[Roundtable transcript] The evolution of GPU, FPGA and ASIC mining from the dominance of HNS and other mining coins

On March 3, an online roundtable was held last night, co-hosted by Golden Finance, Block Ark and Aladdin Mining Research Institute, and strategically supported by MinerFamily, MultMiner, Blackminer and Hebe Wallet. The theme was "Looking at the evolution of GPU, FPGA and ASIC mining from the dominance of CKB HNS and other mining coins", and the host LVY talked with Gate Jiuer, BTC.com CEO Zhuangzhong, F2Pool COO Dayu, Hotbit Global Chief Strategy Officer Alex Zhou, and BlockArk CEO Su Ye. The following is the transcript.

20:03

Host Ivy:

2020 is destined to be an extraordinary year of the Rat. The concept of production cuts has just cooled down, and the mining machine technology innovation boom has entered again. Following the well-known mining coins such as CKB, TRB, and KDA, which have led FPGA mining machine revenues to the top, Handshake (HNS), founded by the founder of the Lightning Network, has once again brought FPGA into the mainstream vision. Its revenue is equal to that of Ant S19, which has made the originally gradually cold market begin to heat up again. FPGA mining machines, which were once famous in the mining circle in 2013, have recently become a hot search in the circle. Window mining has attracted much attention to projects such as HNS and CKB. Today, let us talk about the potential relationship between the dominance of mining coins such as CKB and HNS and the evolution of GPU, FPGA and AISC mining.

20:06

Host Ivy: Today, the HNS Chinese Miner Community is honored to invite five industry leaders who will take us to an in-depth understanding of the mainstream mining ecosystem headed by HNS.

20:07

Host Ivy: The five big names are (in no particular order): btc.com CEO Zhuang Zhong, F2Pool COO Dayu, Gate.io CPO Jiuer, Hotbit Global Chief Strategy Officer Alex Zhou, BlockArk CEO Su Ye, welcome everyone.

20:07

Host Ivy: I think everyone is very familiar with them, so I won't introduce them one by one. Please ask the guests who have been called to say hello to everyone.

20:08

Moderator Ivy: Let’s get straight to the point. The first question is: Dr. Pumpkin Zhang started the golden 1.0 era of Bitcoin FPGA mining machines in 2011. Why are FPGA mining machines becoming popular again recently and are said to have ushered in the 2.0 era?

20:18

Zhuangzhong: FPGA mining machines appeared in 2011 and were found to be more efficient than GPUs. Early FPGA mining machines were also unable to support algorithms like Ethereum. As a result, GPUs became the mainstream of the entire market during this period.

20:19

Zhuangzhong: But in fact, with the advancement of FPGA, it can support more and more new algorithms. Its support should be the same as that of GPU. But its efficiency is actually higher than that of GPU.

20:22

Zhuangzhong: So there are two reasons why FPGA mining machines are popular again. The first is the technological progress of FPGA itself and related software around FPGA, which makes the design of mining machines mature. The other is that there are many mining coins on the market that provide FPGA miners with some mining space.

20:24

Zhuangzhong: So I think it is definitely the active mining coin market that makes FPGA have advantages over GPU in many aspects. So this reason has led to a chance for FPGA, which once disappeared, to become active again.

20:25

Host Ivy: Now, please let Dayu answer this question.

20:26

Big Fish, COO of Fishpond:

Since ASIC replaced FPGA to run the heavy work of Bitcoin SHA-256 hash algorithm around 2013, FPGA mining machines have basically withdrawn from the historical stage of Bitcoin mining. However, the impact of FPGA mining machines on other PoW mining coins cannot be ignored. FPGA mining machines began to enter the computing power market before the emergence of GPU ASIC, especially in the recent popular mining coins such as CKB, KDA, TRB and HNS, which once dominated the computing power market.

