A full review of the fourth episode of "Mining Coins News": Breaking boundaries and accelerating the integration of mining and coin circles

Welcome back, friends! The theme of the fourth episode of "Mining Coins News" is: Breaking boundaries and accelerating the integration of mining and coin industries. Our guests for this episode are Shi Rui, CMO of BitDeer, and Wang Dongwen, founder of Jinshan Mining.

Today's media observer is Fan Yuanyuan, a reporter from BoChain Finance (say hello). In the following AMA session, Yuanyuan will represent the supporting media of this event: Golden Finance, Lieyun Finance, Liandede, Star World, Deep Chain Finance, Babbitt, Mine Vision, Bitang International, Changqing Finance, Pika Finance, Bitao, Evangelism Finance, Bitcoin Home, Milin Finance, Mokr Headlines, Chain World, Chain Finance, FN.COM, Miyou Finance, Bipu, Qun TV, Shilian Finance, BoChain Finance, Niubiquan, Bibi NEWS, Ostrich Blockchain, Deep Cloud Finance, BITCOIN86, Gyro Finance, Gyro Q&A, Niu Shi Finance, Beibo, Nakamoto Finance, and Block Network to ask questions to the guests.

Zhang Yuan

First, please let the two guests introduce theirselves.

Shi Rui

Hello everyone, I am Shi Rui, CMO of BitDeer, and I joined the founding team of BitDeer in 2018. I am very happy to be a guest of Wabi.com today. Together with two other guests and media observers, I would like to share our perceptions and views with the users of Wabi.com from the perspective of mining practitioners. We also welcome everyone to interact with us.

Wang Dongwen

Hello everyone, I’m Wang Dongwen from Jinshan Mining. Today I’m very happy to be a guest on Wabi.com with BitDeer CMO Shi Rui and media observer Fan Yuanyuan. I’d like to share with you our experiences and views from the perspective of mining operators and cryptocurrency players. Everyone is welcome to interact with us.

Zhang Yuan

Welcome, both of you. Let's get started directly. As the product operation models of the mining and cryptocurrency circles are gradually becoming internet-based, does this mean that the two circles will break down barriers and further integrate?

Shi Rui

From the very beginning, the division between the mining circle and the currency circle was based on the operation mode and coin production model of Bitcoin and other digital currencies. Most of the miners were geeks from the IT industry. With the emergence of professional mining equipment and the gradual increase in computing power, the derivative demand for providing mining services and holding coins has accelerated the Internetization of operations.

Users in the cryptocurrency circle have different needs for holding coins and different risk preferences, and are more focused on the appreciation of encrypted digital currencies and the issuance of digital currencies. As the market value of the entire digital currency gradually increases, the number of speculative players is also increasing, and the trading demand for digital currencies and derivatives has also accelerated the Internet-based operation model of various project parties.

It can be found that no matter in the currency circle or the mining circle, the ultimate goal is to bring better products and services to users at a lower operating cost. This is the convergence of the operating model, and the requirements for operation are gradually increasing. The BitDeer team has more than ten years of rich experience in Internet product operation, bringing the ultimate product spirit of the Internet to the field of cryptocurrency. Improving industry efficiency, understanding user pain points, and polishing product experience have always been our greatest concern and best. At the same time, these concerns are also the same for companies in the currency circle, such as the exchange industry.

The mining circle and the currency circle are two important links in the industrial chain since the development of the blockchain industry. For the currency circle, the focus is still on asset prices and asset preservation and appreciation. It is an exploration and extension of the direction of financial technology, which will promote the mining circle to deepen its high-tech development, such as the research and development of mining machine chips, the innovation of mining algorithms, etc., which will also be reflected in the currency price or bring diversity to the asset market. Mining and currency complement each other, and the mature Internet product operation model adds new impetus to both, promoting the better development of the blockchain industry.

Wang Dongwen

The "three circles and one institute" are inseparable, namely the currency circle, the blockchain circle, the mining circle, and the exchange. The mobile Internet has broken the boundaries, making it easier for more people to participate. Internetization helps the two circles to develop and integrate better. Increasing the integration of resources between the two sectors is the inevitable and historical mission of the development of digital currency. We are happy to see miners participate in the trading activities of the currency circle, and we also welcome the big guys in the currency circle to participate in the investment and construction of the mining circle. Together, we will push the entire ecological industrial chain of digital currency to a larger and better development track, and we should break the so-called barriers that hinder development and further integrate.

Zhang Yuan

Thank you for your wonderful sharing. Bitcoin has been rising rapidly since last year, and the computing power has set new highs. I would like to ask the two guests, has Bitcoin already overdrawn the halving expectations?

