TokenInsight talks with the chief - new trends in mining, who is leading the future?

/ Activity Introduction/

In this issue of "Dialogue with the Chief", TokenInsight's special guests include Shao Jianliang, General Manager of Canaan Blockchain, Lv Yongshuang, CEO of Universal Computing Power, Zhuang Zhong, CEO of BTC.com, and Zou Yongcheng, Global CEO of Renren Mine/RRMine. Together with top industry media such as ChainNews, Liandede, Coin Express and CoinVoice, they will reveal the new future trends of blockchain mining.

Canaan Blockchain General Manager - Shao Jianliang: Hello everyone, I am Shao Jianliang from Canaan Technology's Blockchain Business Unit.

CEO of Wanyou Computing Power - Lv Yongshuang: Let me first briefly introduce Wanyou Computing Power. Wanyou Computing Power is an innovative ecological platform focusing on the blockchain field. The company integrates cutting-edge resources with a global vision and connects the physical world and the digital world with blockchain technology, establishing an industry-leading position in the computing power market.

Based on the world's leading data center, Wanyou Computing Power integrates the resource advantages of the United States, Canada, Russia, Sweden, Southeast Asia and other regions. Its business covers multiple fields such as hardware equipment research and development, digital asset trading, and computing power contract sharing. It has also launched a data center interaction system based on the Internet of Things thinking, realizing the integration of computing power ecology and the transparency of digital assets.

As an enabler and promoter of the industry ecosystem, Wanyou Computing Power has been improving its computing power internally and connecting the ecosystem externally since its inception, building an ecological system for the digital world through collaborative innovation of three major product series.

We will hold a press conference on December 9th to introduce these products in detail. I hope everyone will pay attention then. Thank you.

BTC.com CEO Zhuang Zhong: BTC.com mainly provides multi-currency open source mining pools and blockchain browser services. We have accumulated a certain amount of experience in the field of PoW mining, and are at the leading level in computing power and services for multiple currencies. We also hope to expand more partners, show more comprehensive blockchain data to industry users on the BTC.com brand, and improve the industry's infrastructure and resource access.

Renren Mine/RRMine Global CEO Zou Yongcheng: Renren Mine has been deeply involved in the mining industry for 3 years and is the world's first cloud computing power trading and management platform. Its business currently covers many countries and regions including China, Japan, South Korea, Singapore, Germany, Australia and Taiwan.

/ First session: Lianwen asks Canaan Technology /

Chain News-Pan Zhixiong: Canaan Creative has been successfully listed on the Nasdaq. In the future development path, how will Canaan Creative plan its mining machine production business?

Canaan Blockchain General Manager-Shao Jianliang: Our company, for so many years, has mainly had mining machines as its core business! Therefore, in the future business development plan, the mining machine business may also be a business segment that we mainly focus on developing.

Of course, I think we are now thinking about how to make the mining industry more accepted by mainstream society, so we have recently been considering using the supercomputing industry to replace the overall external image of our mining industry.

Lianwen-Pan Zhixiong: Will you continue to overcome technical difficulties based on the existing 7nm chips and develop chips with more efficient performance?

In terms of the layout of the mining machine business, we will focus on the equipment we produce with higher and more advanced technology. As you all know, last year we took the lead in using 7-nanometer technology to produce our equipment. However, considering some competitors in the market and the stage of the development of the entire industry, we currently have both 7-nanometer and 16-nanometer products on the market.

Of course, we are already paying attention to the production and R&D of next-generation 5-nanometer and other process products. As long as the market demand can support us to expand our business, we will definitely be the first to launch a technology iteration in this regard in the market.

Chain News-Pan Zhixiong: Looking at the entire mining machine production industry, in addition to chip performance, what other aspects of mining machine production can be improved in the future?

Canaan Technology's successful listing also shows that this industry is gradually maturing and gradually entering the vision of mainstream capital. The upstream and downstream enterprises surrounding the mining machine manufacturers are also gradually enriching, and the entire ecosystem is also being established and improved. As we all know, mining is not just about our mining machine manufacturers. In serving the entire industry, mining farm hosting, mining pools and other back-end services are all major components of this industry.

Therefore, companies in every link of the entire industrial chain are constantly maturing, which is conducive to effectively protecting the experience and benefits of customers in the entire mining machine industry.

