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Mr. Wang Chong, founder of NiuHuaLi & executive president of WBA Mining Promotion Association, was invited to participate in an online live interview by the well-known blockchain media "Miyou Finance" on April 15, 2020. The following content is an excerpt of the wonderful sharing content of this live interview. Hello everyone in the group, I am Gary, the host of Miyou Finance, and welcome everyone to participate in this AMA online interview. Thank you very much to the co-organizer of this event, Zhongyan Zhichuang, the strategic partner Niuniu Computing Power, and all the media for their strong support. Next, please welcome Mr. Wang Chong, founder of Cow Computing Power and executive president of WBA Mining Promotion Association. Hello everyone, I am a veteran entrepreneur in the traditional Internet industry. The Internet companies I started have received investments of over 100 million RMB from VCs, listed companies, government-guided funds, and Mr. Li Lin, CEO of Huobi.com. I am also an old player who has experienced the blockchain currency circle, chain circle, and mining circle. Now I focus on mining, investing in the construction of mines and mining. We have self-operated or invested in the construction of 7 mines with a total load of 493,000. We also have a cloud computing power platform called Cow Computing Power. As an in-depth practitioner in the industry, how do you view the overall mining market in 2020? Will the top players become more concentrated or will there be more new entrants to grab a share of the pie? Affected by the epidemic and the halving this year, Bitcoin mining will be more confusing. Manufacturers will not rashly deploy large-scale production capacity, and everyone will inevitably wait for the right time. So in my opinion, 2020 is not only a key year for the iteration of mining machines, but also a key year for the iteration of the mining industry. Even the iteration of mining machines is not just an iteration of products and chips, but an iteration of overall services and management, and it is also a change and iteration in the way newcomers enter the market. From the perspective of mining investors, the old saying "mining in a bear market, speculating in cryptocurrencies in a bull market" has always been the motto of old miners. The sluggish market in 2020 is definitely a good time for newcomers to enter the market at the bottom. This year, many newcomers, new funds, and new institutions will enter the mining investment market. However, the top players are becoming more and more concentrated, and the gradual emergence of oligopoly is an inevitable trend. The top players in the industry eat the meat and drink the soup, and some companies or teams behind them are struggling to follow. This has been demonstrated vividly in all walks of life in the past 20 years. The flood season is coming soon. With the recent recovery of the cryptocurrency market, will major mine owners or mining machine leasing companies launch a new round of equipment competition? Wang Chong: As long as you still want to play in the field of mining and want to continue to make money in this field, it is inevitable for both mine owners and mining machine owners to start or participate in a new round of equipment competition. From the perspective of mine owners, the previous mines generally had low construction standards or were built with racks, sockets and other supporting equipment for small-power machines, so you must transform and upgrade the original mines; and there is also power resources. In the past, many of them used direct power supply, so in the new round of layout, it must gradually transition to the power of the hydropower consumption demonstration park and the power of the State Grid. For mine owners, if you have a large number of old mining machines, you must complete the update and replacement of old and new mining machines, otherwise the old mines will shut down and you don’t have new mining machines, which means you are out. Of course, I personally think that the best time to enter the market is when the price of the currency is at a low level. If you don’t care so much about the short-term and immediate returns, I think the halving is a good opportunity to buy the bottom and enter the market. So I and many institutions have been increasing our investment in the mining field during this period, because I found that everything is cheaper than before, it is easier to get electricity than before, and it is cheaper to build a mine than before. Many mining machines are already sold at cost price, and even can be directly produced in conjunction with mining machine companies. This is my feeling, and we will continue to increase investment and layout. We are building new mines in Xinjiang and Sichuan, investigating new power resources and sites in Qinghai, Inner Mongolia and overseas, and preparing to gradually purchase large quantities of the latest models of mining machines again. Many people believe that the expected Bitcoin halving will lead to a large-scale "mining accident", and the price of digital assets and mining income may collapse severely. What do you think? The so-called "mining disaster" is only for miners who have relatively insufficient risk resistance, insufficient legal currency cash reserves, or have not completed the conversion of old and new mining machines. Otherwise, I personally think that after the halving, miners are just experiencing a period of suffering and the industry's freezing point, but it is precisely this industry freezing point that is the best time to enter the market. We prefer to call it a "gold pit." So I think the possibility of a mining accident is still relatively small, because first of all we have to define what a mining accident is. A mining accident is when most people or companies in the entire industry cannot survive. But in fact, as far as I know, many old miners and professional institutional miners have completed the iteration and upgrade of old and new machines. Even if they still hold old mining machines with more than 80J/T, these old mining machines have basically paid back or made money, and many of them are even machines that are bought at the bottom. For example, the 28,000 T9+, more than 22,000 L3+, and S9 I bought in March 2019 have all paid back many times. I remember the most exaggerated period in June and July, when T9+ paid back once a month. Logically speaking, the service life of these