The fifth episode of "Mining Simulcast" is a full review: Miners' money-making rules in the context of industrial interconnection

Hello, fellow miners and coin lovers, I am Zhang Yuan, the editor-in-chief of Wabi.com. This issue of "Wabi News Broadcast" is exclusively sponsored by the one-stop digital financial platform Matrixport (a Singapore financial services institution). The topic we are going to discuss today is: The rules for miners to make money in the context of industrial interconnection.

The guest lineup of this issue is quite strong, and it can be said that it almost covers the entire industry chain of encrypted digital currency. They are:

BTC.COM CEO: Solemn

Bitmain Regional Sales Director: Dai Pengcheng

Matrixport Matrix Account Manager: Chen Zhenghe

Matrixport Matrix Account Manager: Li Yang

One Person One Coin (BTC) Consensus Community Initiator: Wang Yang

Today's media observer is Xiao Xiao from DeepChain Finance. In the following AMA session, Xiao Xiao will represent the media supporting this event: Golden Finance, Lieyun Finance, ChainDD, StarWorld, DeepChain Finance, Babbitt, Mine Vision, 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, DeepCloud Finance, BITCOIN86, Gyro Finance, Gyro Q&A, Niushi Finance, Beibo, Zhongben Finance, Block 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.

Zhang Yuan

As usual, please introduce yourselves first.

solemn

I am Zhuang Zhong from BTC.com. I started working in a mining machine company at the end of 2012, joined Bitmain in 2015, and am fortunate to be in charge of BTC.com. I am very happy to share some things here!

Dai Pengcheng

Hello everyone, I am Dai Pengcheng. I have been engaged in mining machine sales for more than 4 years since I joined Bitmain. I am familiar with many miner friends. I am very happy to share some things here this time. Thank you for listening!

Chen Zhenghe

Hello everyone, I am Chen Zhenghe, the account manager of Matrixport (a financial service institution in Singapore), mainly responsible for key customer business and channel business. Before that, I worked in the sales department of Peter Continental Mining Machines, responsible for the Antbox container mine business. I am very happy to participate in the mining broadcast event, thank you!

Li Yang

Hello everyone! I am Li Yang, the account manager of Matrixport. I am mainly responsible for the product sales and customer service of Matrixport, focusing on lending and trading. I have worked in the mining machine sales department of Bitmain (2017-2019). I am very happy to have an online discussion with you today and learn together. Thank you.

Wang Yang

Hello everyone, I am Wang Yang, nickname: Zhanjian Huaijiu Jianghu, an old miner since 2011, the initiator of the China Bitcoin Consensus Community (one person, one coin), now mainly engaged in mining, hoarding coins and preaching Bitcoin. The mission of our community is to let more people hold Bitcoin and let more people become Bitcoin miners. I hope everyone will support the China Bitcoin community.

Thank you to the guests. After listening to the introduction, you should know why I said that they can cover the entire industry chain, from the top mining machine manufacturers, mining pools, financial platforms, to the top miners. They are all here today, so let's get straight to the point.

Zhang Yuan

In life, we often discuss the question of whether the chicken or the egg came first. I would like to ask all the guests to review together how the fields you represent have evolved and grown in the entire industrial chain?

solemn

The direct customers of mining pools are usually what we call miners. This includes miners of all sizes with their own computing power, as well as various derivative concepts, such as cloud computing power providers. Mining pools essentially solve the pain point that the benefits of decentralized computing power cannot be stably guaranteed. Due to the problem of luck in mining, miners with small computing power may not have any benefits in long-term mining, while mining pools can continuously and stably guarantee the benefits of miners. This applies to miners of all computing power. Mining pools, as a hub connecting miners with downstream financial industries and upstream mining machine businesses, have brought together a large number of miner resources. The development of mining machines is driving the progress of mining pool computing power business. At the same time, the evolution of mining pool business also provides rich financial scenarios and users for digital currency financial services.