Shi Rui

Compared with the previous two times, people have become more sensitive to the big bull market that may be brought about by the halving, and the halving expectations have also been launched in advance. In addition, the impact of the international situation and the sudden occurrence of black swans has also accelerated the unexpected rise of Bitcoin.

At the same time, we also see that computing power continues to rise and set new records, which shows that computing power is continuously being invested. It can be said that investors are still bullish on the future of the industry. The confidence of participants in the price of Bitcoin is supportive, which is a positive performance for the sustainable development of the industry.

In addition, miners are currently more willing to hoard coins than to trade them, or they may wait for more attractive prices after the halving, so this expectation will continue. The market will only be late, but it will not be absent. After the halving, the supply will decrease and the demand will remain unchanged. This scarcity is still beneficial to the market in the long run.

Wang Dongwen

From the perspective of the mining industry, the recovery of the price of coins and the record high of computing power last year show that everyone is optimistic about this round of halving. In particular, the recovery of the price of coins has a more direct impact on the nerves of the general investment community. It can be seen that the data such as Bitcoin wallet addresses also increased last year. We are more concerned about whether there are new investors entering our circle. Because the currency circle is still a child of only ten years old, the future development is very impressive. The halving has not really come yet, and the previous one is just a warm-up. I am more optimistic about the near future.

Zhang Yuan

It seems that both of you are optimistic about the medium and long-term market conditions. Next, please tell us what impact this round of halving will have on the mining and currency circles?

Shi Rui

Halving means that the block reward of the original coin is halved. Many people would wonder if the corresponding miner's income will also be halved immediately. In theory, this calculation is definitely correct. However, if the coin price increases to a certain extent in the later period and the computing power and difficulty of the entire network are gradually adjusted, the final income may not be halved, especially for high-computing machines above S17.

Some old machines will inevitably be eliminated, but the decline in computing power will offset the impact of halving to a certain extent. 40% of the S9 models will most likely be eliminated, which will also make room for new models of mining machines. Since new models with high computing power will basically not be affected too much, the market computing power and coin prices will show dynamic adjustments after halving, and miners' mining income will not necessarily be halved.

The sudden global "black swan" events and the iteration of new machines have brought about major adjustments to the management and operation capabilities of mining farms. Whether the mining farm operation and maintenance can establish a complete emergency response system for sudden incidents, and the new machines have high requirements for temperature and humidity after they are put into use, then for miners with small capital, the cost of investing in new mining machines is high and the risk is greater. Overall, it is better to buy computing power.

Computing power package products can help miners reduce investment costs to hedge risks to a certain extent, and they can also continue to obtain stable profits after the halving. I believe that before the halving, many people will still choose to enter the cloud mining market.

Wang Dongwen

For the mining industry, whether there will be different degrees of mining difficulties after the halving is a topic that everyone has been paying attention to. I personally think that this is a stage of development and a manifestation of competitiveness. Mining farms with low computing power and high electricity costs will definitely be eliminated. Capital is always chasing better commercial investment, and the mining industry is no exception. We hope to welcome more investors and attract more attention and recognition from capital with the sharp rise in the price of coins before and after the halving.

Zhang Yuan

What do the two guests think about the statement that 2020 may see the worst mining disaster in history?

Shi Rui

Will the price of the coin rise sharply after the halving? This is a topic that everyone is most concerned about. After the halving, the output of the original coin has decreased, but the price of the coin has not risen to the expected level, so some people may think that this is a mining accident.

If the price of the currency does not rise or fall below the current mining cost price, mining machines will indeed shut down, but from the perspective of miners' return on investment, mining accidents do not exist. These eliminated machines were purchased in 2018-2019, and they basically recovered their investment in 2019. There were a lot of profits when they were eliminated in 2020.

This halving is also a special time point faced by the mining circle. For mining users holding heavy assets, if they do not take some hedging actions in advance, the risk is indeed relatively large; but for cloud mining users, the cycle is not long, the investment cost is low, the assets are light, and the risk resistance will be much stronger. On this basis, they can also use some financial products for hedging.

Overall, although some small companies have been eliminated, the entire mining industry is still thriving, and more professional and comprehensive mining companies will quickly stand out with their advantages in technology, capital, resources, and services. Companies in the same industry are making efforts, and BitDeer will also work hard to provide users with better services and richer products this year.

Wang Dongwen

This is a process of survival of the fittest. Miners should prepare in advance for the rainbow after the heavy rain. Everyone says that this year is the most difficult year in the past ten years, but it is also the best year in the next ten years. We should actively respond to minimize the risks. We should respect the origin of capital and earn profits below the risks.