old mining machines should have expired. Unless you bought a mining machine in early 2018, which may never pay back, the others have basically completed their service mission and are bound to exit the stage of history. It cannot be called a mining disaster just because the old mining machines that have been in service for two or three years are shut down. As for the new mining machines (30-48J/T) that have not paid back, because a large number of old mining machines have been shut down, these mining machines will not be shut down within 1-2 years, but the payback period may become longer. However, if you look at it from an optimistic point of view, each halving will bring a sharp rise in the price of the currency. As long as you don’t sell the coins you dig immediately and sell them at a high price, it is possible that your payback period will become very short again. Mining revenue has always been dynamic due to the fluctuations of four factors: machine price, currency price, electricity cost, and computing difficulty. Miners still need to learn to look at this matter dialectically and dynamically. Now the time for BTC halving is getting closer and closer. After the market last Friday, the market is not very volatile now. It has been rising and falling slowly. Do you think there will be a big profit space under the influence of BTC halving? Wang Chong: In fact, I don’t usually predict the price of coins. I spend more time and energy on the development and layout of the mining ecosystem. In my opinion, the mining circle is more loyal to Bitcoin. Besides, the short-term price of coins can only be predicted by God or by guessing. But I am still very optimistic about the long-term price of Bitcoin. Whether it is the issuance of China’s DC/EP in the second half of this year or the approval of Libra, it will bring a lot of fresh blood into the market. In addition, after the epidemic is over, the global central banks and governments will release money. It is impossible for so much hot money to go to the real industry. The real industry recovers slowly and is more likely to flow into the financial market. Therefore, my overall judgment is that in the short term, the currency price will not directly reverse and rise in a V-shape, but will fluctuate widely in the large range of more than 4,000 to more than 7,000. Once the overseas epidemic is under control and improves, a substantial rise in Bitcoin is very much expected. Moreover, I judge that by then, the increase in Bitcoin will be much higher than other major financial assets such as stocks, oil, and gold. Compared to investing in mining farms or buying coins directly, what are the advantages of investing in cloud computing power? Wang Chong: In fact, facing the increasing computing power of Bitcoin, the threshold of the entire mining industry is also getting higher, and mining has entered the era of large capital clusters. For small and scattered players who are inexperienced or have not yet entered the industry, directly purchasing mining machines and looking for mining farms to host them is already a laborious task. The newly emerging "cloud computing power" model of purchasing and hosting can well solve the pain points of small and medium-sized miners and small and scattered players in participating in mining. The threshold is high and there are many pitfalls. It is also an excellent way for large mine owners and mining machine owners to disperse risks and establish barriers. Large mining farm owners build large-scale mining farms in areas with low electricity costs, which enable them to purchase machines at lower prices and electricity costs, and also have more professional technical teams and rich operating experience. These large mining farms provide services to users remotely through entrusted management or computing power leasing. On the one hand, this lowers the threshold for mining, allowing more small and medium-sized investors to enter the market, and on the other hand, it allows large mining farm owners to lock in profits in advance and reduce risks. However, you must be cautious when choosing a cloud computing platform. Of the hundreds of cloud computing platforms that emerged in 2019, no more than 10%, or even no more than 5%, will survive in the end. What innovations have cloud computing brought this year? What are the future development trends of the cloud computing industry? Competition in cloud computing power will become increasingly fierce this year, and leading brands and platforms will gradually stand out. In the future, cloud computing power platforms will not only compete in traffic and customer acquisition capabilities, but also further compete and consolidate their soft power and compound income capabilities, and refine their ability to serve customers, such as whether they can provide customers with stable and uninterrupted services throughout the year, and how to deal with or compensate for power outages and mining machine damage, such as whether they can provide customers with more financial solutions. In the past few years, traditional miners can only do one thing-buy machines for mining. When the industry winter comes, they can only passively accept it and compete whether they have sufficient funds to survive the winter. Cloud computing power products can more effectively integrate financial strategies for miners to protect their income, such as financial derivatives such as futures, options, and leveraged lending. Although many people still have a vague understanding of cloud computing power, in the future, as the supercomputing industry matures, cloud computing power will surely usher in explosive growth. After all, cloud computing power is a way for more users to obtain Bitcoin through relatively simple and compliant channels, and it is also a way for incremental funds to enter the market. Cloud computing power will gradually move towards financialization. Thank you very much to Mr. Wang Chong, the guest speaker of this issue. This MIU Talk online AMA interview event has come to a successful conclusion. Thanks to the co-organizer of this event, Zhongyan Zhichuang, strategic partners Niuniu Computing Power, Canaan Blockchain, Spider Mining Pool and all media friends for their strong support. This group will continue to be retained, and Miyou Finance will gradually open video live interviews and video online conferences in the future. We look forward to your participation and support! 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