Dai Pengcheng

Mining is the process in which miners contribute their computing power to maintain the security and stability of the network and thereby obtain reward coins. Customers can purchase mining machines and connect to mining pools to mine, and can save the digital assets obtained or trade them on trading platforms, or obtain some additional income through some financial instruments. It can be seen that mining machine manufacturers handle a key upstream position in the entire industry chain. The computing power, power consumption ratio, and number of machines provided by mining machine manufacturers have a very important impact on the computing power of the entire mining network, the increase or decrease in difficulty, the layout of mining field resources, and the income of miners. When setting the price of mining machines, mining machine manufacturers will also strictly and carefully consider the investment income and payback period of miners.

From the 55nm process in the bull market of 2013 to the 16nm in 2016, and then to the current 7nm, the development of BTC has not only promoted the growth of computing power and the popularization of the POW consensus mechanism, but also made great progress in mining chip (ASIC) technology. We at Bitmain have also been at the forefront of the industry, developing high-computing-power, low-power mining machine products to provide users with the ultimate mining experience. If you have any needs to buy mining machines, you can contact our WeChat official account - Ant Pre-sales Service.

Chen Zhenghe

As the scale of the entire crypto asset market expands, the entire industry is gradually maturing. Practitioners need more diversified financial services and products to meet the increasingly vigorous financial needs of the entire ecosystem (deposit, exchange, loan, investment), improve liquidity, and make better use of market funds.

As a one-stop financial service platform in Singapore, Matrix can fill the multi-dimensional financial needs of miners in digital currency asset storage, trading, lending, and value-added through the interconnection of basic financial businesses, just like traditional financial institutions.

From the perspective of basic business, our customizable trading services can meet customers' needs for various types of transactions;

The financial instruments are more diverse, with the first dual-currency and preferential purchase products, as well as a wide variety of financial management options for everyone to choose from;

The lending service is safer and more reliable, with features such as 0-interest lending, pledging fiat currency to borrow digital currency, and debt-for-wealth management;

The custody is more professional and compliant (Swiss/Hong Kong licenses, bank-level security measures, corporate financial system establishment, etc.).

We will provide more professional financial tools to support the development of the entire industry. Thank you!

Wang Yang

I started mining in 2011. At that time, we used graphics cards to mine Bitcoin. The profit from mining was not very high. The electricity cost of mining one Bitcoin was 10 yuan. When Bitcoin fell to more than 2 US dollars, I only made a few yuan for one Bitcoin. Taking into account the depreciation of equipment and labor, there was basically no money to be made. I just hoarded some coins. However, we persisted in mining until 2013. In the meantime, I also did other businesses to supplement mining. When Bitcoin rose to around 1,400 yuan in 2013, my Bitcoin and equipment were basically sold out. Although I made a lot of money, I temporarily left the mining industry. Later, I mined PTS for fun. I really got back into the industry in 2016. At that time, the Bitcoin market rebounded. My friends knew that I had mined Bitcoin before, so they asked me to lead them in mining, and I started mining again. After I came back, I found that the entire mining industry had changed. Everyone was using professional mining machines to mine, and graphics cards had long been used. I withdrew from the Bitcoin mining stage, so basically we started from scratch, re-learned, and re-experienced the market. We also experienced many twists and turns in the process. Fortunately, my partner and I still had some experience, so we gradually got on the right track and have been mining until now. We have our own mining machines, and we also operate a mining farm. We have also brought a lot of novices into mining. Generally speaking, my own experience is that mining is not a business that can immediately see huge profits. If you want to make more profits in mining, you must hoard coins while mining. Of course, many people also asked me why I didn’t just hoard coins. Friends who ask this question usually have never mined. Mining is actually obtaining Bitcoin at cost price, and mining obtains three parts of income: mining machine appreciation + coin appreciation + mining farm appreciation, while hoarding coins only has one part of the income from coin appreciation, so I chose mining, and mining is more participatory, and it is better to hold the coins, so the industry generally believes that mining is leveraged investment in Bitcoin.