This halving took place in May, which coincided with the flood season, and the electricity cost dropped by about 35%. If the coin price did not rise, miners who were not prepared to replace high-computing power machines would indeed face shutdown. As a result, high-computing power machines would continue to mine as usual, and external funds would slowly enter the market. If the coin price rose slightly, for example, by 50%, to around US$12,500 (because the previous two halvings took 1-2 months before and after, and increased by 50% and 80% in 2012 and 2016 respectively), and considering the shipment volume of mining machine manufacturers and the matching of power resources, we estimate that the S9 series can also be turned on, and there will be no mining accidents.

Zhang Yuan

Recently, there have been voices saying that the Bitcoin mining industry is shifting from China to North America. What do you two guests think about this?

Shi Rui

In fact, this phenomenon is not only increasing in North America, but also in Central Asia, Europe and other regions. It is no longer limited to development in China. This also shows that the global market's attention is increasing and acceptance is also growing.

The participation of more regions in the incremental mining market also enhances the decentralized nature of Bitcoin mining, which is beneficial to maintaining the secure self-operation of the Bitcoin network.

BitDeer has been actively making global deployments. Our professional mining farms are now spread across all continents of the world, including Asia, America, and Europe. In the future, we will continue to spare no effort to explore new markets.

But then again, in the mining industry, China still has obvious comparative cost advantages, including cheaper labor costs and cheaper electricity costs. From this point of view, the probability of large-scale industrial transfer is still relatively small.

Wang Dongwen

This depends on three points: policies, electricity prices, and the integrity and health of the mining ecosystem (mining machine manufacturing, logistics, after-sales maintenance, operation and maintenance, etc.). Just like several of my friends went to the Middle East to build mines, they had mixed results. Some had stable electricity, some had no electricity, and even the machines were seized by customs. If the local government supports or at least does not oppose it, the electricity price is cheap, and the local mining ecosystem is complete and healthy, we think we should go abroad, including some mining machine manufacturers building mines in North America and Canada, using electricity legally and stably, why not? This will be more conducive to the establishment of a decentralized Bitcoin network. For the digital currency mining industry, I personally still hope that our country can introduce more corresponding policies to provide a better development environment for the mining circle, establish game rules, and use Bitcoin mining as the first landing application of blockchain, and call on everyone to learn and study.

The second half was hosted by media observer and BoChain financial reporter Fan Yuanyuan.

Zhang Yuan

Hello, guests! I am very happy to ask questions on behalf of all supporting media. There are less than 3 months before the halving. What strategic plans do you have to deal with this halving?

Shi Rui

The halving is not only a test for investors, but also a test for the platform’s ability to continue providing services. We have been preparing for this very early on.

In the past few months, Xiaolu has upgraded both its hardware and software. We continue to introduce the latest mainstream models with high risk resistance in the market, provide a service foundation for the stable operation of user packages, continuously improve user services, and provide users with more lucrative opportunities for income; in addition, we have also made great efforts in the professional management of the platform, refined operations and mine operations.

In addition, Xiaolu has also thoughtfully prepared a "March Return to Work Gift Package" worth over one million US dollars for users, including computing power coupons, electricity coupons and vouchers. Each user can receive gifts worth up to US$6,000.

Speaking of mining machine models, we also know that on the eve of halving, new mining machines with high computing power are extremely attractive to users. Here I would like to give a preview in advance that Bitmain has released a new model S19, which is the first to usher in the 100T era. By then, Xiaolu will also purchase this batch of the most advanced models on the market as soon as possible and provide mining services of this model to users. Stay tuned.

Wang Dongwen

Our plan is relatively simple, because most of them are Fengshui mines. We have made some preparations around the Spring Festival, replaced some mining machines with low power consumption ratios, and hedged to lock in future profits and maintain sufficient cash flow. At the same time, we are also preparing new mines and cloud computing products to serve more miners. We are also actively cooperating with mining machine manufacturers to introduce a batch of high-computing machines to compete for future computing power.

Zhang Yuan

May I ask whether the two guests are considering developing new currencies in their current products?

Shi Rui

Users familiar with us know that the currencies currently supported by Xiaolu are all popular mainstream currencies in the market, such as BTC, BCH, LTC, ETH, ETC, ZEC, DASH, and DCR. However, considering the needs of users and the different investment risk preferences, we have undergone strict professional audits. We will also select good opportunity income currency packages from more mainstream and innovative currencies from time to time and provide them to users.

For example, on March 1, we launched a new mining package for the latest currency - the CKB coin mining package, which used the Antminer K5 newly released on March 2. The rush to buy was extremely hot, and the stock was restocked three times in 12 hours, and all of them have been sold out.

Wang Dongwen

It is not within our current development scope, but we are determined to provide customers with supporting services for mainstream digital currency mining.

Mainly because the country strictly prohibits ICO

Zhang Yuan

The halving is coming soon. Do the two guests have any suggestions for their respective users?

