Mining Market Revenue Report for December 2019

Mining Market Revenue Report for December 2019

Key points of this report:

• Preface

• Currency price: The average price of the top ten mining currencies fell by 20.08%

• Total network computing power: The average computing power increased by 19.77%, and XMR computing power increased the most

• Unit computing power income: The average daily income of the top ten mining currencies fell by 22.67%

• Mining machine cost: ASIC mining machine prices fell by an average of 8.7%; graphics card prices remained stable

• Mining revenue analysis: The payback period of mining machines is extended by an average of 129%

• Summarize

Details of this report:

1. Introduction

This report provides mining revenue of mainstream POW mining coins, and calculates the static payback time based on the unit computing power revenue at the beginning of the month, for reference only. There are three main factors that affect the payback period of miners: coin price, total network computing power and mining machine price. The shorter the payback period, the better the current market's money-making effect, and the higher the possibility of potential large capital entering the mining market. When the mining revenue continues to be unable to cover its costs, a large number of miners will choose to turn off the mining machines.

Affected by the sharp increase in the computing power of the entire network and the downward trend of the coin price, the overall payback period of mining machines this month has increased significantly. The payback period of static calculations has been extended by an average of 129% compared with last month. Some mining machines can no longer pay back at the current difficulty. Judging from the current trend of coin prices, the market has generally shown a volatile pattern recently. After the large-scale decline, the market transaction volume has continued to be sluggish, the upward momentum has been curbed, and the market sentiment has remained cautious. In addition, the computing power of mainstream mining currencies has continued to fluctuate upward, and the investment risk of the mining industry has increased; after the leading mining machine manufacturers launched models such as installment payments and mining machine leasing, the promotion of new models may amplify the financial leverage of the mining industry and promote further increases in computing power. As major mining machine manufacturers have successively launched new mining machines, the entry of high-performance and high-computing mining machines will gradually withdraw some high-energy consumption ratio computing power, and investors need to strengthen their risk awareness; in addition, after the National Development and Reform Commission deleted the "virtual currency 'mining' activities" originally listed as eliminated industries, the instructions for mining companies to implement orderly withdrawal in some regions have not changed, and the regulatory attitude has not been relaxed for the time being.

2. Currency price: The average price of the top ten mining currencies fell by 20.08%

In December, the total market value of global blockchain assets fell by about 20% compared with early November, with an average daily trading volume of about US$58.5 billion. The overall market has been volatile recently. Due to the frequent release of important news, some signals have a reverse impact on market prices, causing the prices of mainstream currencies to quickly "turn around"; after a large-scale decline, the market trading volume continued to be sluggish, and the increased risk aversion of investors hindered the entry of new funds, and the upward momentum was curbed to a certain extent. Overall, prices will still fluctuate in the range in the short term, and the market outlook is not clear, and market sentiment remains cautious.

Figure 1 Market trends in the past two months

Source: CoinMarketCap, TokenMania

Figure 2: Price fluctuations of mainstream mining currencies this month

Source: CoinMarketCap, TokenMania

The prices of the top ten mining currencies fell this month, with an average price drop of 20.08%. BCH price dropped the most, down 27.59%, DASH, LTC, and BSV dropped 27.33%, 25.52%, and 25.29% respectively. In addition, ETC, ZEC, ETH, and BTC all dropped by more than 15%. Generally speaking, a drop in currency prices will extend the payback period of mining machines.

3. Total network computing power: The average computing power increased by 19.77%, and XMR computing power increased the most

In theory, the proportion of computing power controlled by miners in the entire network determines the success rate of their mining. The higher the proportion, the greater the possibility of miners receiving rewards. At the same time, the increase in the computing power of the entire network will lead to a relative increase in the difficulty of mining for miners.

Table 1: Computing power of mainstream mining currencies in the past three months

Source: Block Explorer, TokenMania

Figure 3 Changes in the computing power of mainstream mining currencies this month

Source: Block Explorer, TokenMania

The hashrate of the top ten mining currencies fluctuated this month, with an average increase of 19.77%. Among the top ten mining currencies this month, the hashrate of 6 currencies increased. Affected by the algorithm update, XMR's hashrate grew the fastest this month, with an increase of 206.05%. In addition, BTC rose by 10.68%, DASH rose by 5.53%, and ZEC rose by 4.41%. This month, the hashrate of 4 currencies showed negative growth, among which BSV and BCH fell the most, falling by 11.75% and 8.86% respectively. The hashrate of LTC and ETH also fell this month. In order to weaken the impact of ASIC mining machines, XMR successfully completed the algorithm hard fork at the end of November, switching the CryptoNight algorithm to the RandomX algorithm, and optimizing CPU mining. Subsequently, the XMR hashrate climbed from 300MH/s to 950MH/s, with a hashrate increase of more than 200%.

