The S9, the flagship smartphone of the generation, is getting old. Can it still keep its popularity?

Author: No.2

Source: Deepchain

"10 S9i 14T third-generation official phones cost 250 yuan; 50 S9 14T third-generation official phones cost 160 yuan; 60 S9 13.5T third-generation official phones cost 160 yuan."

"We offer discounts for larger quantities. We have a lot of stock, so we can get as much as you want. If you want more, we can even offer a discount."

There are endless sell orders for Bitcoin mining machines, especially S9 mining machines, on Xianyu. Interestingly, many of the sell orders were posted recently.

“After the halving, the S9 mining machine will be phased out.” During this period, mining machine salesmen from Huaqiangbei began to resell the S9 mining machines.

At 3 a.m. on May 12, with the arrival of the third Bitcoin halving, the once "king" S9 mining machine will finally step down from the stage.

Unlike those who were in a hurry to sell their mining machines, after the halving, former miner A Zheng (pseudonym) bought another 60 S9 mining machines.

“The total cost is no more than 20,000 yuan. On the one hand, I wanted to try my luck during the flood season.” A Zheng told DeepChain, “On the other hand, I really couldn’t bear to part with it.”

1 " Is the S9, the flagship smartphone of the generation, set to retire? "

What does exit mean for a mining machine?

“When the revenue from mining Bitcoin cannot cover the cost of a mining machine, it means that the mining machine is no longer suitable,” A Zheng told DeepChain. “And the biggest factors affecting the cost of a mining machine are the cost of the mining machine itself and the price of electricity.”

This year, although the climate has changed from winter to spring, it is still in the dry season. Summer has not yet arrived, and the flood season is not coming. The power production capacity of major power plants that are highly dependent on hydropower is insufficient, resulting in high electricity prices in the market.

"The average electricity price during the flood season is 0.23 yuan/kWh, while the electricity price during the dry season and the price of thermal power are between 0.32-0.37 yuan/kWh." Dadong of the CoinIn Mining Pool told DeepChain, "The increase in electricity cost means the profit of mining machines will decrease."

But if the profit that the mining machine can generate is considerable enough, then it is still worthwhile to turn on the machine even if the electricity price increases.

“It’s just a matter of how much you earn.”

However, at 3:23:40 am on May 12, with the mining of the 630,000th block in the entire network, Bitcoin ushered in its third halving since its birth. The number of bitcoins rewarded for each new block dropped from 12.5 to 6.25, with a daily reduction of about 900 coins.

After the halving, the difficulty of mining will increase, and the income of miners and mining pools will also decrease.

The S9 mining machine was the first to be affected.

Previously, according to the data from the Biyin mining pool, if calculated based on an electricity price of 0.23 yuan per kilowatt-hour, the S9 has reached the shutdown price.

For a time, news about S9's withdrawal was rampant.

In fact, this isn't the first time the S9 has arrived at a cut-off price.

In November 2018, the price of Bitcoin fell by about 45%. At that time, about 1.3 million S9 mining machines were shut down.

During this period, in order to extend the vitality of the S9 mining machine, and at the same time, a series of new mining machines were born in the industry. Under the pressure of being blocked from the front and chased from the back, Bitmain released two upgraded versions of the S9 mining machine: S9K and S9SE.

This shows the market's favor for the S9 mining machine and Bitmain's high hopes for the S9 mining machine.

On November 25 last year, Bitcoin fell below the $7,000 support level and once dropped to around $6,700, with a 24-hour drop of more than 7%. F2pool’s official Weibo account said: “Based on the current difficulty of Bitcoin mining, and at an electricity price of 0.38 yuan per kWh, six Bitcoin mining machines, including the Antminer S9, have reached the shutdown price.”

Coincidentally, in the Bitcoin flash crash on March 12 this year, Bitcoin plunged directly from more than $7,000 to a minimum of $3,800. The S9 mining machine is once again facing the risk of shutdown.

Although the first three sharp drops in coin prices only caused a temporary shutdown of the S9 mining machines and did not cause them to exit the market, with the severe winter of the entire industry and the arrival of halving, the profits that miners can obtain through the S9 mining machines are getting lower and lower.

“In 2017, an S9 mining machine could bring me about 200 yuan in revenue a day,” Tang Wanlong, the head of the mine, told DeepChain. “But by April this year, a mining machine could only bring me a few dozen yuan in revenue a day.”

