The profit is 3 times that of S19. Do you dare to buy CKB mining machine?

Text | Huang Xuejiao Editor | Hao Fangzhou

Produced by | Odaily Planet Daily (ID: o-daily)

Nervos, a star domestic public chain, has recently attracted much attention due to its extremely high mining returns.

After the "3.12" crash, its mining income has exceeded other PoW currencies including Bitcoin, with obvious advantages. During the same period, CKB has also become the "main product" of some dealers, but how long can this short-term income last? How big is the potential risk of buying a mining machine? I am afraid that many investors who rushed into the market have not yet seen it clearly.

Mining artifact: Is it not a dream to get your money back in 5 days?

After the “3.12” crash, it can be said that there are no more mining machines in the mines that can “make a lot of money”.

Even for the Ant S17+ and Shenma M20S+, which have the most considerable returns, the "electricity cost ratio" (electricity expenditure/daily income) is close to 50%. Based on the current price of Bitcoin, the difficulty of the entire network and the electricity price of 0.38 yuan/kWh, the daily income is less than 50 yuan.

But "when God closes a door, he often opens a window for you."

Looking at the mining machine profit rankings of major mining pools, the two CKB mining machines - Toddminer C1 and Ant K5 - lead the way in mining net profits.

Among all the mining machines for major PoW currencies, the two CKB mining machines have the highest returns

What is the origin of these two magical machines?

Toddminer is a domestically produced "small mining coin" mining machine brand.

According to F2Pool, it started research and development when Nervos (2019) just announced the consensus algorithm, which took 6 months and was finally officially launched on March 10 this year. At the same time, as the first Asic mining machine on the Nervos CKB network, due to its ultra-high mining performance, it is priced at 35,000 yuan, which is much higher than the current mainstream Bitcoin mining machine.

Thanks to the performance of the dedicated chip, Toddminer C1 completely defeated other FPG miners for CKB shortly after its launch.

Data source: F2Pool

It is understood that before the advent of Toddminer C1, the most ideal mining machine for CKB mining was Blackminer F1. However, considering the current CKB price, network difficulty and electricity price of 0.38 yuan/kWh, the mining income of F1 is not enough to pay the electricity bill.

At the same time when Toddminer C1 began to build momentum and ship, Bitmain also announced the pre-sale of Antminer K5 a little later.

Due to its high performance and high cost-effectiveness, there were many people in the circle of friends and on the Internet who were "strongly optimistic" about Ant K5. "According to the current computing power, the daily output of Ant K5 is 51649.475 CKB, which is about RMB 2,408. Based on this, it can be recovered in 5 days."

Against this backdrop, the Ant K5 was snapped up by miners and dealers within minutes.

What is the difference between the two mining machines produced at the same time?

From the performance point of view, Toddminer C1 is a clear winner over Antminer K5. Its energy efficiency is nearly 40% higher than that of Antminer K5, and its computing power (mining income) has a 37% advantage.

But good machines are often expensive. The launch price of Toddminer C1 is 35,000 yuan. Odaily Planet Daily learned from several dealers that its current price is between 21,000-29,000 yuan. Taking the median value of 25,000 yuan, the price of Toddminer C1 has fallen by 28% within the month. The launch price of Antminer K5 is 9,800 yuan, and the current price is between 8,500-9,500 yuan, a decrease of nearly 10% within the month.

This indirectly shows that the market generally believes that the price of Antminer K5 is fair, while the previous price of Toddminer C1 is difficult to accept. Even now, the price of Toddminer C1 is still 180% higher than that of Antminer K5.

In addition to its performance advantages, there is another reason for the "premium" of Toddminer C1 - its delivery time is 11-36 days earlier than Ant K5. This 10-day to half-month "exclusive time" for Toddminer C1 mining will bring considerable profits to users who purchase this mining machine.

But will miners buy Toddminer C1 for this "temporary benefit"? Or looking at the current market, Antminer K5 is about to be shipped, and these two mining machines have the highest returns among all PoW mining machines. Should miners buy them? Can they buy them?

Beware! The “mining bonus” may only last for 3 days

People's concerns about financial products are that "I want your interest, and you want my principal." Investors often buy products because of the "high returns" they claim, but end up not making much interest, and instead lose their principal.

Mining small coins should also be wary of similar risks. The dynamic balance principle of the mining market is: when the mining income of a certain currency is significantly higher than the market level, it will attract profit-seekers; but as competitors join, the computing power and difficulty of the entire network will continue to increase, and eventually enter a state of "computing power saturation". In the absence of major market conditions and mining machine iterations, the computing power of the entire network, difficulty changes, and mining income will tend to be flat.

When it comes to CKB mining machines, it is difficult for ordinary investors to estimate how long the mining bonus period from "huge profits" to "saturation" will last (unless they are manufacturers who have control over the shipment volume of mining machines).

Now, Toddminer C1 is on sale. Looking back at the estimates made by miners before purchasing, we will find that the static profit model is almost invalid.

Based on the historical daily revenue data of CKB provided by Sparkpool, the second largest mining pool of CKB, Odaily Planet Daily calculated the theoretical daily revenue change of Toddminer C1 one week after its delivery.

Data source: Sparkpool

Statistics: Odaily Planet Daily

As can be seen from the above figure, within one week of Toddminer C1 being shipped and put on the shelves, the theoretical daily income plummeted by 75% after 3 days due to the increase in the computing power of the entire network and the decline in the currency price; and the payback period increased from the initial 21 days to nearly 3 months (an increase of 295%).

Statistics: Odaily Planet Daily

After March 16, Nervos' total network computing power increased by 110% again. At the same time, the price of CKB coin showed little improvement. It can be seen that the daily income and payback period of Toddminer C1 miners were hit again.

CKB's total network computing power and coin price, data source: Sparkpool

If miners are not prepared for a sharp drop in profits and an infinitely extended payback period before buying mining machines, then they can only throw up their hands, smile bitterly and say, "Fuck, I'm stuck again."

Next, what makes miners who have already purchased Toddminer C1 feel even more powerless is that after all 2,700 Antminer K5s are put on the shelves, the computing power of the entire network is expected to increase by 140%.

Miners selling pressure? Private equity selling pressure? Can CKB still be mined?

The future market is unpredictable. Back to the present, what does such a “high-yield” mining reward mean to the entire network?

On the bright side, Nervos is attracting important ecosystem participants through economic incentives, which increases the cost of attacking Nervos CKB and makes the network more secure.

The bad side is that when more and more investors pour in, it will bring medium- and long-term selling pressure to the market.

“It is meaningless if you don’t mine or sell this machine now, because all profit expectations are based on the current computing difficulty and the current currency price. For miners who are really looking for profits, ‘mine, sell and withdraw’ is inevitable,” concluded a senior mining industry insider.

In addition to the entry of "speculative miners", investors are also worried about the selling pressure caused by the unlocking of CKB private equity and other related parties.

According to Nervos' design, there is no total upper limit for CKB. The genesis block will generate 33.6 billion CKB, of which 8.4 billion will be destroyed immediately, and the rest will be distributed to relevant participants. The unlocking method is also slightly different (see the figure below). Among them, some tokens of private placement, team and strategic partners (a total of 2.8 billion) will be unlocked on May 1 this year. Will it trigger another round of decline?

Of course, putting aside the perspective of short-term speculation, Nervos, as a public chain with highly original design and unique economic mechanism design, still has many aspects worthy of attention and participation.

If you are a miner or coin holder who prefers long-term participation, would you choose to enter the market at this time?