasingly popular, and the prices of mining machines and cloud computing power are also rising.

However, for a mining novice or an ordinary miner, Filecoin mining is a very high threshold. For Bitcoin mining machines, you may only need to consider two parameters: computing power and power consumption, but Filecoin mining involves three types of mining income: storage mining, retrieval mining, and block mining. The specific mining income still needs technical optimization, so many individual miners will directly choose to buy cloud mining machines. Then it is a better choice for us to directly sell cloud mining machines. If you mine by yourself, you need to bear various unknown risks such as currency price fluctuations.

Filecoin Mining Requirements Analysis

First of all, Filecoin mining cannot be performed on personal computers. Whether it is storage mining, retrieval mining or packaging mining, the bandwidth of personal computers and homes is basically impossible to meet the official requirements. According to the official minimum configuration requirements for stand-alone mining, if you want to mine, you must use a server, generally a blade server with multiple hard disk slots. We will not consider the issue of server hosting here for the time being, and first analyze the mining machine itself.

Benpao Finance would like to remind everyone here that if the mining machine you see on the market is an ordinary home-grade CPU with low memory and integrated graphics, or it tells you that it supports multi-mining, please click on the upper right corner to close.

Of course, the official hardware configuration requirements are only a reference and have no meaning for real miners. The hardware configuration used by most miners is basically higher than the official configuration, because cluster mining is currently the main method.

Cluster mining is when multiple machines form a node to participate in mining. Compared with single-machine mining, cluster mining has a larger storage capacity and is easier to break through the storage quota threshold set by the official.

However, the specific amount of Filecoin that can be mined also needs to consider the miner's system cluster and algorithm optimization capabilities. Filecoin storage capacity depends on the effective storage ratio. The economic model parameters are determined by multiple angles. The effective storage that can be contributed by mining machines with different performances may vary greatly, so mining machines with different storage capacities cannot be simply pieced together. But in order to facilitate everyone's understanding and calculation of benefits, we mainly consider whether the physical configuration of the mining machine is cost-effective and the cost per TB is low.

Filecoin mining machine cost analysis

The hard disk is the most important component of the Filecoin mining machine. The performance indicators for measuring the hard disk include hard disk capacity, hard disk speed, hard disk rotation speed, interface, cache, and single-disk capacity of the hard disk.

Because the essence of Filecoin mining is still storage, from the perspective of data security, most mining machine manufacturers currently use 8T enterprise-level SATA mechanical hard drives, which cost about 1,300-1,500 yuan. A small number of mining machine manufacturers use 10T or 12T. Basically, everyone chooses several mainstream brands such as Seagate, Western Digital or Toshiba. A blade server with 12 hard drive slots filled with 8T hard drives can have 96T of storage space.

Solid-state drives are generally not considered because they have a low cost-performance ratio and are difficult to recover if data is lost. There is a penalty if data is lost during Filecoin mining.

The CPU of the mining machine generally chooses two platforms: Inter or AMD. Some mining machine manufacturers only list the Inter E5 level in the CPU description without specifying how many cores the E5 has. It is important to note that the official requirement is a minimum of 8 cores.

According to an investigation by FinaceRun reporters, only a few stand-alone miners use Intel's E5, E7 or AMD 3970x. More mainstream miners will choose to use the cost-effective and affordable AMD platform for cluster mining. Few people choose the Inter platform, and stand-alone mining has high memory requirements and is not cost-effective.

AMD epyc7302 and 7282 series CPUs, the mainstream choice for cluster mining, have been out of stock recently. It may take half a month or even a month to adjust the supply. In addition, the relevant accessories suitable for building Filecoin mining machines have been rising in price recently. For example, in 2019, the price of the server motherboard Supermicro H11SSL-I was around 3,000 yuan. At this stage, 5,500 yuan can only get futures one week later. Therefore, for people who do not have relevant channels, it is somewhat difficult to assemble the accessories by themselves. Whether it is accessories or finished mining machines, the price changes almost every day.

Taking into account that each person's specific purchase cost and assembly configuration cost are different, we roughly calculated the cost of a mainstream 96TB mining machine. If you have relevant channels for accessories and the ability to assemble it, the cost is about 35,000 yuan. If you buy the finished product directly, it will cost about 80,000 yuan.

Filecoin Cloud Miner Profit Analysis

We have just calculated the physical cost of a 96T Filecoin mining machine, but this does not include the cost of hosting and operating the computer room. Generally, a server provides a single independent IP and a network of more than 20M. The price of hosting in an IDC computer room for one year is about 5,000 yuan, which does not include the cost of Filecoin mining and cluster setup and maintenance. If you find a mining company in the industry for hosting, the hosting fee will be 10,000-15,000 yuan/year. Therefore, if you can learn how to do the relevant configuration and optimization of Filecoin mining by yourself, you can save 5,000 yuan/year.

If you want to sell cloud computing power yourself, your profit depends on the cost of your mining machine and the cost of operation and maintenance. The current market price of cloud computing power is about 1,500-2,000 yuan/T/year. If the cost of the 96T mining machine you assembled yourself is 50,000 yuan, then your cost per T is about 520 yuan, including the maintenance cost of the mining machine, which is about 1T/600 yuan, which means that your profit can at least double.

If you want to participate in cloud computing mining, according to the prediction of miners participating in the test network mining, Filecoin mining machines produce about 0.3 FIL per T of computing power per day. Based on the price on June 30, the average price of FIL futures across the entire network is 95 yuan, which is equivalent to a daily profit of about 28 yuan per T of computing power. If you purchase cloud computing power for about 1,800 yuan, the payback period is about 2 months.

However, after the Filecoin mainnet is launched, the computing power of the entire network will definitely increase a lot compared to the current level. In addition, the block rewards have been decreasing, so the specific and accurate benefits can only be accurately calculated after the mainnet is officially launched.

Conclusion

We have now entered the final critical period of the Filecoin testnet. The advice given by Benpao Finance is that if you are an inexperienced mining novice, the trial and error cost of participating in Filecoin mining now will be far greater than the cost of missing out. If you are afraid of missing out, you might as well buy the coins directly.

Whether you assemble a mining machine yourself or purchase cloud computing power, it essentially depends on your understanding of Filecoin and IPFS and your own strength. Judging from the current situation of the test network, several major domestic miners have clearly moved towards professional and large-scale mining, and the space left for individual participation will become smaller and smaller. Filecoin mining is far more complicated than BTC mining. To maximize profits, it is difficult for individual miners to compete with regular miners.

Finally, we still hope that you will look at Filecoin rationally, have reasonable expectations, and don’t get carried away. Although the first mine is good, don’t force yourself to participate if you don’t have the ability. It may be a better choice to wait for the mainnet to go online and observe for a while.