How to choose between big mining coins and small mining coins?

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First, please give a brief introduction.

Li Peicai

Hello everyone, I am Li Peicai, co-founder of Shanghai Waiyi. Waiyi’s main business is to provide one-stop mining services. If you have any questions about mining, you can contact us at any time and we will definitely give you a professional answer.

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Mr. Li has dominated the Shanghai mining circle for many years, owning 180,000 mining machines and 200,000 kilowatts of load (from 2019 data). It can be said that every move is a vane for mining friends to invest. May I ask which subordinates Mr. Li has in the large mining coin business and small mining coin business this year? In this year's market, are you more optimistic about the growth of large mining coins or the momentum of small mining coins?

Li Peicai

First, let me introduce to you the main logic of our investment in mining machines. The most important thing for us to consider is three points

1: The price of the mining machine itself should be cheap, preferably close to the production cost, or even lower than the production cost

2: The output of the machine should increase nonlinearly with the increase in the price of the currency, and the higher the increase ratio, the better.

3: The more difficult it is to produce a replacement model, the better; and the slower the estimated time of its release, the better.

Based on the above logic, we mainly deployed Bitcoin, Litecoin, and ETH as the major mining coins this year. Among them, Litecoin is the focus.

We are more cautious about Bitcoin this year. The impact of halving on mining output is still relatively large, so it does not meet the second requirement. If the price of the currency does not rise by more than double, it cannot completely offset the impact of halving.

As for Litecoin, there is no impact of halving, and the machines are also very cheap, meeting all the above conditions. The only drawback is that the machines are difficult to buy. As for ETH, because there is still uncertainty about the conversion of POW to POS, we have only deployed some high-memory Nvidia mining machines.

For small mining coins, we have purchased a small number of FPGA machines. Now most of the small currencies, such as ckb and kda, are mined using FPGAs. Compared with graphics cards, FPGAs have lower power consumption.

In terms of the market, I think the big mining coins still have greater certainty. It is also difficult for the small mining coin market to obtain excess returns. Compared with the past, the information is now more transparent. Once a high-yield small mining coin comes out, a lot of graphics card computing power and FPGA computing power will be cut over, and then there will be no excess returns immediately.

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Small mining coins are often more difficult to build an ecosystem than large mining coins. Mr. Li, could you give some advice to miners who have already invested in small mining coins on how to reduce the risk of investing in small mining coins?

Li Peicai

The risk of small mining coins is indeed relatively high. Although many small mining coins can create ultra-high returns of dozens of times, many of them have fallen by more than 90% from their highs.

To reduce risk, the first measure is to control your position and not put money you cannot afford to lose. In addition, you should invest in coins that you understand, that are innovative, and that have application scenarios. Don't be blinded by the soaring coin prices and chase high prices.

When using mining machines for small mining coins, you must pay attention to the risk of a sudden increase in computing power, because the basic computing power of many small mining coins is very small. Once the computing power increases dramatically, the profits will be very ugly.

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Which coin do you think is the best this year? Is it the best time to buy it?

Li Peicai

My suggestion is to put the main position in mainstream coins BTC ETH BCH. For small coins, I think you can buy a small amount of VDS. Although it is controversial, this coin is indeed a bit innovative. But you must control your position and only put a small part.