The eighth episode of "Mining News" details review: Evolution and transformation of mining companies

Moderator Zhang Yuan: Today we have invited several guests, all of whom are big names with business lines spanning several vertical fields. Let us welcome:

Caiyunbit CMO: Zhong Rui

Spider Pool Marketing Director: Li Hui

XBIT co-founder: Tao Maowen

Moderator Zhang Yuan: Today's media observer is the reporter Fan Shuhui from Kuangshijie. In the following AMA session, Huihui will represent the media supporting this event: Kuangshijie, Lieyun Finance, Liandede, Star World, Deep Chain Finance, Babbitt, Bitang International, Changqing Finance, Pica Finance, Bitao, Evangelism Finance, Bitcoin Home, Milin Finance, Mokr Headlines, Chain World, Chain Finance, FN.COM, Miyou Finance, Bipu, Qun TV, Shilian Finance, Bolian Finance, Niubiquan, Bibi NEWS, Ostrich Blockchain, Deep Cloud Finance, BITCOIN86, Gyro Finance, Bitcore Finance, Yichuang Times, Niushi Finance, Beibo, Zhongben Finance, Blockchain Network, and ask questions to the guests. Now friends in the group are muted. After the interview, we will leave free Q&A time for everyone.

Host Zhang Yuan: First of all, please let each guest introduce theirselves.

Mr. Zhong: Hello everyone, I am the CMO of Caiyun Bit. Caiyun Bit is a Bitcoin mining portal established in 2013. It currently has several business lines including Caiyun hosting, Caiyun perpetual computing power contract, mining machine mall, mining pool and mining forum.

Mr. Li: The Spider team focuses on the construction of blockchain node ecology. At present, it mainly focuses on all-round and three-dimensional services including mining pools, mining field construction, and mining machine hosting. It has obtained strategic investment from Huobi Group, Node Capital, and CHAINUP CAPITAL. At present, Spider supports the three major mainstream currencies of ETH, BTC, and BSV. It has successfully mined more than 200,000 ETH and 2,000 BTC. The computing power of ETH and BSV ranks among the top five in the world. The founding team members have more than 5 years of experience in the blockchain industry and have been running-in for more than 2 years. They have a deep understanding and practical experience in PoW and PoS mechanisms. The main members of the technical team have more than 10 years of development experience, have participated in the technical construction of multiple blockchain projects, and independently carry out the research and development of mining pool technology.

The purpose of Spider Mining Pool is to take the interests of miners as the starting point, to create a safe, stable and conscientious mining pool, to create the most efficient, comprehensive and attentive service team, and to protect the miners' income.

In the past 19 years, Spider has been unanimously recognized by miners for its guaranteed high mining returns and the meticulous and considerate service of the operation team 24/7. In the exploration and development of the previous year, Spider has grown rapidly into a relatively strong new force in the mining pool ecosystem. Thank you for your trust and support for Spider along the way. Our team is also working on a multi-level mining circle layout this year, and we are very much looking forward to building cooperation with more industry partners to contribute more to a more prosperous mining business.

Mr. Tao: Hello everyone! I am Tao Maowen, the co-founder of XBIT computing power evidence. XBIT computing power evidence is simply a digital proof of rights for computing power confirmation and circulation. Each XBIT is equal to 1T computing power and a standard mining machine with 60W power consumption. Holding XBIT means starting Bitcoin mining. XBIT computing power evidence was first launched in June 2018. After more than a year of product self-verification and market research, it was officially launched to users in November 2019. As an old miner in the industry, if you have any questions about mining, I will do my best to answer them for you.

Host Zhang Yuan: Thank you to all the guests. “Enterprises seek change, and the fittest survive” is a business rule applicable to all walks of life. Today’s guests

As bosses whose business lines span several vertical fields, could you please tell us what reasons and opportunities led to the expansion of products beyond your core business?

Mr. Zhong: At present, the main business of Caiyun Bit should still be the sales and hosting of mining machines. Mining pools and community forums are relatively long-term businesses. The Caiyun perpetual computing power contract we launched last year is a new product. We hope that Bitcoin mining enthusiasts can more conveniently obtain Bitcoin and enjoy industry dividends. A large number of people have been working on cloud computing power since 2013, but after so many years, there are still too few mature products in the market that can truly generate real returns for users. Starting in 2020, Bitcoin mining will enter the next decade. Cloud computing power is the entrance for ordinary people to enter mining and enjoy the dividends of the blockchain industry in the future. We hope to create a more transparent, compliant and affordable cloud computing power product to open the door to the field of Bitcoin mining for ordinary investors.

Mr. Li: Speaking of “survival of the fittest”, it reminds me of a sentence Darwin said in “The Origin of Species”: “In nature, it is not the strongest that survive, nor the most intelligent, but the ones most adaptable to change.”

