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Whether from a technical or mining perspective, the second half of 2020 will be an important period of change for Ethereum. The beacon chain is about to be released, allowing Ethereum to enter the 2.0 era; the Ethereum mining DAG file of the PoW chain will exceed 4G, and more than 50% of the graphics cards in the current network will not be able to continue ETH mining. What do senior participants in the mining industry think about the short-term and long-term opportunities and challenges? The F2Pool live broadcast room recently invited Wang Chun, co-founder of F2Pool and founder and CEO of stakefish, Zhang Songqing, co-founder of minerOS, Zhang Li (Wolf Brother), co-founder of Yunwa Technology and Langshen Miner, and Xu Kang, head of ETC Asia Pacific, to give a comprehensive interpretation of the topic of Ethereum and graphics card mining. Recharge Faith: Why are you optimistic about Ethereum? Wang Chun: Ecosystem, market value, and scalability support long-term value F2Pool is one of the early participants in the Ethereum ecosystem and the first mining pool in China to support Ethereum. First, Ethereum has a broad developer community base. Ethereum is supported not only by developers, but also by many scientists and researchers. The Ethereum Foundation's annual R&D funding is equivalent to RMB 9 figures, allowing people to continuously conduct new research and attempts. The rich ecosystems built on Ethereum, such as Dapp and DeFi, bring strong network effects. Second, ETH’s market value and trading volume are second only to BTC. It is the world’s second largest cryptocurrency and has always been the focus of attention. Third, Ethereum’s improved scalability has solved many of Bitcoin’s unresolved problems, allowing DApps to run more smoothly and at a lower cost, thus enhancing usability. Zhang Songqing: Mining is fair and profitable From the perspective of mining fairness, PoW itself provides a relatively fair way to participate. In addition, the ETH mining algorithm is ASIC-resistant, which makes professional mining machines less cost-effective. GPU miners can continue to participate in mining, allowing more people around the world to participate in mining at low cost and conveniently. From the perspective of mining income, the income from graphics card mining has always been relatively stable. The update of graphics cards is not as fast as that of professional mining machines. Graphics cards such as 474 and 1060 from three or four years ago can still have good income. Zhang Li: Mining hardware has high value retention From the perspective of Ethereum graphics card miners, graphics card mining hardware has a high value retention rate. Graphics card hardware purchased in early 2019 can still be sold at about 1.2 to 1.5 times the price after one year of mining. The quality control of graphics card mining machines on the market has also been greatly improved, and the maintenance cost is also controlled within a relatively reasonable range. In addition, graphics card mining is not as sensitive to electricity costs as ASIC mining machines, which is generally a good direction for mining investment. Graphics card mining: How is the market developing and how are the profits? Zhang Songqing: From explosive growth to steady growth Graphics card mining machines experienced explosive growth in 2016-2017, and many brands emerged. When the ETH price was at its peak, it was difficult to get a card. Since 2018, ETH has entered a correction cycle, and the shipment of new mining machines has gradually slowed down. When ETH was below $300, the shipment of new mining machines almost stagnated. From the second half of 2018 to the present, graphics card mining machines have been circulating second-hand hardware most of the time, and the payback period is mostly between 10-18 months. The upgrade of graphics card mining machines is basically carried out with the increase of ETH's DAG files. DAG increases by 1G in about a year. By the end of November this year, 4G graphics cards will also withdraw from ETH mining. Some Ethereum mining machines are also relatively mature. In general, buying second-hand graphics card mining machines is still a good and stable investment in the past two years. If you buy a new graphics card, it is recommended to buy the latest generation of hardware with a higher value retention rate. Zhang Li: Declining market, choose the right time to enter Graphics card hardware is currently in a "reducing market". In other words, the current hardware inventory of graphics card mining is relatively fixed. Due to the "too high" price of new cards, the payback period takes more than 2 years. Miners basically choose second-hand graphics cards to control costs. For this reason, the market decline such as the "312" incident has little impact on graphics card miners. Now may not be the right time to enter the market, because as 4G graphics cards are gradually phased out this year, people are starting to pay attention to 6G, 8G and higher storage graphics cards, which may cause prices to rise and extend the payback period. In terms of card selection, I personally recommend NVIDIA P series, and the "10XX" series can also be purchased at a suitable price. DAG will surpass 4G: How to solve the urgent problem? Zhang Songqing: Optimizing the system can also extend the use time of the graphics card ETH's DAG file will reach 4GB around the end of December this year. Since the Windows system itself occupies a certain amount of video memory, the mining suspension time will be advanced. Miners with 4G cards using the minerOS system can extend the mining time by 3-4 months compared to the Windows