Chain News-Pan Zhixiong: What kind of landscape will the mining machine manufacturing industry face in the coming year, especially after the halving?

Next year's output will be halved, which I believe is also a topic of concern to many people in the industry. The halving is a very severe challenge for many mining machine manufacturers.

This is a relatively important challenge for the production capacity and cost-effectiveness of the new generation of mining machines. Without sufficient financial strength and a good grasp of product performance, most mining machine manufacturers may disappear from the industry after this round of halving of production.

Any difficulties also bring opportunities. Our company is very optimistic about the development of the entire industry next year. We will invest more funds and technologies next year to ensure that we have new product iterations and launch them to the market, and continue to provide competitive products to our customers.

/ Second session: Liandede asks questions about the universal computing power/

Qi Lingge from Liandede: Bitcoin will see a reduction in production in May 2020, and miners’ block reward income will drop significantly. At the same time, due to the uncertainty of Bitcoin prices, how can miners reduce production costs through mine operations?

Wanyou Computing Power CEO-Lv Yongshuang: Our team started mining in 2013, and we first entered Sichuan to build a mining farm in 2016. We have experienced several rounds of bull and bear markets, and we are still in the industry. Our computing power share has always been at the forefront of the world. Therefore, we have made a lot of arrangements in advance for the halving in May 2020.

Due to the uncertainty of currency prices, if you want to survive in the mining industry and cross several bull and bear cycles, several factors are particularly important: 1. Low electricity prices 2. High-performance machines 3. Efficient mine management.

We have been working hard, especially on points 2 and 3. We are buying some new high-computing-power mining machines for upgrading. We have two large mining pools and our own computing power. We have more than 100,000 new-generation machines. We will disclose the operating status of the machines in real time and monitor and manage the mining machines in a very timely manner.

Our three measures are: looking for cheap electricity around the world to build mining farms, purchasing and updating various new high-performance mining machines, optimizing mining farm management, and developing high-tech software.

Liandede-Qi Lingge: Will the mining farms undergo industrial upgrading in the future and develop in the direction of refinement and industrialization?

As our scale increases, there is a tendency towards centralization, so we adopt a computing power contract model that can disperse computing power and decentralize. Our contracts can be purchased for more than 100, and mining machines can be withdrawn. We hope to allow the public to participate in mining and contribute to the Bitcoin ecosystem. Our team comes from all over the world, with many outstanding engineers, including an IoT team working on automated farms in the United States and a team working on aviation in Russia. Although the product is simple, it embodies many technologies.

On December 9th we will hold a large product launch conference to give a detailed description of the products we have developed throughout the year, and everyone is invited to attend.

For example, this is a data we captured from the center. The mine is in Inner Mongolia. But I am in Chengdu now. I can see the real-time operation status of the machines in my mine through the background management software. Including the real-time computing power of the machine, the real-time work number, and even the specific status of each chip, such as the fan and temperature. It is currently compatible with the mainstream mining machines on the market.

Many people are concerned about the halving and what will happen to S9 in the future. Now the daily output of S9 is very low, and in some places with high electricity prices, they have already shut down.

As far as I know, some people in the market are using the two-in-one method, removing the redundant fans and control boards, and combining two machines into one machine to reduce power consumption. But there is a problem with this, if the price of the currency goes up, how to put it back together?

This method is labor-intensive and requires many more accessories. Therefore, we have developed a new optimized firmware for S9. According to the current measured data, if the machine is in good condition, the power consumption can reach 77-80.

/ The third session: BTC.com asked questions by CoinNews /

CoinNews-Amy: The competition among Bitcoin mining pools has become fierce in the second half of 2019. In the face of competition, how will BTC.com adjust its business layout in the future? How can it provide users (miners) with better services by optimizing mining pool products to attract more miners to join?

BTC.com CEO Zhuang Zhong: BTC.com is currently in a new planning stage for its brand and product matrix. In the mining pool business, we will carry out in-depth cooperation with financial service providers, integrate a variety of value-added services into mining pool products, and solve a series of problems such as miners' lending and hedging. These products will also appear in an intuitive and easy-to-use form.