Shi Rui

As a miner, there are some risks to be aware of: first, the choice of machine, or choose those new models of machines with strong risk resistance; second, the choice of mining farm, pay attention to its professionalism and safety; third, the way to enter the market, there are many options on the market, cloud mining has the lowest threshold, which is obviously the most ideal for users who did not get on board in the early stage but still want to enter the market, but also pay attention to risk control. Under the current situation, reducing risks is obviously more important than buying at a high position to earn spreads. Keep a good attitude and welcome the halving.

Wang Dongwen

Continue to replace high-computing mining equipment, do a good job of hedging when the market is relatively high, and lock in future profits. For miners, the most important thing is mentality. To borrow a sentence from the former prime minister: Confidence is more important than gold.

The U.S. stock market has plummeted in recent days, creating the worst week since the 2008 financial crisis. The U.S.-Iran war, the wildfires in Australia, the new coronavirus, the issuance of fiat currency, and the high probability that the Federal Reserve will cut interest rates this year are good news for the cryptocurrency community. The best way to fight inflation is to hold Bitcoin, and a better way than holding Bitcoin is to mine. Finally, on behalf of the founding team of Jinshan Mining, I wish everyone a smooth year, a good harvest in an uneasy world, hold on to the Bitcoin in your hands, and look forward to a wonderful 2021.

Bochain Finance Fan Yuanyuan

There is a lot of competition in the mining industry, in addition to mining machines and currencies. I would like to ask the two of you if you have considered developing new currency products.

Wang Dongwen

It is not within the scope of development at present. We are determined to provide customers with supporting services for mainstream digital currency mining. The main reason is that the country strictly prohibits ICO, and the risks of other digital currencies are too high.

Shi Rui

Users familiar with us know that the currencies currently supported by Xiaolu are all popular mainstream currencies in the market, such as BTC, BCH, LTC, ETH, ETC, ZEC, DASH, and DCR. However, considering user needs and different investment risk preferences, we will screen out good opportunity income currency packages from more mainstream and innovative currencies from time to time after strict professional audits and provide them to users. For example, on March 1, we launched the latest currency mining package - CKB coin mining package, which uses the newly released Antminer K5 on March 2. The rush to buy was extremely hot, and it was restocked three times in 12 hours, and all were sold out.

Bochain Finance Fan Yuanyuan

We just talked about the company-level layout. Next, I would like to ask if you two can give some suggestions to users under the halving market?

Shi Rui

OK, I think there are the following risks to be aware of: First, the choice of machines, you should choose new models of machines with strong risk resistance for mining; second, the choice of mining farms, you should pay attention to the professionalism and safety of mining farms; third, there are many options for entry, and the threshold for cloud computing mining is relatively the lowest. It is obviously the most ideal for users who did not get on board in the early stage but still want to enter the market, but they should also pay attention to risk control. Under the current situation, reducing risks is obviously much more important than buying high to earn spreads. Keep a good attitude and welcome halving. Under the current situation, reducing risks is obviously much more important than buying high to earn spreads. Keep a good attitude and welcome halving.

Wang Dongwen

Well, I have a few simple and easy-to-operate suggestions for everyone: continue to replace high-computing mining equipment, do a good job of hedging at a relatively high market position, and lock in future profits. For miners, the most important thing is mentality. To borrow a sentence from the former prime minister: Confidence is more important than gold. The U.S. stock market has plummeted in recent days, creating the worst week since the 2008 financial crisis. The U.S.-Iran war, the Australian wildfires, the new coronavirus, and the issuance of legal currency, the Federal Reserve is likely to cut interest rates this year. For the currency circle, this is a good event. The best way to fight inflation is to hold Bitcoin, and a better way than holding Bitcoin is to mine. Finally, on behalf of the founding team of Jinshan Mining, I wish everyone a smooth year, get a good harvest in an uneasy world, hold the Bitcoin in your hands, and look forward to a beautiful 2021.

Free Q&A session

Netizens

@金山矿王栋文王院长Hello, I have the opportunity to get a few CKB mining machines with stronger computing power than Ant K5, but they can only be guaranteed to arrive around mid-March, about 10 days earlier than K5, but the price of the mining machine is more than 3 times that of Ant K5. Can you give me some advice on whether to buy it in time? But I am afraid that the computing power will increase sharply and the income will be very poor.

Wang Dongwen

Our company is still conservative. I won't buy it.

Netizens

When will Xiaolu make an app?

Shi Rui

The APP will be launched soon, probably next month.

Today’s AMA ends here. Thanks to Yuanyuan and all the supporting media, and also to the guests for sharing their wonderful experiences! See you tomorrow night at 8pm on the Matrixport special episode of “Mining Coins Simulcast”!