Figure 4: Changes in the growth rate of computing power of mainstream mining currencies in the past six months

Source: Block Explorer, TokenMania

[Note]: 1M=10^6Hash/s, 1G=10^9Hash/s, 1T=10^12Hash/s, 1P=10^15Hash/s, 1E=10^18Hash/s

4. Unit computing power income: The average daily income of the top ten mining currencies fell by 22.67%

Unit computing power income refers to the daily mining income calculated based on the proportion of unit computing power of different currencies in the entire network and the fluctuation of currency prices, excluding the impact of mining machine costs. Taking Bitcoin as an example, the unit computing power income refers to the RMB income that can be obtained from 1THash/s computing power in a single day. In theory, the computing power controlled by miners is proportional to the daily income.

Table 2 Daily revenue per unit of computing power of mainstream mining currencies (unit: yuan)

Source: TokenMania

[Note] There are differences in the minimum unit computing power between different currencies: BTC is 1THash/s, ETH is 1MHash/s, BCH is 1THash/s, BSV is 1THash/s, LTC is 1GHash/s, XMR is 1KHash/s, Dash is 1GHash/s, ETC is 1MHash/s, ZEC is 1KHash/s, and DCR is 1THash/s.

Figure 5 Changes in unit computing power revenue of mainstream mining currencies this month

Source: TokenMania

Affected by the changes in the price of coins and the computing power of the entire network, the daily computing power income of the top ten mining currencies this month has basically declined, and the daily computing power income of the unit has dropped by an average of 22.67% compared with the previous month. Affected by the increase in computing power, among the top ten mining currencies this month, only DCR's daily computing power income increased by 0.08%, and the income of the other 9 currencies all declined. This month, the unit computing power income of XMR fell the most, by 71.89%, followed by DASH, with a drop of 31.46%. In addition, the computing power of ETH, ZEC, ETC, and BCH also fell by more than 20%.

Figure 6: Changes in the growth rate of unit computing power income of mainstream mining currencies in the past six months

Source: TokenMania

5. Mining machine cost

Due to the different encryption algorithms of various currencies, the current types of mining machines are mainly divided into ASIC mining machines and graphics card mining machines. Due to the specificity of the former, the price of its mining machines is more obviously affected by the currency price. On November 30, Monero switched the CryptoNight algorithm to the RandomX algorithm to weaken the impact of ASIC mining machines on network computing power and optimize CPU mining; although ETH and ETC have ASIC mining machines, their advantages over graphics card mining machines are relatively unobvious.

Table 3 Mainstream mining currency encryption algorithms

Source: TokenMania

5.1 ASIC mining machine: the average price of mining machines fell by 8.7%

According to data from early December 2019, the average spot price of Canaan Creative's mining machines this month changed by -2.32%, the average spot price of Bitmain's mining machines changed by -23.86%, and the spot price of Ebang International's mining machines remained the same. Due to the dramatic changes in the supply and demand of mining machines, which are greatly affected by market fluctuations, price statistics are for reference only.

In addition, after experiencing recent personnel changes, Bitmain launched an installment payment model and a mining machine leasing model in early December. Under the mining machine leasing model, Bitmain provides part of the mining machines and electricity costs, and the partners provide mining sites and operation and maintenance for joint mining. Net income customers can get 25% profit after deducting electricity costs; the promotion of the new model may amplify the financial leverage of the mining industry, promote further increases in computing power, and some computing power with high energy consumption ratios will gradually withdraw.

Table 4 Price changes of mainstream ASIC mining machines

Source: Bitmain, Avalonminer, Ebit, TokenMania

5.2. Graphics card prices: Graphics card prices are stable, with an average price change of 0.56%

Due to different encryption algorithms, ETH and other cryptocurrencies currently use GPU mining machines, whose core components are customized mining motherboards equipped with 6 to 12 graphics cards. Due to the large number of sales channels for graphics cards, prices in different regions will vary, and the following is for reference only.