Beenews-Amy: Are you considering expanding your business lines based on the existing traditional mining pool business to provide miners with more comprehensive mining services?

We are also expanding the list of currency options, and the mining pool will actively communicate with community users to screen high-quality currencies.

In terms of the BTC.com brand, we use our current browser products as the entry point to expand traffic-related businesses in all directions. We hope to integrate high-quality upstream and downstream resources to provide miners with a one-stop way to obtain mining-related services.

/ The fourth session: CoinVoice asked questions to Renren Mine/RRMine /

CoinVoice-Chen Kexin: How can cloud computing platforms operate more transparently and increase users’ trust in them?

RRMine Global CEO Zou Yongcheng: First of all, I want you to recall why Bitcoin uses blockchain technology? To solve the problem of trust. And why are there still many people who dare not participate in mining or hold Bitcoin? Because of the risks.

Renren Mine is not a computing power sales platform, but a cloud computing power asset management and trading platform. It aims to increase user trust through standardization and transparency, and bring more thorough trust through the underlying decentralized computing power asset management.

Users of Renren Mine/RRMINE are well aware of the standardization of computing power and transparency of income that has been achieved in the past. Users can easily see their own coin output income, and they do not need to directly contact the mining machine, or in other words, they do not need to contact the mining machine at all, which is a complicated process that they cannot handle.

CoinVoice-Chen Kexin: How can the computing power platform operate more transparently and increase users' trust in the cloud computing power platform?

The real driving force for bottom-level transparency and trust is a more thorough "decentralized" computing power asset management system. The Renren Mine platform system has now launched the RR Pool cloud mining pool. As a decentralized computing power asset management and clearing platform, RR Pool is a public chain. It integrates the computing power inventory management of aggregated mining power supply and computing power sales, the delivery management of computing power output connected to the mining pool, and the computing power assets of miners on the chain, completely decentralizing it.

RRPool, based on the public chain, connects to mainstream mining pools such as BTC\F2Pool\AntPool to complete the accounting of computing power output on the chain. Then, the computing power suppliers and computing power distributors of the platform complete the accounting of computing power assets on the chain and the delivery of computing power output on the chain. Users sign and sell computing power contracts to complete the accounting of individual computing power assets and outputs on the chain.

I believe this is the first time in the industry that decentralized management of computing power assets based on public chains has appeared. It also solves the problems that have always existed in the industry: improving the scale efficiency and stable income of digital mining; the authentication and certification capabilities of computing power; and providing retail investors with more flexible and low-cost mining participation opportunities.

Computing power itself is decentralized, and decentralization is the fundamental way to solve the trust issue. So let me go back to the question. It is not only about allowing users to come into contact with mining machines that it is called "trustworthy". Decentralized operations are the way to make computing power assets truly trustworthy assets.

/ Fifth session: Round table question 1/

Chain News-Pan Zhixiong: Bitcoin's production cut in May 2020 is one of the hottest topics in the industry. What impact will the production cut have on the price of the currency and mining? If the production cut does not bring about a rise in the price of the currency, does it mean that the 16nm mining machines currently running in the market will face elimination? Is the mining industry facing a reshuffle? What impact will it have on your respective sub-industries?

Canaan Blockchain General Manager - Shao Jianliang: The impact of production cuts on the entire industry is still relatively large. The adjustment of rules every four years is actually a test for miners in the industry, testing everyone's different judgments and decisions on an event. If we look at this matter statically, after the production cuts, miners' income is halved, and most of the old mining machines have reached the shutdown price and stopped mining directly. A small number of advanced mining machines can continue to make profits because of their low power consumption, but their payback period is also correspondingly extended.

But these are only ideal conditions. The actual situation is that the market sentiment and the invisible hand in the market will affect the adjustment of the currency price and computing power difficulty. I think the mechanism of Bitcoin mining is very sophisticated. After each event, it has a self-coordination mechanism. After the previous production cuts, the market ushered in a wave of rising cycles. I believe that this time there will be a similar impact. The power of the cycle is very strong. We need to understand the opportunities brought by the cycle.

If the production cuts do not lead to an increase in the price of the currency, the 16nm process will certainly be shut down in the short term, but that is only temporary. For example, when the price of the currency was low at the beginning of this year, the 16nm process was also shut down, but with the rise in the price of the currency and the arrival of the flood season, the 16nm machines are running again.

