China's blockchain industry under the shadow of the epidemic: meetings postponed, mining machine sales suspended

Author: Ratchet Pizza

Under the shadow of the new coronavirus, the 2020 Spring Festival is not peaceful.

On the first A-share trading day after the holiday, the Shanghai Composite Index recorded its largest single-day drop since 1997, with more than 3,000 stocks hitting the daily limit.

Gold and Bitcoin have become the few rising targets in the global market.

Affected by the epidemic, a number of blockchain companies began to work remotely. But many people found that they had nothing to do.

There are no more spectators at domestic summits. Many countries have banned Chinese citizens from entering the country, which has also made overseas conferences impossible.

Bitcoin miners in the deep mountains and forests may be the group least affected by the epidemic. However, the complete suspension of mining machine after-sales and logistics has also made them anxious.

01Coin price rises

On January 26, the second day of the Chinese New Year, Bitcoin rose.

From January 26 to 30, in five days, the price of Bitcoin rose from US$8,300 to US$9,400, an increase of 13%.

Bitcoin recent trends

Meanwhile, the stock market was falling.

On January 23, the Shanghai Composite Index fell below 3,000 points, with a single-day drop of 2.75%. Except for the pharmaceutical sector, almost all industry sectors were falling.

On February 3, the A-share market reopened, and the Shanghai Composite Index plunged 8.7% during the session, setting a historical record since 1997. By the close of trading, the Shanghai Composite Index plunged 229 points to close at 2,716 points, with more than 3,000 stocks hitting the daily limit.

Hong Kong stocks were not immune. In the first three trading days after the Spring Festival, the Hang Seng Index fell continuously, with a cumulative decline of 5.86%.

"In the short term, the impact of the epidemic on China's economy and even the world economy is very serious," said Liang Dong, director of the Zhongguancun Internet of Things Blockchain Laboratory.

In fact, not only the Chinese market, but also Apple's stock price in the US is falling. Some analysts pointed out that the pneumonia epidemic in China will impact Apple's iPhone production line. In this epidemic, almost no company can remain immune.

Wang Hanfeng, chief strategy analyst at CICC, believes that at present, the number of confirmed cases of the epidemic is still rising, and the market is still in a state of concern. If we refer to the trend of the A-share market during the SARS epidemic in 2003, the market index may still have room for a 4% to 5% correction.

In that case, the money is likely to go elsewhere.

"Today (February 3), the A-share market opened with a sharp drop, but Bitcoin rose by $200 in the first five minutes of the opening of the A-share market, from $9,400 to $9,600," said investor Wang Xin.

He said that USDT, which has always had a negative premium, has also seen a positive premium of up to 1% recently.

02Industry Crisis

Despite the rise in currency prices, the prospects for the currency and blockchain industries may not be optimistic in the face of the epidemic.

The cryptocurrency community loves to hold conferences. However, in the context of the pandemic, almost all conferences have been postponed or even cancelled.

According to an announcement released on Binance's official website on January 8, Binance will hold "Binance Blockchain Week" related activities in Vietnam from February 29 to March 4. The event includes a two-day developer competition, a closed-door charity Texas Hold'em competition and a two-day industry summit.

Binance official website conference information

However, the Civil Aviation Administration of Vietnam issued a statement on February 1, saying that in order to prevent and control the epidemic, all flights between China and Vietnam will be cancelled. The flight ban will take effect immediately.

"Binance's Vietnam Summit is likely to be postponed." Blockchain practitioner Wang Yang told Yiben Blockchain.

Domestic offline blockchain activities will also be suspended due to the epidemic.

Data from the event website shows that there are currently 50 offline blockchain events across the country that are still in the "ticket sales" status, involving nearly 20 cities including Beijing, Shanghai, Hangzhou, and Shenzhen.

“Who would dare to go to a conference now?” Wang Yang said. “It’s obvious that these conferences can’t be held as scheduled.”

Coindesk reported that Jason Wu, CEO of digital currency lending platform DeFiner, said he had canceled 12 meetups in China. “During the epidemic, no one wants to attend the meeting,” he said.

Outside the cryptocurrency circle, technology service providers in the blockchain industry are also facing challenges from the epidemic.

On February 3, Zhang Wen's Guangdong blockchain company officially started operations, with all employees working remotely from home. But this obviously cannot guarantee the company's operational efficiency.

"In the early stage of customer acquisition, customers were all recruited by pre-sales consultants," he said. "Now that no one can travel, pre-sales consultants can only sort out documents and business materials at home for future presentations."

If the epidemic continues, it is obvious that many blockchain practitioners will have nothing to do. "Some companies will definitely lay off employees because of this," said Wang Yang.

Customer acquisition was hindered, and the promotion of many existing businesses also encountered problems. On February 3, Zhang Wen was busy calling customers to communicate project progress.