Figure 7 Price changes of various graphics cards this month

Source: Tmall, JD.com, Amazon, TokenMania

Figure 8 Graphics card price changes in the past six months

Source: Tmall, JD.com, Amazon, TokenMania

The prices of sample graphics cards this month were basically stable, with an average price increase of 0.56%. Among them, AMD's RX580 price increased by 10%, NVIDIA's GTX2000 price decreased by 2.67%, Vega64 decreased by 2.86%, and the prices of other graphics cards remained unchanged.

6. Mining revenue analysis: The payback period of mining machines is extended by an average of 129%

According to the full network data of each currency, according to the full network computing power data of each currency, assuming that the electricity fee is uniformly 0.45 yuan, the mining static payback period of each sample mining machine is calculated as shown in the following table (for mining machines that can mine different cryptocurrencies, the shortest payback period is selected).

Table 5 Payback period of mainstream cryptocurrency mining machines

Source: Public data compilation, TokenMania

This month, the payback period of Bitcoin mining machines for BCH and BSV is similar, and the payback period of BTC is relatively short. In terms of payback period, the seven mining machines with the shortest payback period are: Antminer S9K-14T (302 days, for BTC), Antminer S9SE (328 days, for BTC), Antminer S17E 64T (336 days, for BTC), Antminer S17Pro50T (343 days, for BTC), Antminer S17+73T (345 days, for BTC), Antminer T17E 50T (346 days, for BTC), and Antminer T17E 53T (346 days, for BTC).

Among the sample mining machines, the seven mining machines with the longest payback period and close to the shutdown price are: Avalon A851S (shutdown, for BTC), Ebit E10.1 (shutdown, for BTC), Ebit E10.2 (shutdown, for BTC), Ebit E10.3 (shutdown, for BTC), Ant L3+ (shutdown, for LTC), Ant D5119G (shutdown, for DASH), Avalon A851 (4399 days, for BTC).

Figure 9 Comparison of static payback of mining machines in the past two months

Source: TokenMania

Overall, the payback period of BTC mining machines in the sample mining machines has been extended by an average of 129% compared with last month. Among them, the payback period of Canaan Creative's high-computing power models this month is about 420 days, and the payback period of Bitmain's high-computing power models is about 350 days. The payback period is a static calculation, so investment should be cautious; in addition, the payback period of the sample graphics card mining machines this month is more than 1,000 days. At present, the risk of purchasing a new graphics card mining machine is relatively high, and the overall payback period is still not optimistic.

[Note] The above payback period is a static theoretical payback period. There is a certain deviation between this payback period and the actual payback period and it is for reference only.

Figure 10 Comparison of the return on investment of mainstream currencies in the past three months

Source: TokenMania

The sample mining machine data with the shortest payback time is selected as the payback time of the cryptocurrency, and the statistical results are shown in Figure 10. This month, the payback period of various currencies has generally been extended, with BTC payback time of about 300 days, BCH and BSV payback time of about 360 days; as XMR completed the algorithm hard fork, the computing power increased by more than 200%, and the payback period of the sample mining machine was significantly extended.

6. Conclusion

Affected by the sharp increase in the computing power of the entire network and the downward trend of the coin price, the overall payback period of mining machines this month has increased significantly. The payback period of static calculations has been extended by an average of 129% compared with last month. Some mining machines can no longer pay back at the current difficulty. Judging from the current trend of coin prices, the market has generally shown a volatile pattern recently. After the large-scale decline, the market transaction volume has continued to be sluggish, the upward momentum has been curbed, and the market sentiment has remained cautious. In addition, the computing power of mainstream mining currencies has continued to fluctuate upward, and the investment risk of the mining industry has increased; after the leading mining machine manufacturers launched models such as installment payments and mining machine leasing, the promotion of new models may amplify the financial leverage of the mining industry and promote further increases in computing power. As major mining machine manufacturers have successively launched new mining machines, the entry of high-performance and high-computing mining machines will gradually withdraw some high-energy consumption ratio computing power, and investors need to strengthen their risk awareness; in addition, after the National Development and Reform Commission deleted the "virtual currency 'mining' activities" originally listed as eliminated industries, the instructions for mining companies to implement orderly withdrawal in some regions have not changed, and the regulatory attitude has not been relaxed for the time being.