The mining industry has been adjusting all the time. Every year, new participants come in and every year, some people leave the industry. As long as the industry has cycles and there are profits, there will be competition. As a veteran company in the industry, what we need to do is not to make mistakes, do what we are good at, and serve our users well. This is our greatest value.

Wanyou Computing Power CEO-Lv Yongshuang: I think the impact of production cuts on the entire mining industry is still very large. Every cycle is a reshuffle. It is also a process that allows more people to have the opportunity to participate. It is a good design mechanism of Bitcoin.

For those of us who are deeply involved in the mining industry, we will not predict the rise and fall of the currency price, but make various arrangements and preparations in advance so that we can survive in various situations. Only when the miners survive can the Bitcoin network be maintained.

Our team was one of the first to build a mine in Sichuan, and we are also the first to stick to the mining industry and never consider leaving. The mechanism design of Bitcoin is very clever. As long as you do something beneficial to the entire ecosystem, you will eventually make a profit.

So we will do it from three aspects: looking for sites with low electricity prices around the world for construction; maintaining the quality of the mining machine assets in the group and preparing for updates and iterations in advance; and continuously refining and professionalizing the operation of the mining farms.

Therefore, the mine visualization management software we developed will also be developed for the market, hoping to bring good products to the majority of miners. We will also continue to develop computing power contract products to disperse the computing power again, so that everyone can easily participate in mining.

This is a function in our computing power manager system that can optimize mining machines and allow S9 mining machines to survive longer when the coin price is low and the electricity price is high.

BTC.com CEO Zhuang Zhong: The halving will still have a huge impact on mining pools. If the price of the currency is low, it may cause many small-scale mining pools to be unable to operate. For medium-sized and larger mining pools, they must also be prepared and make arrangements in advance.

The industry is now very professional, and the management of mining farms has become more refined and automation has been significantly improved. The last round of market downturn also gave rise to various mining machine optimization and frequency reduction solutions, including the recent S9 dual-barrel method, which can better support the price of coins.

In terms of fund management, more experienced miners are using a combination of financial tools to hedge against risks. We are also committed to launching integrated, easy-to-use services.

Zou Yongcheng, Global CEO of Renren Mine/RRMine: In fact, digital assets themselves are cyclical, and it is very important to have a long-term perspective. In the short term, production cuts will definitely have a greater impact on coin prices and the mining industry, but in the long run, this is a good thing to enhance the entire industry's awareness and ability to cope with risks.

First of all, we are confident about the long-term value of Bitcoin. The halving of Bitcoin is indeed a fatal blow to existing miners, as their income has been directly reduced by half. However, correspondingly, after years of industry development and user education, the entire industry has continuously improved technology, optimized costs, and developed more forms of mining, and miners have become more and more rational.

Every bear market is a time window for optimizing power resources and energy consumption resources. The ability of the entire industry to cope with risks is constantly improving. At least for now, we can see that most of the 16nm mining machines are on the verge of shutdown. As for whether they will be eliminated, I believe that Mr. Shao of Canaan has just given a professional answer to this question.

For users of Renren Mine platform, the platform provides standardized computing power contract services, and the main focus is on the platform's operational capabilities. Whether the mining machines will be eliminated is not something they need to worry about. Our users only need to concentrate on the layout.

As for the reshuffle of the mining industry, it is inevitable. Only enterprises that can better cope with risks can survive to the end. Every time there is a big market fluctuation, there will be a reshuffle of the industry. Among them, enterprises with insufficient ability to cope with risks will be cleared out, leaving enterprises with stronger ability to cope with risks, and developing in the direction of industrialization and platformization. This is normal. The changes in the market cannot be controlled or predicted.

Therefore, whether it is mining pools, mining farms, or mining machine manufacturers, including computing power platforms, they are all seeking their own way out. Renren Mine has been constantly responding to various challenges in the past three years, continuously improving the platform's operating capabilities, and has developed its own unique model of global computing power asset management and trading platform. Therefore, for computing power platforms, there will be a certain impact, which is actually a good thing.