20:26

Dayu, COO of F2Pool: The advantage of FPGA is that it is programmable and different programs can be written as needed. It is highly flexible and can support multiple algorithms and switch between currencies for mining. In addition, from the perspective of miners, especially for individual miners who do not have mining resources, low machine noise, low electricity costs, and worry-free mining are key factors. FPGA basically meets the above requirements, with low power consumption and a small proportion of electricity costs.

20:27

BlockArk CEO Su Ye: Both mining bosses talked about FPGA characteristics, I will mainly talk about the currency perspective

20:29

BlockArk CEO Su Ye: Before 2020, FPGA was more of a niche market, existing in the gap between graphics cards and ASICs. Most of the time, it could only mine small coins with a market value of less than 10 million US dollars.

20:30

BlockArk CEO Su Ye: But since last year, FPGA market shipments have begun to increase significantly. In addition to the long-standing short supply of the white horse Blackminer, new manufacturers such as Multminer have also emerged this year. I think the outbreak point of 2.0 lies in the continued emergence of new leading mining coin projects. At the end of last year, the star project CKB mainnet was launched, and the initial circulating market value reached 340 million US dollars, and the daily mining output value was about 100,000 US dollars.

20:30

BlockArk CEO Su Ye: At that time, Blackminer immediately ranked first in mining machine revenue, with revenue twice as high as that of graphics card mining machines in the same period.

With Binance leading the investment in the oracle project Tellor at the end of last year, the public chain Kadena of the former JPMorgan Chase team was launched one after another. Due to its characteristics of crushing the efficiency of graphics card mining machines in specific currencies, the highest daily income of the first mine can even be around 300 RMB, and the static payback period is even less than 3 months. HNS, founded by the founder of the Lightning Network, has once again surpassed the short-term income of FPGA over the King of Machines S19.

20:31

Moderator Ivy: Thank you to the three guests for their wonderful speeches. The second question that everyone has been paying more attention to recently is: Why did the HNS project gain support from large mining pools and major exchanges from the very beginning? What are the main reasons for its good market performance?

20:32

Moderator Ivy: For this question, we would like to invite Dayu, COO of F2Pool, who first brought HNS into our vision, and Alex Zhou, Chief Strategy Officer of Hotbit Global, to share with us.

20:32

F2Pool COO DaYu: F2Pool added the "Innovation Zone" section in early 2018, launching new currency mining pools with new ideas, new algorithms, new functions, new applications, and strong sustainability. F2Pool uses these key factors to judge the quality of mining coins. First, I'll take a screenshot of the TOP 100 "PoW Rankings" for everyone to see:

20:34

Dayu, COO of F2Pool: In the screenshot we can see several key data displayed, which are also the indicators we value, such as: PoW 24-hour output, circulating market value, trading volume, algorithm, remaining mining quantity, etc. In addition, the project's founding team, ecological development, platforms that have supported transactions, communities, etc. are also the directions we value. Of course, miners value mining income the most, and they can quickly recoup their investment through mining. At present, F2Pool supports mining for all currencies that rank high in the "PoW Ranking". The data presented on this page is very complete, and many media reports are referring to the F2Pool "PoW Ranking". You can also pay attention to it. https://www.f2pool.com/coins

20:35

F2Pool COO Dayu: Handshake is an outstanding project based on the multiple indicators we value. The project was initiated by top blockchain developers such as Joseph Poon, the founder of Bitcoin Lightning Network, and has received support from well-known institutional investors including Andreessen Horowitz, Sequoia Capital and SV Angel Investment. Handshake currently uses the Blake2B + SHA3 algorithm, which supports GPUs while also being friendly to FPGAs and AISC. In terms of mining revenue, HNS ranks among the top in both the graphics card (N card) and FPGA markets. Therefore, after we started mining in the early stages of the project, we launched it online after evaluation, striving to help miners grasp the early mining dividends.

20:44

Dayu, COO of F2Pool: The screenshot is the mining income of F2Pool App HNS today. You can pay attention to the dynamic data provided by F2Pool products. It will be helpful for friends who participate in mining and it is very convenient to compare mining income.