Also, after nine years of participation, I think there are actually two most important things in the Bitcoin world: getting more people to hold Bitcoin and getting more people to participate in Bitcoin mining, because these two things are about expanding the consensus base of Bitcoin. Only when the Bitcoin consensus is greater can the investment of all of us participants get greater returns. I hope that more friends can join us in preaching Bitcoin and achieve a win-win situation for the entire currency circle, mining circle, and chain circle.

As various sub-sectors evolve and merge, today's mutually beneficial and symbiotic industrial model has been formed. Even the model of laying eggs by borrowing chickens has become possible in the industry. We would like to thank miner-friendly platforms like Matrix, and thank all the guests for their contributions to the industry.

Zhang Yuan

Mr. Wang will answer the second question. For miners, every link in mining is a multiple-choice question. If you make the right choice, you can make more money. As a senior miner, Mr. Wang should have a deep understanding of this. Mr. Wang, please summarize, what choices a newcomer will face from entering this industry to gaining a foothold in the industry?

Wang Yang

The time when miners enter the market is very important. They must enter the market at the right time to participate in mining, so that they can get twice the result with half the effort. Only the times make heroes, not heroes make the times. The selection of mining machines should be multi-dimensional, and assets should be reasonably allocated. First of all, to mine mainstream currencies, such as Bitcoin, the selection of mining machines should be based on the most advanced low-power and high-computing mining machines from mainstream mining machine manufacturers, such as Bitmain's s19 and Shenma's m30s. As a long-term investment, although the cost is a little higher and the payback period is a little longer, the proportion of electricity costs is low enough, the life cycle is long, and the moat is deep enough. In addition, it is still necessary to allocate some s9, which was once a mainstream machine, at the right time, provided that the price is extremely low, and part of the funds can be bet. After the coin price soars, this machine has the highest doubling rate and a very rich investment return ratio. The investment strategies of the two machines should be hedged, so that there are response plans for the rise and fall of the coin price. The mining pool must choose the mainstream mining pool. btc.com, Biyin, and Fish Pool rank in the top three. They are the most stable.

In terms of financial management, as a miner, I mainly hedge when the coin price is relatively high to lock in mining income. I personally use spot to sell the electricity bill for a period of time, so that even if the coin price falls in the future, my electricity cost has been locked in, and it will not affect my mining income for the time being. If the coin price rises, my mining machine and the coins I mine will also appreciate in value. I will just earn a little less on the electricity bill, and the income is still guaranteed. Of course, you can also choose some hedging supporting products specially designed for miners, but you must research it yourself. It is recommended to choose a leading platform, which is more secure.

Zhang Yuan

With Mr. Wang’s preparation, we have the following question. The multiple-choice question for miners is the calculation question for the other guests. Please ask Mr. Zhuang, Mr. Dai and Mr. Li to calculate for everyone. In your areas of expertise, what should miners do to make the most money in this multiple-choice question?

solemn

For mining pools, revenue is undoubtedly the core concern of miners. In the traditional model, the difference in fees is the focus of attention, but with the competition among major mining pools, the fees are becoming more and more transparent, and miners are more familiar with the calculation of revenue. It is also easy to be caught if they tamper with the revenue. In terms of stability, everyone is constantly improving. BTC.com's open source mining pool solution is currently serving many different mining pools.

The hot topic of recent attention may be the machine gun pool, which is also due to the recent major currencies. We have also cooperated with MatrixPort to open the internal test of the machine gun pool for major customers. In this mode, the miner's computing power will automatically select the appropriate currency according to the current currency price. The income can be freely configured on the MatrixPort side. The exchange strategy can be easily exchanged. We are also constantly working with MatrixPort to try various financial products to increase and protect the income of miners. For novices, you can also try reliable cloud computing products to enter the field of mining. Mining pools also have in-depth cooperation with some partners. For high-end players, you can also get customized support in various links through Bitmain.

Dai Pengcheng

How can miners make the most money? This is a good question. Customers who have persisted in mining for so many years have made money. As far as mining itself is concerned, it is very important to choose the right mining machine products, stable and reliable mining resources, and a good mentality of holding coins. Of course, this is a very simple statement, and it requires miners to seize the opportunity.