Currency price: The prices of the top ten mining currencies fell this month, with an average price drop of 20.08%. Among them, BCH price fell the most, down 27.59%, DASH, LTC, and BSV fell 27.33%, 25.52%, and 25.29% respectively. In addition, ETC, ZEC, ETH, and BTC all fell by more than 15%. Generally speaking, the decline in currency prices will extend the payback period of mining machines.

Total network computing power: The computing power of the top ten mining currencies fluctuated this month, with an average increase of 19.77%. The computing power of 6 of the top ten mining currencies increased this month. Affected by the algorithm update, XMR's computing power grew the fastest this month, with an increase of 206.05%. In addition, BTC rose by 10.68%, DASH rose by 5.53%, and ZEC rose by 4.41%. This month, the computing power of 4 currencies showed negative growth, among which BSV and BCH fell the most, falling by 11.75% and 8.86% respectively. The computing power of LTC and ETH also fell this month. In order to weaken the impact of ASIC mining machines, XMR successfully completed the algorithm hard fork at the end of November, switching the CryptoNight algorithm to the RandomX algorithm, and optimizing CPU mining. Subsequently, XMR's computing power climbed from 300MH/s to 950MH/s, with a computing power increase of more than 200%.

Unit computing power income: The average daily income of the top ten currencies fell by 22.67%. Affected by the changes in currency prices and the computing power of the entire network, the unit computing power daily income of the top ten mining currencies this month basically declined, and the unit computing power daily income fell by an average of 22.67% compared with the previous month. Affected by the increase in computing power, among the top ten mining currencies this month, only DCR's computing power daily income increased by 0.08%, and the income of the other 9 currencies all declined. This month, the unit computing power daily income of XMR fell the most, by 71.89%, followed by DASH, with a drop of 31.46%. In addition, the computing power of ETH, ZEC, ETC, and BCH also fell by more than 20%.

The price of ASIC mining machines fell by an average of 8.7%. According to data from early December 2019, the average spot price of Canaan Creative's mining machines changed by -2.32% this month, the average spot price of Bitmain's mining machines changed by -23.86%, and the spot price of Ebang International's mining machines remained the same. Due to the drastic changes in the supply and demand of mining machines, which are greatly affected by market fluctuations, price statistics are for reference only.

Graphics card prices were stable, with an average price change of 0.56%. The sample graphics card prices this month were basically stable, with an average price increase of 0.56%, among which AMD's RX580 price increased by 10%, Nvidia's GTX2000 price decreased by 2.67%, Vega64 decreased by 2.86%, and the prices of other graphics cards remained the same.

Mining income analysis: The payback period of mining machines has been extended by an average of 129%. This month, the payback period of Bitcoin mining machines for BCH and BSV is similar, and the payback period of BTC is relatively short. In terms of payback period, the seven mining machines with the shortest payback period are: Antminer S9K-14T (302 days, for BTC), Antminer S9SE (328 days, for BTC), Antminer S17E 64T (336 days, for BTC), Antminer S17Pro50T (343 days, for BTC), Antminer S17+73T (345 days, for BTC), Antminer T17E 50T (346 days, for BTC), and Antminer T17E 53T (346 days, for BTC).

Among the sample mining machines, the seven mining machines with the longest payback period and close to the shutdown price are: Avalon A851S (shutdown, for BTC), Ebit E10.1 (shutdown, for BTC), Ebit E10.2 (shutdown, for BTC), Ebit E10.3 (shutdown, for BTC), Ant L3+ (shutdown, for LTC), Ant D5119G (shutdown, for DASH), Avalon A851 (4399 days, for BTC).

Overall, the payback period of BTC mining machines in the sample mining machines has been extended by an average of 129% compared with last month. Among them, the payback period of Canaan Creative's high-computing power models this month is about 420 days, and the payback period of Bitmain's high-computing power models is about 350 days. The payback period is a static calculation, so investment should be cautious; in addition, the payback period of the sample graphics card mining machines this month is more than 1,000 days. At present, the risk of purchasing a new graphics card mining machine is relatively high, and the overall payback period is still not optimistic.