This is also well confirmed in the business rules. "Being most adaptable to change" is actually a very high requirement for enterprises. It requires enterprises to have good genes and acumen in "the ability to interpret the external environment and the ability to actively seek change" and to have a high-quality team to support it.

The Spider team is a latecomer in the mining pool ecosystem. When it comes to the origin of the establishment of the Spider Mining Pool, we have to start with our founding team. The founding members of Spider are all old Huobi people. At the same time, they have another identity-old miners. In the early days, they devoted part of their energy to the mining business. At that time, they also had experienced old friends in the mining circle. They have always had in-depth and close cooperation, so they have accumulated a lot of valuable experience in the front line of the mining industry. With the increasingly extensive and in-depth understanding of the mining industry, the team began to think and explore the commercial closed loop of the mining industry at a higher dimension. Later, the Spider Mining Pool was established, and then began to invest in the construction of mining farms. At the same time, it continued to cooperate with experienced old friends in the industry to build and provide more high-quality resources for customers' "mining machine hosting" needs. It is understood that many miners have a large demand for cash flow capital turnover. In order to better assist the mining ecosystem, Spider launched a lending business in 2019, supporting mining machine mortgages and Bitcoin mortgages. In addition, it is also exploring some joint mining of graphics card mining machines and mining circle financial services. Some specific situations will be updated under more mature conditions in the future.

To summarize, the aspects mentioned above are centered around the mining behavior of miners, expanding business in three aspects: mining pools, mining farms, and financial services, using technology as the engine and financial services as the means to create an ecological closed loop for the entire industry.

The orderly and smooth development of all businesses is based on the strong risk control awareness and experience of the founder, Mr. Chen. Spider is a very pragmatic and down-to-earth team, which is highly compatible with the style of the mining circle. Mr. Chen also leads the team to seek steady progress with his rich experience, keen sense of smell and accurate judgment.

Mr. Tao: The core members of XBIT were entrepreneurs of traditional private equity and financial technology companies in their early years. Since they used Bitcoin as an alternative asset in 2015, they have gained a lot and entered the Bitcoin mining industry. However, in the process, we deeply feel that the industry threshold is very high, the learning cost is very high, and the barriers to participation are constantly increasing. As an early beneficiary of Bitcoin, we hope to make our best contribution to the industry so that more people can participate in mining conveniently.

In view of this, the XBIT team has effectively solved the problems faced by individuals participating in mining, such as information asymmetry, highly concentrated mining machine supply channels, and irregular industry order, by integrating industrial resources, intelligent management and operation, and tripartite supervision. It has independently designed and implemented multi-machine fusion algorithms, and officially launched computing power evidence - XBIT, to establish a standardized system for mining computing power evidence.

Moderator Zhang Yuan: We know some successful cases of corporate transformation and expansion, but we have also heard of many cases of failure due to excessive expansion and improper capital turnover. For example, HNA, which was recently taken over by the government, was commented by the media as being an irrational strategy. What do you think of this issue? Has your company achieved the expected results after business expansion?

Mr. Zhong: For enterprises, no matter what industry they are in, the only criterion for survival is to have a healthy and stable cash flow of legal currency. As a blockchain and mining company, cash flow management is the top priority. No matter how the external economic environment changes, we tend to choose businesses that can generate stable cash flow, such as mining machine hosting and mining pools, as well as cloud computing power. Mining machine malls and forums are also important traffic entrances. In general, mining companies should rely on projects with good cash flow in order to become bigger and stronger. In addition, the current market situation is still in the adjustment period before halving. Some aggressive companies may choose to use leveraged loans to expand their scale, but they must pay attention to expansion in moderation, because the market adjustment cycle may exceed most people's expectations. Taking the mining farm with the highest capital density as an example, to build a mining farm with a load of 100,000 kilowatts, at least 30,000 mining machines are needed to operate for more than one year to generate effective capital returns. If the infrastructure is simply expanded blindly without traffic, the final result will be to rely on the market conditions for food, or even capital shortages. For mining companies, mining users are the foundation. Caiyun Bit has been committed to serving Bitcoin mining enthusiasts for six years, and we have always been the most friendly mining machine hosting platform for retail miners in the current market.

Mr. Li: The HNA incident happened suddenly, but it was inevitable. HNA was eventually forced to be taken over by the government, which triggered a lot of thinking among entrepreneurs and businessmen. In fact, whether it is a state-owned enterprise or a private enterprise like us, in the process of development, we must not just seek rapid expansion, but seek breakthroughs under the premise of steady and healthy development. Among them, "strengthening our own profitability" is particularly critical, which is also the blood and lifeblood of the company's continued survival.