As of now, at 0.32 yuan per kilowatt-hour, an S9K mining machine with a computing power of 14.5TH/s will lose 1.03 yuan every day it is turned on.

The S9i mining machine with lower computing power of 14TH/s will lose 3.48 yuan for every day it is turned on. There is no doubt that the S9 mining machine has reached the shutdown price.

In contrast, on May 10, Antminer issued an official announcement that it would stop providing maintenance services for the S9 series models.

The exit of the S9 series seems to be a foregone conclusion.

“In fact, it has lasted long enough. According to Moore’s Law, electronic products generally need to be updated every two or three months,” Tang Wanlong told DeepChain. “Other mining machines of the same period ended early, but the S9 mining machine lasted for three years. If there is no halving, perhaps the S9 can last another year.”

2 "S9 is old, can it still make a living?"

In 2016, Bitmain released the Antminer S9. Perhaps at that time Bitmain never thought that this mining machine would become a legend in the mining circle.

As soon as S9 was sold, it occupied half of the entire mining machine market in a very short time.

According to statistics, S9 mining machines accounted for nearly 80% of the total Bitcoin network computing power in 2018. Even now, S9 mining machines still account for 23% of the computing power share in the market.

“At that time, almost all miners were buying S9 mining machines in large quantities,” A Zheng told DeepChain. “When I bought it, I remember it was 9,700 yuan per unit, and later it was hyped up to 30,000 yuan per unit.”

Before 2019, the mining market was not that popular. A Zheng got free electricity from some channels, bought 200 S9 mining machines at a price of about 10,000 yuan, and started his own mining career.

For three years, A Zheng has never abandoned the S9 mining machine, and the S9 mining machine has also brought A Zheng financial freedom.

“A rough calculation shows that 200 S9 mining machines have brought me more than 300 bitcoins in three years,” A Zheng told DeepChain, “but I can also clearly feel that the daily revenue brought by S9 is gradually decreasing.”

Finally, on November 25 last year, when Bitcoin fell below $7,000, A Zheng felt that there was no point in continuing his mining machine business, so he packed up and sold all his mining machines to Huaqiangbei.

However, a few months later, A Zheng bought another 60 S9 mining machines from Huaqiangbei.

“I still can’t forget the roar of the S9 mining machine.”

At present, there are still many mining machine sellers in Huaqiangbei who are constantly selling second-hand S9 mining machines, and at the same time, many miners are constantly buying S9 mining machines.

On the one hand, it may be because of sentiment, but the more important reason is that the flood season is about to come.

As mentioned above, when the flood season comes, the electricity price in the market will drop to 0.23 yuan/kWh. At that time, the S9 mining machine will still generate a considerable amount of income every day.

According to the data from the Biyin mining pool, when the electricity price is 0.23 yuan/kWh, S9K will bring miners a net profit of nearly 1.54 yuan per day.

Not to mention that in order to cope with the lack of computing power, miners have modified the S9 dual-barrel and S9 single-machine down-clocked model mining machines themselves.

The S9 twin-barrel mining machine is to convert two S9 mining machines into one. In this way, the computing power of the modified mining machine can be increased from 13.5T to 20T, while the power consumption increases by about 10% compared with a single machine.

Single-machine frequency reduction means lowering the official power consumption of a single S9 mining machine. Although the computing power has also decreased from 14TH/s to 10TH/s, its energy efficiency ratio has also decreased from the original 102W/T to 75W/T.

As of now, the S9 single machine downclocking and S9 double-barrel mining machine will lose 0.17 yuan/day and 0/64 yuan/day respectively at 0.32 yuan/kWh. But if calculated based on the electricity price of 0.23 yuan/kWh, they can generate profits of 1.45 yuan and 2.68 yuan per day respectively.

"The current second-hand price of an S9 mining machine is about 160 yuan, plus the cost of about 40 yuan for transformation, 200 yuan can bring an S9 mining machine back to life." A Zheng told DeepChain, "In this way, the cost can be recovered in about two months, and the rest of the time during the flood season is pure profit."

Although the S9 mining machines can still generate profits, A Zheng and Tang Wanlong believe that the profits are not much, and after the flood season, the S9 mining machines that are no longer useful will eventually be phased out.

