Terminal mining ends: Alibaba products delisted, 360 Technology subsidiary fined, product holders turn to second-hand transactions

Editor’s note: This article comes from CaijingOnchain (ID: CaijingOnchain), author: Chen Yi.

In the current cryptocurrency ecosystem, mining can be said to be one of the industries with the lowest risk and the most stable profits. First, the mining giant Bitmain sent three people, Jihan Wu, and Yuesheng Ge, to the Hurun Wealth List, and then Canaan Inc. was listed on the Nasdaq and became the "first blockchain stock."

To a certain extent, in the cryptocurrency ecosystem, miners are at the top of the food chain. Although some regions resist the development of mining due to high energy consumption and other reasons, in the final analysis, mining has not touched the legal red line. Compared with other fields with unclear profit models, mining has a clear profit model and huge profits, and compared with exchanges, mining has an absolute advantage in compliance.

This has become the entry point for many traditional companies to enter the cryptocurrency industry. However, unlike Bitmain, MicroBT, Canaan Technology and other mining companies, these companies rarely independently develop professional mining machines, but instead combine them with their existing businesses, using the names of terminal mining such as "router mining" and "entertainment mining" to launch terminal equipment linked to blockchain and self-issued cryptocurrencies.

Since 2017, a large number of companies have been frantically making money, selling hardware devices equipped with blockchain concepts at high prices while issuing their own coins to reap profits in the secondary market. Among them are listed giants such as Alibaba, 360 Technology, Lenovo, and JD.com.

Now, more than two years have passed, and the concept of terminal mining has come to an end, and some startups have also come to an end. However, some listed companies that made a lot of money from the concept have quietly turned the page on history, leaving hardware buyers holding the terminals they purchased at high prices, with no way to protect their rights.

Dozens of listed companies have deployed hardware mining, and giants such as Alibaba, 360, Lenovo, and JD.com have entered the game to plunder gold

Caijing.com Chain Finance has counted the main products in the field of hardware mining and found that 13 companies have launched 12 products since 2014. These products are all linked to corresponding cryptocurrencies/points, which can also be traded or cashed out through certain channels.

Among these 15 companies, there are many listed companies. Although these listed companies are listed in multiple exchanges such as the Shanghai Stock Exchange, Shenzhen Stock Exchange, New Third Board, Nasdaq, and New York Stock Exchange, without exception, these companies all originated in mainland China. Therefore, to a certain extent, terminal mining is also called "mining with Chinese characteristics."

According to statistics, the listed companies that have directly or indirectly launched terminal mining products are: Xunlei (NASDAQ: XNET), Lenovo Group (HK: 00992), Chengdu Diting Technology Co., Ltd. (836554), JD.com (NASDAQ: JD), 360 Technology (SH: 601360), Baofeng Group (SZ: 300431), Shenzhou Taiyue (SZ: 300002), Alibaba (NYSE: BABA), 2345 (SZ: 002195), and Chenxin Technology (SZ: 002447).

In terms of time, except for Youku Router (2014) and New Router (2016), the other 7 products launched by the other 10 companies were all launched in 2017 and 2018, which were also the two years when the concept of terminal mining was the hottest.

In fact, the real development period of Youku Router was also in 2018. It is understood that Youku Router's parent company, Youku Tudou Group, was also acquired by Alibaba Group in 2015. In early 2018, after Alibaba failed to launch "Majibao", it began to promote Youku Router. It was only after being taken over by Alibaba that Youku Router began to develop.

Public information shows that Chengdu Diting Technology Co., Ltd., a NEEQ company in which Lenovo Group and JD.com have stakes, launched newifi3 (new router) in October 2016; 360 Technology launched 360 Shared Cloud in January 2018, and launched Taiqimao in February 2018 through a subsidiary in a joint venture with Shenzhou Taiyue; Lenovo Group independently launched Jujinbao in April 2018.

Without exception, all of the above products are equipped with tokens or points that can be exchanged for the issued coins.

It is understood that Lenovo and JD.com are both controlling shareholders of Chengdu Diting Technology Co., Ltd. (Chengdu Diting), which is the developer of the popular product New Router (token: NEWG). After the traffic of New Router was exhausted, Lenovo once again launched the Nuggets linked to NEWG in April 2018.