“We have to communicate with each client one by one to confirm whether they are capable of working remotely with us,” he explained. “In fact, if the client cooperates, 85% of our work can be completed online.”

Online work has alleviated the pressure on companies to a certain extent, but in Wuhan, the epicenter of the epidemic, some companies are still worried about when to resume work.

A person in charge of a blockchain company with a branch in Wuhan told Yiben Blockchain that the Wuhan branch will not resume work until at least February 10, and even if it does, employees can only work remotely first.

"Our headquarters is also assisting Wuhan HR in its work, counting employees' body temperatures every day, collecting the latest epidemic information, and looking for various channels to purchase protective supplies such as masks for use after work resumes." The above person said.

With a powerful enemy ahead, the entire blockchain industry is on high alert.

03Mining industry is still stable

In the face of the epidemic, will the mining industry, which has the most "physical" attributes in the blockchain industry, be affected?

Currently, 70% of the world’s Bitcoin computing power is concentrated in China, and Chinese miners are mainly concentrated in Inner Mongolia, Xinjiang, Yunnan, and Sichuan, a major mining town.

As of February 3, Sichuan has confirmed 254 cases of COVID-19, Yunnan has confirmed 105 cases, Inner Mongolia has confirmed 34 cases, and Xinjiang has confirmed 24 cases. Some people are worried that once the epidemic spreads in Sichuan, the Bitcoin mining industry will suffer a heavy blow.

However, many front-line miners and mine owners told Yiben Blockchain that in the short term, the epidemic will not have a significant impact on the mining industry.

This is because most Bitcoin mines are built in deep mountains and forests with sparse populations and limited mobility, and are hardly affected by the epidemic.

"So far, I haven't heard of any mines closing down due to the epidemic," said Chen Hanping, a miner in Yunnan. "As long as there is power and internet connection, the mining machines can keep mining, and the mining machines won't get pneumonia."

In addition, Bitcoin mining is not a labor-intensive industry. Many medium-sized mines with thousands of mining machines only need two operation and maintenance personnel. In addition, the mines are open 24 hours a day throughout the year, and there is no problem of "difficulty in resuming work" caused by the extended Spring Festival holiday.

Some miners said that compared with the epidemic, the price of coins has a greater short-term impact on the mining industry, "as long as the price of coins goes up, everything will be fine."

However, some people have expressed concerns.

"If the epidemic continues for a few more months, the mining industry will definitely be hit," said miner Wang Chuan.

Two months later, Sichuan will usher in the flood season. In the past, many mining machines would be transferred from thermal power mines in Inner Mongolia, Xinjiang and other places to hydropower mines in Sichuan. However, if the epidemic continues, these mining machines will not be able to be successfully transferred.

"The road to a county town under Ya'an City, Sichuan Province has been closed. Cars from other places cannot enter, and the mining machines cannot be turned on." Wang Chuan told Yiben Blockchain.

But he also pointed out that the mining industry is not the only one affected by the disruption of logistics. Compared with other industries, the impact on the mining industry is not that severe.

In fact, beyond miners and mining farms, the epidemic has a greater impact on China's mining machine manufacturers and distributors.

Recently, mining machine manufacturers Bitmain, Canaan, and Shenma have all issued announcements, announcing the postponement of the production, delivery, and after-sales time of mining machines.

Take Shenma Mining Machine as an example. On January 29, Shenma issued an announcement stating that in view of the current epidemic situation, Shenma's Spring Festival holiday will be extended to February 9. Shenma's production, delivery, after-sales delivery and repair arrangements will also be delayed.

The mining machine company most affected by the epidemic is Wuhan-based Xindong.

An Innosilicon customer service representative told Yiben Blockchain that the Innosilicon customer service is still online, but after-sales maintenance of mining machines will not resume until the factory resumes operations on February 10.

Due to the restrictions on the production and transportation of mining machines, the mining machine products of major mining machine manufacturers have almost stopped selling. As of now, Bitmain’s official website shows that popular mining machines such as Ant T17 and S17 are all sold out, and the price of mining machines may rise in the future.

Bitmain mining machine sales page

At present, all mining machine dealers in Huaqiangbei have also stopped working. "Huaqiangbei Market has issued a notice to postpone the opening time to February 10. Our cooperating logistics company is also not working now." said a merchant who runs a mining machine business in Huaqiangbei.

In some mining machine trading groups, there are still people posting advertisements, but the vast majority of mining machines cannot be shipped.

Some mining machine manufacturers even "changed careers" and started a mask business in the group.

In a mining machine industry group, a practitioner is selling masks

It is currently impossible to tell when this epidemic will end.

But no matter what, most blockchain practitioners remain optimistic.

"Compared with many physical industries, the blockchain industry has been limited in its impact," Zhang Wen said. "As long as we survive, there is hope."

*Some of the interviewees in this article are pseudonyms.