In response to A Zheng and Tang Wanlong’s views, Biyin Dadong expressed his disapproval.

“It is undeniable that we have entered the post-S9 mining era, but the S9 story will not end in the short term.”

“The S9 mining machine has been called for a year to be phased out. It couldn’t keep up with the development speed last year, but it still hasn’t been phased out.” Dadong told DeepChain, “After the flood season, the S9 may not be phased out.”

Dadong introduced that, on the one hand, some mining farms can get free electricity, so that the S9 can still make use of its residual heat; on the other hand, since mining farms are large electricity users, when buying electricity, they often need to guarantee a minimum electricity consumption to the power supplier in advance. Therefore, in order to fill the load, the major mining farms will not necessarily shut down the S9 mining machines even if they lose money.

"In addition, domestic S9 mining machines are gradually being phased out, while there is still some demand abroad," Dadong said, "but the demand should not be very large."

3 "Small miners and S9 are on the verge of being eliminated"

In any case, the application scenarios of S9 mining machines are gradually disappearing.

In A Zheng's opinion, only large mining farms dare to do the "feat" of losing money to start up the S9, and small miners can hardly afford such costs.

As the difficulty of computing power increases, in order to mine new Bitcoins, the requirements for computing power and the number of mining machines will be higher. In addition, large OTC institutions have seen the dividends in the mining field and have entered the market.

In May 2019, Fidelity, one of the world's largest asset management companies, launched a fund worth 300 million yuan to invest in Bitcoin mining.

In April of this year, Binance, one of the three giants of cryptocurrency exchanges, also announced that it would join the mining army and launch the Binance mining pool.

Other traditional mining pools and mining farms such as Ant Pool and F2POOL have long occupied a place in the Bitcoin mining industry.

In the Bitcoin mining arena, it is rare to see small miners anymore.

According to a person from a large mining farm, after the halving, although the difficulty of producing blocks has doubled, the computing power share of large mining farms in the market has doubled. All in all, the overall impact is not significant.

Where does this extra computing power share come from? Naturally, it comes from the thousands of small miners who were forced to shut down and leave.

“Perhaps after the next halving, the mining industry will see a clash between large mining farms.” A Zheng told DeepChain, “The cake is so big, if someone takes more, someone else will have to take less.”

How long can the S9 mining machine survive? At present, there is still a question mark. Although many people believe that the S9 mining machine will eventually come to an end after the flood season, if the S9 mining machine wants to wait until the flood season ends in September, it will take at least 3 to 4 months.

But the young miners couldn't wait that long.

In fact, since last year, the living space of small miners has been squeezed by large mines. Until the halving this year, the few living spaces for small miners were almost wiped out.

“The flood season was supposed to come in May, but it’s already the end of the month and the electricity price hasn’t come down yet,” A Zheng complained to DeepChain.

According to media reports, on May 18, the Sichuan Provincial Department of Economy and Information Technology issued the "Notice of the Sichuan Provincial Department of Economy and Information Technology on Effectively Strengthening Power Dispatching and Operation Arrangements to Ensure Stable Power Supply in the Province."

The "Notice" stated that since May, the power load in Sichuan Province has increased significantly, with an average daily power consumption of 615 million kWh, a year-on-year increase of 22%. At the same time, the water inflow in various river basins in the province was about 20% less than the same period last year, resulting in a weakening of hydropower generation capacity. Therefore, the State Grid Sichuan Electric Power Company must optimize power dispatching to ensure the stable operation of the power system.

The so-called optimization, from the miners' point of view, is to draw power quotas from mining farms and allocate them to civilian electricity.

“Now the load of most hydropower stations has been withdrawn.” Biyin Dadong told DeepChain, “In Sichuan, most of the machines that miners put into the Fengshui hosting have stopped.”

This news was confirmed by A Zheng: "Now many mines in Aba Prefecture have stopped working."

However, at the same time, A Zheng also said that this is a normal phenomenon. "In fact, there is electricity at the mine every night, and it happens every year."

But no matter what, the situation of small miners is becoming increasingly difficult as they are squeezed by large mines on the one hand and the long-awaited flood season is delayed on the other.

Perhaps in the near future, the small miners that were born before the S9 mining machine will also exit the market earlier than the S9 mining machine.