NEWG (digital gold) can be exchanged for EGOLD at a 1:1 ratio, and EGOLD was launched on the Leidun Exchange for secondary market trading in October 2019. (Note: Chengdu Diting has been delisted from the New Third Board at this time)

According to market data, EGOLD's price has been declining since its launch, gradually returning to zero in April this year, and was officially removed from the shelves in mid-April.

In addition to independently launching 360 Shared Cloud (360 Cloud Diamond), 360 Technology also jointly established Taiyue 360 ​​(Singapore) Pte. Ltd. (Taiyue 360) with Shenzhou Taiyue in Singapore, and Taiyue 360's wholly-owned subsidiary Beijing Shenzhou Taiqi Interactive Technology Co., Ltd. (Taiqi Interactive) launched Taiqi Cat (TQC).

At present, Taiqimao has stopped sales, but according to data from Taiqimao’s official website, more than 1 million people have reserved Taiqimao entertainment cloud terminals, each priced at 1,299 yuan.

After it was launched, Taobao, Tmall, JD.com and other platforms also launched Taiqimao.

It is understood that TQC is open for withdrawal from 11:00 to 18:00 every Tuesday, and the withdrawn TQC coins can be traded on the Wankejia trading platform and the Fukuang Exchange. Although the official wallet of TQC did not initially open the transfer function, the KEYSTORE wallet file can be imported into the IM wallet for transfer.

Among them, the Wankejia trading platform officially launched TQC trading on April 27, 2018. In addition to TQC, the platform has also launched Jilu Points, Xinlu Digital Gold, Chainlink and Phicomm's DDW.

Several companies made huge profits to save their financial decline

In this wave of terminal mining, several companies have made huge profits by using the concept of terminal mining, helping their parent companies to gain a large amount of cash flow when the original business is not profitable. The most representative of them are Xunlei, 2345 and Chenxin Technology.

In the field of hardware mining, Thunder can be regarded as a representative enterprise. Whether in terms of creativity or profitability, Thunder can be regarded as a leader.

Although some hardware mining products were launched as early as 2014, this field did not really begin until Thunder entered the market in August 2017 and performed a successful "revenue carnival" for the market.

In August 2017, Xunlei took the lead in launching Wanke Cloud and issued a cryptocurrency called Wanke Cloud (Chaink) based on Wanke Cloud. Public information shows that with the help of Chainlink, Xunlei's revenue increased by 128.5% year-on-year in the fourth quarter of 2017, the highest record since Xunlei went public, and its stock price soared from US$4 to US$27 in two months.

At the end of 2017, Chenxin Technology followed in the footsteps of Thunder and officially launched Jingdou Cloud. During the pre-sale period of the "first generation Jingdou Cloud", Chenxin Technology's stock price soared by nearly 80%, reaching a high of 8.68 yuan.

As the dividends of the "first generation of Jingdou Cloud" were exhausted, Chenxin Technology quickly changed its strategy. After launching Jingdou Cloud 2.0, it introduced the exchange channel of BATT (Boying Chain Token), allowing users to use GCP points to exchange BATT at a certain ratio. BATT was launched on AllCoin and BCEX exchanges in June 2018. It is understood that BATT is now renamed PONY. PONY can be used as currency to purchase goods, and GCP can be directly exchanged with RMB through second-hand websites such as Xianyu.

The upgraded version of Jingdou Cloud sold hardware at high prices while issuing coins to reap the secondary market of the cryptocurrency circle. This also became the template routine for hardware mining later.

Public data shows that on August 31, 2018, Chenxin Technology released its 2018 semi-annual report, which showed that the company achieved operating income of 210.8409 million yuan, a year-on-year increase of 42.77%.

In March 2018, 2345 launched Octopus Planet. Through "mining", Octopus Planet users can obtain a kind of points called STC. The profit model of 2345 is exactly the same as that of Chenxin Technology.

Although 2345 publicly denied disguised ICO and claimed that it would not conduct any ICO operations, STC was eventually listed on two digital currency exchanges, Coineal and Biclub.