For mining machines, you need to learn how to calculate the payback period of mining machine investment, understand the proportion of electricity costs, the increase in difficulty of the entire network, and the timing of replacing old and new machines. In general, mining has a long investment cycle and has a certain degree of stability. When the price of the currency rises sharply, the value of the currency standard increases, and even the price of second-hand mining machines will rise, and the investment rate of return will double significantly; when the price of the currency falls, pay attention to the break-even point, the difficulty of mining is stable, and the currency is the basis. You are welcome to communicate with me at any time to discuss your investment needs and plans. I will help you give some advice and help to choose the right mining machine for mining and make more money.

Li Yang

"Children make choices, as adults we want them all"

The two main demands of friends in the circle are mining and buying coins. As the market gradually matures, a bull market like that in 2017 will certainly be difficult to see again. The profits from mining or coin speculation will definitely become more and more stable. So, in order to increase profits, we should effectively use leverage and other tools within a reasonable range to achieve personal wealth growth.

From the product perspective, we will provide interest-free pledge loans with no liquidation or margin calls. Through the operation of pledge loans and leverage, we can expand our investment scale (buy more coins/mining machines). At the same time, the low leverage ratio and the mechanism of no liquidation will significantly reduce the risk of playing with contract leverage on exchanges. In the case of bullishness, obtaining cash through mortgage and paying electricity bills can also increase the expected income from mining and avoid missing out.

At the same time, we also provide the function of automatic replenishment and renewal (normal mode). If the expected profit target is not achieved after the expiration, you can choose to renew the loan (pay interest without repaying the principal and then mortgaging again), which is more convenient and quick.

From a personal perspective, lending, as a low-leverage tool, is a good choice to earn more profits if future trends are clear. Matrixport can provide a variety of lending products, and everyone is welcome to choose.

All the bosses have really dug out all their assets. (Pay attention) Today’s mining strategies have been compiled into unique secrets that can be used as industry training materials. Hurry up and take out your notebooks.

Zhang Yuan

The fourth question, which is also a hot topic in the industry recently, is what opportunities and challenges will this year's Bitcoin halving bring to miners? In what aspects should miners prepare to cope with it?

solemn

Now, the most important thing for halving is how to calculate the profit of mining machines. In particular, do not forget the impact of halving. Users who buy second-hand mining machines may be more careful, because with the coming of the flood season, some old mining machines may start working again, but these mining machines may have been overclocked many times and modified in various ways. So for these machines, their lifespan will definitely be affected. And for new users, they must choose the mining machine with the best performance.

This is the only way to ensure that you can remain in such an unbeatable position for a period of time in the future. Assuming that the mining income is similar to the electricity bill in the future, some miners with high costs will definitely withdraw, and in the end, those with the highest overall advantage will always be able to persist and ensure that they can always make a profit. Therefore, mining machines are undoubtedly the most fundamental point. Of course, power resources, mining resources, etc. all need to be laid out in advance and actively prepared. For ordinary users, you must still pay close attention to the fluctuations of various prices.

For this kind of problem, I believe we should look for more financial products to hedge some risks and ensure our own returns. In addition, we can also obtain some extra income through some value-added financial services, which can help us to some extent in such a situation.

The pressure faced by our mining pool is the same as everyone else, because the halving will definitely affect our BTC and BCH revenues. So this will also prompt the entire industry to explore new opportunities and new cooperation points. To expand their own income channels, I believe that this process should also prompt everyone to develop some new business forms.

Dai Pengcheng

BTC is facing its third halving in history, and mining in 2020 will be a very important opportunity. In the past, Bitcoin halvings have always brought about a sharp rise in the price of the currency and the arrival of a bull market.

At the same time, some miners also face some challenges and choices. In view of the sharp drop in revenue after halving, the gradual elimination of high power consumption ratio machines, and the fluctuation of the computing power of the whole network, how to prepare for mining is a question that everyone is concerned about.