I mentioned earlier that risk control and hematopoietic ability are actually the most critical factors in determining the survival of an enterprise. The Spider team, led by founder Chen Hua, has always been seeking continuous breakthroughs and development under the important premise of seeking progress while maintaining stability. In this regard, it has given sufficient sense of security to both customers and our own employees, partners and shareholders.

In the implementation of a series of work around the industrial closed loop of the mining industry, the Spider team has demonstrated this vividly, whether in the control of the business direction of the mining pool or in the supervision of mining projects and financial service exploration.

Mr. Tao: This requires specific analysis of specific issues. Some companies have stretched their business lines too far during the expansion process, which has led to an overly large business territory. How can they do well if they do not understand many fields? Secondly, the debt is too high and the cash flow is tight, which is a taboo in the development of an enterprise. But we must act decisively when we see the opportunity, so this must be viewed dialectically. We can be cautious, bold and careful, and be responsible for our own behavior. We at XBIT focus on the Bitcoin mining industry, work hard, and are committed to building the shortest way for users to participate in mining. The signed computing power has reached 6000P, ranking among the top in the computing power share of the entire network. XBIT computing power storage will continue to work hard to provide users with better computing power mining and trading experience, expand the scale of computing power, and make it easy for everyone to own Bitcoin.

Moderator Zhang Yuan: In our industry, there are many small and micro enterprises. Two or three people or even one person can form a mining company. However, for these small and micro enterprises, their business lines are too overlapping and single, and they lack systematic strategic deployment, making it difficult for them to survive. As experienced people, can you give some suggestions to these enterprises and individuals on how to gain a firm foothold in the original business? For those who have already gained a firm foothold, should they develop the secondary or tertiary industry?

Mr. Zhong: Mining companies must first gain a firm foothold and understand their fundamentals before considering other side businesses. For example, in addition to hosting, Caiyun is the earliest mining machine portal in China, and media traffic revenue also accounts for a large part. Last year, Caiyun Bit also organized several offline miner exchanges. We also gave each miner hosted by Caiyun free Chu Orange and peripherals. Later, because the quality was too good, a large number of customers repurchased, causing suppliers to run out of stock in advance. Everything is based on Bitcoin mining enthusiasts, so we have the opportunity to expand other so-called side businesses. Caiyun Bit has only focused on the Pow mining field for six years. This is what we have always insisted on, and in return we have a group of like-minded mining participants. In short, only by keeping the original intention in mind can we succeed.

Mr. Li: I saw the data from a previous report. In mid-to-late 2017, the number of small and micro enterprises included in the list of small and micro enterprises in China exceeded 70 million, and the economic contribution of small and micro enterprises accounted for more than 60% of the total industrial output value. This data still shocked me a little. Small and micro enterprises do have several problems mentioned by the host, especially when affected by factors such as the epidemic and unstable financial environment, their ability to resist risks is relatively weak. But we all know that small and micro enterprises are the cradle of entrepreneurs, the main channel for increasing employment opportunities for the country, and an important driving force for promoting technological innovation and national market economic growth.

As a new industry of this era, blockchain has brought many benefits in the past year with some changes in national policies and attitudes. It is exploring upward in a vigorous state, which provides fertile soil for the breeding and development of many small and micro enterprises in the industry.

Spiders pay more attention to two things: products and services.

On the one hand, mining pools are technology-based products, and they need a professional and strong technical team to back them up in terms of security and stability. As I mentioned earlier, the main members of the Spider Mining Pool technical team have more than 10 years of development experience, have participated in the technical construction of multiple blockchain projects, and independently conduct research and development of mining pool technology. This allows Spider to always provide high-quality technical services and profit guarantees for miners' mining careers throughout the development process. At the same time, in order to optimize and enhance customers' mining experience, Spider launched the App last year and launched a completely revised official website in February this year.

On the other hand, Spider is committed to building the most attentive, comprehensive and professional service team to truly assist miners in solving various problems that they may encounter during the mining process. The team provides 7*24 attentive service, and promptly feedbacks, handles and solves customer problems and needs, creating a mining pool service that makes miners worry-free, safe and secure.

I have shared the above two points about the Spider Team’s experience in their work, hoping that they can provide some reference for everyone.

In addition, as we have discussed and communicated before, companies need to gradually seek new breakthroughs under the premise of steady and healthy development in order to better "survival of the fittest". This requires us to have an in-depth understanding and research of the industry, so that we can more accurately grasp market trends and understand the real needs of the market, so as to explore the survival and development of the company in accordance with market needs. Only in this way can we "cut through mountains and build bridges across rivers" in a changing market environment and seek longer-term survival.

Mr. Tao: As a serial entrepreneur, I would like to share my suggestions for your reference only.