20:44

F2Pool COO Dayu: In addition to the quality of the project itself mentioned above, the reasonable financing scale and innovative token structure are two important reasons for the good market performance of HNS. The project will initially airdrop 68% of the tokens for free to tens of thousands of developers on development platforms such as Github (also invested by Sequoia Capital and A16Z), greatly increasing its influence in the global developer community.

20:45

Alex, Chief Strategy Officer of HotBit Global: Thank you, host. Hello, I am Alex, Chief Strategy Officer of HotBit Global. As an international exchange, HotBit.io has been deeply involved in the global international market, and has a relatively high market share in Russia, Southeast Asia and other countries, and has always been ranked in the top 10 in the world of CMC. We have also been vigorously entering the Chinese market recently, hoping to provide Chinese users with a better trading experience and more high-quality popular currency options, just like HNS in today's topic, we also discovered it very quickly and passed the internal review and launched it online.

20:46

Alex, Chief Strategy Officer of HotBit Global: The HNS project is a decentralized DNS, positioned as the infrastructure of blockchain, and is one of the projects with the highest growth potential in Hotbit's project quality assessment. The initial success premise of such projects is still relatively traditional logic, with top technical teams and top capital endorsements. If it is put into the bull market to raise funds, it is likely to be a big hit.

20:46

Alex, Chief Strategy Officer of HotBit Global: Although the market is generally flat, its good project foundation can still attract many investors and miners to join. Hotbit's coin listing inclusiveness is very strong, and such high-potential projects will definitely be the top priority support, just like Beam, Grin, CKB, KDA and other projects. We are also the first to launch HNS globally, and we are very pleased to have won the market's recognition again.

20:48

Moderator Ivy: As a senior expert in the industry, you can have such a deep insight into each project. Let's move on to the next question. What are the upstream and downstream relationships of graphics cards, FPGAs, and AISC in the mining industry chain and their respective advantages and disadvantages? Which sector is expected to grow faster in the future? How will the Bitcoin halving and Ethereum's conversion to POS affect the mining pool's demand for HNS, CKB, RVN, TRB, and GRIN products or business needs? Please ask btc.com CEO Zhuang Zhong and F2Pool COO Dayu to share their views again.

21:03

Zhuangzhong: As for graphics cards, there are basically only two companies, and most miners use consumer-grade graphics cards. A few manufacturers may have produced some so-called mining cards specifically for the industry. In general, it is still based on a complete machine assembly or we can basically think that GPU mining machines are all computers.

21:05

Zhuangzhong: As for FPGA mining machines, it’s a little different. Although its source and chips are highly concentrated in a few manufacturers, mining machines still require our mining machine manufacturers to obtain the FPGA chips from various channels, and still need to make some designs around this chip. In fact, this still has a certain threshold.

21:09

Zhuangzhong: At present, there are actually very few FPGA mining chip manufacturers who personally make mining machines, at least the quantity should not be large. Of course, for these two categories, FPGA mining machines or GPU mining machines, they actually need to be in their own space. Because once this currency has a large profit margin, it will attract some ASIC mining machines. For example, a CKB mining machine will be released soon. That means miners must switch to other currencies.

21:11

Zhuangzhong: It should be said that in recent years, the efficiency and algorithm of FPGA have been able to keep pace with GPU, and under the same algorithm, the efficiency is definitely higher. The corresponding management software of these mining machines is also becoming more and more perfect. It may be felt that for ordinary miners, the difference may lie in the difficulty of getting started, the price, and that it may be necessary to understand some basic knowledge of FPGA mining machines before using the mining machine.

21:13

Zhuangzhong: The halving of Bitcoin will definitely have a huge impact on the revenue of mining pools. So this will also make us think more about how to support more currencies needed by miners in this industry. At the same time, we are also actively thinking about how to cooperate with the entire industry upstream and downstream to better expand our income channel. In particular, can we jointly develop some new products and business models with some of our partners?