I personally recommend choosing low-power, high-computing machines this year to improve the machine's own risk resistance and choose a stable power resource channel throughout the year. Mine more BTC in the short period before the halving, and after the halving, make a long-term layout to increase computing power based on the currency price and market conditions, and wait for the bull market to come.

If the coin price remains unchanged, after the halving, many old models in thermal power and year-round power mining farms will face shutdown (such as S9), and will switch to the flood season. The period when machines are removed from the shelves is a period of reduced computing power. From the current point of view, the production capacity of mining machine manufacturers this year is not enough to fill this part of the computing power gap in the short term. It is predicted that this part of the computing power will be 20%-30%, that is, between 30E-40E. Thermal power and year-round power farms continue to run S17 and T17 series machines, which will not be greatly affected, and it is still early for the coin price to shut down.

The price of the currency and the computing power of the entire network will be in a dynamic balance, maintaining a certain profit for new models. If the price of the currency remains unchanged, the old models will be gradually eliminated by the market when the flood season comes.

Customers with high power consumption and low computing power can make a judgment when the flood season comes. If there are no low-cost electricity resources, customers are advised to sell second-hand old models at this time and replace them with mainstream high-computing power models from manufacturers, and continue mining to earn the difference in revenue after the halving. When purchasing high-computing power machines, consider the impact of the halving on revenue, and also consider the difference in computing power and difficulty adjustment caused by the elimination of old models when calculating revenue.

Li Yang

“Opportunities and challenges are two sides of the same coin. If they are solved, they are opportunities; if they are not solved, they are challenges.”

The output is halved, and miners are the group most directly affected. Under the premise of maintaining the stability of the currency price, the halving of income will prolong the payback period of the mining machine. Here we can have two solutions

First, we should have a correct investment mentality. The bull market in 2017 was just a product of the abnormal development of the market. It will eventually be gradually rationalized and institutionalized. Buffett's investment return rate in the past ten years is only 147.32%, which is not as good as a fraction of that in 2017. However, he was indeed the world's richest man in 2008 and a leader in the investment community. This shows how important stable investment is. The extension of the mining investment cycle indicates that our income has declined. In addition, it also shows that the entire market is becoming more and more stable. For the digital currency market, mining is the most stable investment method (equivalent to fixed investment in buying coins). Therefore, don't panic when the halving occurs. Choose high-quality and service-oriented products and feel free to mine.

Secondly, imaginary things can only solve the immediate problem. We still have to live, and the more money we can make, the better. Therefore, it is necessary for miners and coin speculators to use effective financial tools to reduce risks and expand profits. This requires everyone to study some financial knowledge and use leverage, futures, options and other methods to achieve profit growth. In general, the price of futures contracts is easy to manipulate, and the entry threshold of options is relatively high. The most approachable way is to use mortgage loans to buy coins with low leverage or pay electricity bills. We can do some calculations.

Assumption: 1BTC = 10000U, pledge rate = 60%, interest = annualized 12%, pledge time: 3 months (quarterly is more flexible), that is, if you get 6000U, you need to pay an additional 180U interest (3 months), that is, within 3 months, a 1.8% increase in the price of the currency can make up for your cost, so you see, in fact, the cost of borrowing is not as high as you think, as long as you judge that there will be a 1.8% increase in the next 3 months, then the money is equivalent to being used in vain. Of course, if you are a miner, it will be even better, you can cover your position as you mine, and you don’t have to worry about the problem of falling and bursting, and the same is true for currency holders. As long as you control the pledge rate, there will be no problem.

Wang Yang

There are about 70 days left until the halving. I personally think the best strategy recently is to mine normally and hoard coins if you have mining machines, and to hedge appropriately when the coin price is high. For those who don’t want to start mining, it is recommended to wait until the halving is over, the price of mining machines stabilizes, and the hydropower price stabilizes before starting.