system to survive this year's flood season. P104 is special. In order to stabilize ETH mining and reduce power consumption, most cards have 8G video memory physically, and 4G BIOS is flashed at the factory. As early as last year, minerOS released a service to upgrade P104-4G to 8G for free. There is a hardware modification plan for 474/584 and other 4G A cards, which replaces 8 512GB video memory chips with 1GB video memory. Due to the high price of video memory chips, the replacement cost is also high. Most large mining companies will start upgrading their graphics cards one year in advance when the memory limit is reached. Since 1063 is an N card, it can mine BEAM, AE and other currencies in addition to ETH. Miners who bought 3G graphics cards such as 1063/P106-90 at low prices last year also made a fortune on small currencies. It should be noted that in addition to hardware upgrades, power stability, system stability, and operation and maintenance personnel training are also key factors in graphics card revenue. Xu Kang: ETC with the same algorithm is investigating DAG issues The DAG issue is also a topic of great concern in the ETC mining community. The ETC core development team also included the DAG issue in the research plan in the first quarter of this year. Whether it is necessary to limit the DAG capacity and modify the algorithm will have a clearer statement in the second quarter of this year. Whether to modify the algorithm mainly affects ASIC mining machines and has no effect on GPU mining. ETH turns to PoS: Which currencies are expected to take over the computing power? Wang Chun: Computing power will be distributed to each currency Ethereum does have a large share and influence on graphics card mining. After ETH is fully transferred to PoS, the computing power may be relatively evenly distributed to other currencies, sharing the benefits of these currencies. As for potential graphics card currencies, you can pay attention to the latest developments on F2Pool. We conduct detailed investigations and research before launching new currencies. I appreciate Grin's team, philosophy and community. If I were to ask which coin is the most decentralized, besides Bitcoin, I would vote for Grin. However, potential coins like Grin and Handshake have not yet received support from mainstream exchanges and need more promotion from the community. Xu Kang: ETC is continuously improving to take over computing power The mining income of ETC and ETH is comparable, and from the beginning of this year to the ETC production cut, the mining income of ETC is generally slightly higher than that of ETH. At present, whether in terms of switching costs or mining income, ETC is the most competitive in taking over ETH computing power. While enhancing communication with miners, ETC is also continuously optimizing its technology. In the past two years, ETC has carried out three hard fork upgrades to be compatible with ETH upgrades. After the Phoenix hard fork in June, ETC and ETH will be in the same state for a period of time. In terms of ecology, ETC is also developing continuously, and DeFi applications such as MakerDAO will also appear on ETC. I believe that these improvements will play a positive role in motivating the market value. Zhang Li: No currency has been found that can take over the computing power of ETH At present, no currency has been found that can handle the huge computing power of ETH. I hope that the existing graphics card currencies will have enough time to "divide" the computing power among currencies and strengthen the ecosystem. Zhang Songqing: Some small currencies show potential At present, the market value gap between other graphics card currencies and ETH is very large. From the perspective of market value, ETC has the greatest possibility of taking over computing power. Some currencies such as RVN, AE, BEAM, GRIN, etc., although their market value is still small, also show good development potential. For miners, after ETH can no longer mine, they can buy N cards because they have more choices of currencies to mine. Ethereum 2.0: How should miners adjust their strategies? Wang Chun: Network development still needs time, and nodes can seek professional support Ethereum 2.0 has gone through a long period of exploration, aiming to realize a new and more scalable network. The transition from PoW to PoS is also the focus of miners, and many teams are also conducting various explorations on sharding and second-layer expansion. The current Ethereum can solve certain problems, but it is still a long way from fundamental improvement. The upcoming Phase 0 can realize staking, but it may still be difficult for miners to serve as verification nodes. Stakefish has actively participated in many early PoS networks and has accumulated rich experience in participating in PoS networks. At present, the latest version of Ethereum is still in a highly tested state. Miners who plan to become nodes should avoid offline and double-signing problems that may be encountered in participating in the PoS network. They can seek technical support from professional verification nodes. Zhang Li: The transition to PoS will be carried out gradually, miners should not panic Miners do not need to worry or panic when Ethereum switches to PoS. No community will switch such a high-market-value network to PoS consensus in a short period of time. It will be a gradual transition in a high-tolerance mode, during which miners can still conduct PoW mining. For Ethereum 2.0 with PoS consensus, GPU miners naturally have the advantage of being nodes. They can choose to hold ETH mined on the Ethereum PoW chain and be nodes on Ethereum 2.0 to earn network rewards. |