21:16

Zhuangzhong: If Ethereum switches to POS, will it definitely lead to a large amount of GPU computing power being left with nowhere to go? This is definitely an opportunity that everyone has been paying attention to. I believe that this computing power will eventually find some place to mine. Therefore, I also estimate that there should be a lot of such new mining coins, because they should target this market, that is, they may all want to be the receiver of such Ethereum computing power.

21:16

Host Ivy: Let’s welcome Da Yu

21:18

F2Pool COO DaYu: Judging from the evolution of mining methods for recent popular mining coins such as CKB and HNS, for AISC-friendly graphics card mining coins, graphics card computing power is the main factor during the creation mining, and then FPGA mining algorithms are developed and deployed to dominate, and finally AISC becomes the mainstream after successful tape-out and shipment. However, for some mining coins such as RVN that frequently resist AISC by changing algorithms, different mining methods may dominate at different time points.

21:18

F2Pool COO DaYu: The main characteristics of FPGA compared to GPU and AISC are: First, its computing power is stronger than GPU. Second, mining machine manufacturers can use software upgrades to allow mining machines to mine PoW currencies of different algorithms. Third, the power consumption is relatively low. Fourth, for some algorithms with small memory requirements and pipeline processing, FPGA mining machines have obvious advantages. FPGA has grown rapidly recently, but its long-term sustainability still depends on changes in the acceptance and recognition of the entire market, including mainstream mining coin project parties.

21:20

F2Pool COO DaYu: After the Bitcoin halving, the payback period of mining may be significantly extended, and the graphics card computing power will face the problem of taking over during the ETH to PoS process. Judging from the recent market performance, the popularity of CKB mining machines, cloud computing power and FPGA mining machines is particularly high. The mining machine and cloud computing power product business of high-quality innovative mining coins may usher in a good development space. However, how to balance profitability, stability, risk control and market capacity has put forward new challenges for product design and business development.

21:20

Dayu, COO of F2Pool: In addition to investing in ASIC mining machines and graphics card mining machines, I have also invested in products such as FPGA and new coin mining machines, such as the CKB C1 mining machine that is currently on pre-sale. The market will gradually increase in volume, so the benefits of getting the machine early will be very considerable. 2020 is a very important year for the industry. I hope everyone can seize the opportunity this year and get a better return on investment while controlling risks.

21:22

Moderator Ivy: It seems that there are still many opportunities to be laid out this year. Here is another question that everyone is concerned about: Will exchanges pay more attention to mining pools and cloud computing businesses other than mining coin transactions? What is the difference in the screening of mining coin and non-mining coin projects? Gate.io CPO Jiuer and Hotbit Alex are invited to share their views.

21:24

Gate.io Exchange CPO Jiuer: Hello everyone, I am Jiuer from Gate.io Exchange. Currently, HNS can be traded on Gate. The URL we can open is: gateio.life. There is also an activity for his VIP, which is my VIP+1. You can also contact us to apply for a lower transaction fee discount.

21:25

Gate.io Exchange CPO Jiuer: Regarding this question, will the exchange pay more attention to mining pools and cloud computing services other than mining coin trading? The mining circle is a large market. In addition to mining coin trading, we will definitely pay attention to other businesses, such as our legal currency financial management, where many of our user groups are from the mining circle. However, we are not involved in mining pools and cloud computing services for the time being. At present, we still want to focus more on the exchange's own products and corresponding financial derivatives, such as leveraged financial management, and others.

21:25

Gate.io Exchange CPO Jiuer: Regarding the question "What is the difference between the screening of mining coin and non-mining coin projects?" We have an independent project review team that will score and evaluate projects based on more than 100 indicators. The standards for some indicators of mining coins and non-mining coins are different, but in the end, we will still comprehensively score and use data to avoid interference from human factors. After the review is passed, the first subscription or voting for online trading will be carried out on the official website. I am also very happy that I can trade HNS on Gate!