In addition, after the halving in May this year, there is a high probability that the mining farms will be overloaded. If the coin price does not rise sharply, under the circumstance that the high-computing power machines for normal mining are limited, because the mining income is not enough to attract new funds to deploy high-computing power mining machines, the computing power of the entire network will drop by 30%-45%, and the s9 generation of machines will be basically eliminated and cannot be turned on. Therefore, there is a high possibility that the mining industry will be reshuffled this year, but the coin price will ultimately determine the future situation. My own strategy is to continue mining with the high-computing power machines. At present, even if it is halved, the income will not be affected too much. Then after the halving, if there is sufficient funds on hand, and the price of s9 is low enough, for example, more than 100 yuan, you can buy some of them cheaply and put them in the warehouse as a venture capital. Although the current market is not particularly good, I still say that we must be prepared for Bitcoin after 20,000 US dollars. Those who do not plan for the overall situation are not qualified to plan for a region, and those who do not plan for eternity are not qualified to plan for the moment.

Zhang Yuan

The last question is for media observers. Please ask a few questions, Shenzhen Chain Finance reporter.

Tiny

Many project parties use various incentive policies to encourage everyone to hold coins for a long time. Bitcoin also has a group of loyal believers who call on everyone to hold coins for a long time. Can several guests talk about the impact of users' long-term holding of coins on the industry ecology?

solemn

Because long-term holders have great confidence in the healthy development of the Bitcoin ecosystem in the future, they also used such user groups to promote digital currencies in the early days, expand Bitcoin awareness, and thus enhance Bitcoin liquidity and form a closed loop. Of course, as an old leeks, you may find that it is better to hoard some coins than to operate like a tiger. It should be said that the investment risk and difficulty of digital currency are still quite high. For ordinary people, this laziest strategy may not be the worst. At present, the liquidity of BTC in the market is actually quite good. It has not entered a situation where everyone holds coins and cannot sell them. After all, there is no inherent mechanism to lock positions. For marketing, it can only be said that it is actually quite difficult to hold coins...

Dai Pengcheng

In the field of mining, we are exposed to more and more customers who are full of confidence in the future development of BTC. Many miners have also changed from speculators to long-term investors, and long-term holding of coins has become a trend. The total amount of Bitcoin is limited, and the block reward has been halved every four years. Many miners also know that it is becoming more and more difficult to mine. Long-term holding of coins allows mining machine manufacturers to better understand the capital allocation of customers, and also enables us to provide more solutions for customers to purchase mining machines. Miners need to pay electricity bills and buy new machines, and customers holding coins need to make currency-related conversions. In the future, there will be more and more financial derivatives tools. It is recommended that you choose a safe, transparent and reliable digital asset financial platform like Matrixport to increase your asset returns. The entire industry ecosystem will also be richer and investment diversity will be more obvious.

Chen Zhenghe

Holding coins for a long time is a disguised form of locking up, which will cause a decrease in the circulation of BTC. From a macro perspective, it will definitely be beneficial to the rise in coin prices.

On the other hand, the halving is imminent, and the halving of products will also lead to a reduction in selling pressure. If existing BTC are still reluctant to sell when the amount of new output coins decreases, haha, anyway, I personally hope that more people can HODL with me and wait for BTC to take off.

Wang Yang

Only when more people hold Bitcoin will Bitcoin become deflated. Only when Bitcoin becomes deflated will Bitcoin increase in price. Only when Bitcoin increases in price will more people come in and hold more Bitcoin. This is a closed-loop positive cycle, so we must preach Bitcoin and let more people hold Bitcoin.

Free Q&A session

Netizens

Do we have a mobile app? Can it be used as a wallet?

Li Yang

Download the APP without going over the firewall (copy to the browser to open)

https://d3g83d8td87fx3.cloudfront.net/en Copy it to your browser and open it to download. It can be used as a wallet

Netizens

Which coins can be pledged?

Chen Zhenghe

These are the currencies that can be staked at present: BTC BCH LTC ETH

Today's AMA ends here. Thanks to Xiaoxiao and all the major supporting media, and also to the guests for their wonderful sharing and the enthusiastic interaction of the mining friends! See you at 8 o'clock tomorrow night in the sixth episode of "Mining Simulcast"!