On February 25, 2019, Ersanbawu released its latest performance report showing that due to steady business growth, the company achieved an unaudited net profit attributable to shareholders of listed companies of 1.365 billion yuan in 2018, a year-on-year increase of 44.07%.

Where can investors protect their rights after the end of terminal mining?

In January 2018, the China Internet Finance Association issued a "Risk Warning on Preventing Disguised ICO Activities". In the risk warning, the China Internet Finance Association stated, "Since October, "virtual digital assets" issued in the IMO mode include Chainlink, traffic coins, BFC points, etc. Taking Xunlei's "Chaink" as an example, the issuing company actually used "Chaink" to replace the legal currency payment obligation for the services contributed by the participants. It is essentially a financing behavior and a disguised ICO."

An announcement from the China Internet Finance Association sounded the alarm for the investor market, but as the announcement does not have any real legal effect, some companies are still launching new terminal mining products under the temptation of huge profits.

According to statistics, the terminal mining products launched after January 2018 include the Shared Cloud launched by 360 Technology (January 2018), Taiqimao launched by a subsidiary jointly founded by 360 Technology and Shenzhou Taiyue (February 2018), Nuggets launched by Lenovo Group (April 2018), and Octopus Planet launched by 2345 (March 2018).

It was not until the end of 2018 that the Octopus Planet, Jilu Router and Xinlue of Ersanbawu collapsed one after another, and Thunder also cut off Wanke Cloud, and the terminal mining trend came to an end.

According to the rights defenders who told blockchain media Internet Pulse, 2345 has made at least 500 million yuan from it. In December 2018, many Octopus Planet buyers surrounded 2345's Shanghai headquarters, which attracted reports from many media. But so far, these rights defenders have not achieved satisfactory results.

A search on a second-hand goods trading platform shows that the official price of a new Octopus Planet is 1,299 yuan, but the second-hand price is only 125 yuan, and few people are interested in it.

Unlike the massive rights protection case of Octopus Planet, more hardware mining equipment was taken off the shelves quietly.

In April this year, Alibaba announced that it would delist all Youku Router-related products and services on April 23. The announcement showed that the delisting was due to the impact of product technology iteration and product strategy adjustment.

It is understood that after 24:00 on April 22, 2020, Alibaba will no longer support the hardware maintenance of Youku Tudou Router and will stop the "intelligent network resource bandwidth recovery and feedback statistics software service" provided by the "Youku Tudou Router System Software Service".

This news means that Alibaba Group has completely withdrawn from the terminal mining field, but it did not attract market attention.

The Taiqimao, a joint venture between 360 Technology and Shenzhou Taiyue, has also long since died. The product has been discontinued.

According to the development history of Taichi Interactive, Taichi Cat is one of its main products. Since 2018, Taichi Cat has been the main product of Taichi Interactive.

However, since October 2018, neither Taiqimao nor TQC ecosystem has been updated. According to the official website, the last update was in October 2018 when TQC Legend of the Gods was launched.

The official Weibo account of Taichimao stopped updating in August 2018.

A Taichimao buyer said on the Black Cat Complaints website that Taichimao has not made any development progress until now and has simply disappeared. The progress on the white paper has also stopped for nearly two years.

According to a legal document issued on February 18, 2020, Taiqi Interactive made an illegal profit of 148,849 yuan by selling 3,167 Taiqimao entertainment cloud terminals without obtaining a 3C certificate. It was fined 50,000 yuan and its illegal gains were confiscated.

In addition, Taichi Interactive was also involved in a number of contract disputes with Taichi cat buyers. In these contract disputes, the buyers believed that they had been defrauded and demanded that Taichi Interactive return the goods, but most of the buyers ended up losing the case.

Like Taiqimao, products such as Baofeng Group's Baofeng Boku Cloud, 360 Technology's Shared Cloud, Alibaba's Youku Router, and Chenxin Technology's Jingdou Cloud have all been removed from the shelves by the authorities, and owners who have no way to return their products have flocked to various second-hand goods trading platforms, and the transaction prices are all far lower than the official selling prices.