21:28

Host Ivy: Please welcome Alex, Chief Strategy Officer of HotBit Global

21:29

Alex, Chief Strategy Officer of HotBit Global: Let’s talk about cloud computing power first. Hotbit has already tried to tokenize cloud computing power. Our first phase of cloud computing power products has been sold out and is traded in the secondary market. The code is MNTK2201. Its feature is that BTC income is automatically credited to the account every day, and orders can be placed in the secondary market at any time. Judging from the market response, we think the popularity is average, and we still need to reduce the cost of understanding the product.

21:30

Alex, Chief Strategy Officer of HotBit Global: We found that miners rarely buy coins in pursuit of stable income, while users who buy coins rarely mine in pursuit of high returns, so this integration requires us to continue to try various balanced products. In cooperation with mining pools, we often jointly serve customers. For example, if miners have problems withdrawing money from mining pools to exchanges, sometimes we jointly solve them; sometimes the chain of emerging mining coins is unstable, we will also conduct technical discussions with mining pools.

21:30

Alex, Chief Strategy Officer of HotBit Global: Since Hotbit is currently one of the exchanges with the most mining coins, we interact with the mining pools very frequently in these aspects, and we have a good understanding and trust with each other. Hotbit respects the actual needs of the market in the principle of selecting mining coins and non-mining coins, and is very supportive of both technological leadership and application implementation. Mining coins have a special advantage, which is that they can get support from both currency circle users and miners. With the expectation that huge graphics card computing power will be idle after ETH switches to POS in the future, we are optimistic about the overall market of mining coins.

21:33

Netizen: How long can HNS FPGA mining revenue dominate the F2Pool list? Can the mainstream FPGA mining machines in the market, as well as CKB mining machines such as C1 and Antminer K5, be expected to pay back within a year?  

21:34

Yuchi COO DaYu: Before FPGA computing power began to enter HNS, HNS graphics card mining had already had relatively good returns. In recent days, MultMiner FPGA and S19 have taken turns to top the Yuchi mining revenue list. When CKB first started mining, there was a similar dominance. The duration of the market's excess returns depends on the performance of the secondary market, the speed of new FPGA machines coming to market, and the potential speed of ASIC research and development.

21:34

Dayu, COO of F2Pool: I personally think that if you can get the mainstream FPGA and CKB mining machines directly from the manufacturer at a relatively early stage, the payback period will be more advantageous. Of course, if the price of the currency drops or the computing power of the entire network increases beyond expectations, the payback period will be slower, and vice versa.

21:34

Netizen: The pre-sale of Antminer K5 and BitDeer Cloud Computing Power is very popular. Will BTC.com mining pool have any new plans to support small currencies in POW in the near future?

21:35

Zhuangzhong: We already support Grin/Beam/CKB, and the basic choices are all recent new currencies. We will also support TRB soon. Support for other currencies will depend on the market and demand.

21:36

Host Ivy: Can CKB mining machines such as C1, Antminer K5, etc. be expected to pay back within one year?

21:39

Todd, founder of C1 Miner: There is an algorithm. The cost of the first batch of users in mid-April is 10,000 RMB/t, and the price of the currency is about 5 cents. Assuming that the return on investment is 360 days, then C1 needs to mine 28 yuan of net profit every day. Our power consumption is 900 watts/t. According to the electricity fee of 4 cents, the daily electricity fee is 8.7 yuan. Therefore, as long as the daily income is 36.7 yuan, it will be fine.

21:39

Todd, founder of C1 Miner: The reverse calculation is that the total network computing power cannot exceed 15 P. The computing power should be around 7000-9000t in mid-April. So early users will have a bonus period. The subsequent development requires each friendly company to gently control the computing power. We have no plan to increase the computing power after the current 4000t.