Business positioning must be accurate. Although our industry is very young, it is developing extremely rapidly. All the leading fields have been occupied. Therefore, if you want to carve out a path without the support of big capital, you can only position yourself in a niche vertical field. When you become the first in a niche vertical field, your development will be twice as effective with half the effort.

The importance of ecological construction. Our industry emphasizes ecological development. When you have established a firm foothold in a certain field, you need to cooperate with other businesses to improve the main business. The so-called second or third business can be established by the enterprise itself or in cooperation with other enterprises for mutual benefit and win-win results.

Always keep in mind that our ultimate goal in serving users is to provide a better user experience.

Take our XBIT as an example. When we started our business, we did not rush into the fields of mining machine production, mine construction, and mining pool management. Instead, we integrated resources from all parties to establish the emerging sub-field of computing power trading. Different from traditional cloud computing power, XBIT is mining as long as it is held and can be traded freely. While not changing the essence of mining, it has extremely strong liquidity.

In order to enrich the ecosystem, we cooperated with miners to rapidly expand the scale of computing power, and cooperated with the BuyBit trading platform to make the transaction flow of XBIT a reality.

Host Zhang Yuan: The last question will be left to the media observers. Welcome Huihui, a reporter from Mining Vision.

Host Fan Shuhui: I would like to ask several guests, as the industry gradually becomes compliant and the pace of development slows down, it has become increasingly difficult to reproduce the history of many predecessors who became rich overnight. For newcomers who have just entered the field of digital currency with the dream of getting rich, how should they understand this industry and how should they position themselves?

Mr. Zhong: There is no such thing as a free lunch, nor will there be a free lunch. The digital currency and mining industries are the hardest hit by pyramid schemes and Ponzi schemes, and these dark sides are precisely the driving force behind the legend of getting rich overnight. The so-called getting rich overnight is just a survivor bias. Many people often only see the 1% of people who get rich overnight and fail to see the 99% of people who go bankrupt. Newcomers should learn before entering the pit. Don't get the order wrong, otherwise you may not have the opportunity to learn once you enter the pit. Stay away from leverage and scams. It is the best attitude to always put yourself in the perspective of a student to learn. Of course, mining is the most closely related to the real economy in the entire blockchain industry, and it is also the field that is most likely to allow personal wealth to grow steadily over time in the future. Mining will always be the best way for ordinary people to enter the blockchain industry.

Mr. Li: The Spider team has always had an important principle in doing things, which is to maintain the cultivation of internal strength and truly lay a solid foundation, so that the team can truly have the strong ability to adapt to market changes and seize opportunities and market conditions. I personally agree with this. As expressed in the law of cognitive gravity, wealth will approach the level of cognition. This is the same for both enterprises and individuals. The compound interest effect we are talking about is actually a classic story of quantitative change eventually leading to qualitative change.

Under the general environment of increasing policy support and compliance supervision by the state, the blockchain industry and the mining business I am in are gradually operating in a large-scale and compliant manner. The "bonus period" effect will be slightly weakened, but there are still many opportunities in this industry. For the mining circle, the most popular topic this year is the halving of Bitcoin in May, which will bring a lot of risks to our industry, but there are also many opportunities behind it. "Getting rich overnight" has always been a surface phenomenon with a small probability. In the development of individuals and enterprises, we must always maintain in-depth and rational thinking and cognitive improvement. If the wealth code really exists, I think this is the key.

Mr. Tao: After experiencing wild growth, the blockchain industry has gradually stabilized its development, and compliance is the general trend. Rapid wealth accumulation was only a bonus for the industry development at that time, and only a few people completed wealth accumulation. This is the survivor bias, which makes people who are new to the industry think that there are many myths of getting rich quickly. Blockchain is an emerging industry with extremely fast development speed and huge potential. What we have to do is to participate in it, become an industry contributor, and naturally become a beneficiary. But don't have the idea of ​​getting rich quickly anymore. Doing things in a down-to-earth manner is the right way, doing things in compliance, doing things that contribute to the industry, and doing things that are good for users. I believe the final return will exceed your imagination.

Free Q&A from netizens:

Q1: What is effective capital return?

Mr. Zhong: Effective capital return actually means that the investment in the mine starts to generate net profit after the investment has been recovered. Generally speaking, the investment recovery period of a mine is about two years, and it is greatly affected by market conditions and policies. Therefore, you must be extremely cautious before investing in a mine.

Q2: What new coins will Spider Mining Pool list recently?

Mr. Li: We will release them in a unified manner later.

Q3: What is the xbit website?

Mr. Tao: You can log in to www.buybit.com to see XBIT computing power transactions. Each XBIT is equal to 1T computing power, a standard mining machine with a power consumption of 60W. You can start BTC mining as soon as you hold it. The income is calculated every hour and will be paid to your account at 14:00 the next day.