The future of the mining industry will definitely not rely solely on the price of coins. The current dilemma of the industry is that despite a certain degree of risk resistance, it is still affected by market fluctuations. The reason why Renren Mine is committed to building the infrastructure of global computing power assets is based on the consideration of long-term operation in the future. The more crises there are, the more they drive the evolution and development of the entire industry, providing our users with opportunities for flexible layout.

/ Session 6: Roundtable Questions 2/

Qi Lingge, Liandede: The mining industry involves many links, forming a relatively complete industrial chain structure. In the future, will the division of labor among the various entities in the mining industry chain become clearer or more vague? What causes this phenomenon? Will retail investors have more opportunities to get involved in the industry in the future? Will mining products represented by cloud computing products become more financialized in the future? What new industrial opportunities will the more financialized and formalized mining industry have in the future?

Shao Jianliang, General Manager of Canaan Blockchain: Canaan's listing represents the birth of a new species in the blockchain industry on the one hand, and the gradual maturity of the industry on the other. In the future, as the leading enterprises become more professional, the integrity of the industrial chain will become more necessary, the division of labor in the industry will become clearer, and the industry standards will also be formulated by these leading enterprises.

Because through these mature enterprises, institutional funds and high-net-worth clients will participate, they will have higher service requirements for the products and need more professional institutions and teams to serve them, which gives this industry opportunities.

In the future, retail investors can access this industry through cloud computing power, which is a very good bridge between professional institutions and retail investors. For retail investors to choose cloud computing power, I also have some suggestions for your reference.

The current selection criteria for cloud computing platforms are nothing more than understanding how the cloud computing service platform selects mining machines and how to choose mining farm hosting. These two points also directly determine whether the cloud computing service platform we choose is reliable. Because we do not directly own the mining machines and cannot directly monitor the operation of the mining farm, when choosing a cloud computing service platform for mining, we should try to choose those trustworthy platforms.

There are many fake cloud computing platforms on the market now. Those cloud computing platforms only show customers some numbers on the front end, but customers actually don’t know whether there is real computing power running behind them.

As the industry develops, the standards of the cloud computing industry will gradually improve. Currently, there are many cloud computing service platforms and cloud computing suppliers on the market. For example, Genesis Mining is a service platform that directly provides computing hosting to users, and Interhash is a company that focuses on helping traffic platforms provide overall cloud computing solutions.

Once the industry can be standardized, its financial attributes will be strengthened. Currently, many financial derivatives have been used in the industry, which is very helpful for users with different risk preferences to participate in the development of the industry.

Standardized pit digging and diversified financial derivatives are prerequisites for this industry to attract more mainstream funds. A trillion-dollar market requires the construction of a very mature industry infrastructure. Therefore, we believe that there are still many opportunities around the pit digging industry. In the future, many valuable companies, unicorn companies and listed companies will be born in this industry.

Wanyou Computing Power CEO-Lv Yongshuang: Regarding the first question, I think the division of labor in the mining industry will be clearer in the future. Our team has grown from a small mining workshop in 2013 to the Wanyou Computing Power Group Company. Mining field construction, mining machine management and operation, mining pool, computing power contract middle platform, etc. are all independent and cooperative departments. But this is an open and win-win market, so almost every department of ours is open to cooperation.

Including our computing power contract middle platform, which is solving the standardization of mining machine computing power output, and has also cooperated with many computing power exchanges. Our self-developed Bitcoin computing power browser is to trace the real-time situation and real output of each mining machine. In order to better serve the computing power contract, we have rebuilt two mining pools. At present, they are all our own computing power, in order to output standard computing power contracts more stably. We hope to build an open ecosystem together and collaborate with all links in the ecological chain.

Therefore, the industry will actually be more ambiguous in the future, and there may no longer be a division between the mining circle and the currency circle. The computing power contract will also be used as a target for quantitative teams. Our strategically partnered computing power contract trading platform 1TMine.com is a project that allows retail investors to participate in the industry more conveniently. Only when more people participate in the industry and the computing power becomes more standardized and transparent can the computing power flow better.

In the future, computing power products will be more financialized and formalized. Teams that can standardize and finely operate every link with real computing power endorsement can survive bull and bear markets. We hope to provide standardized products to the market, and will also launch a platform for bulk transactions in the future to provide customized computing power contract products to large-scale customers. I hope everyone can pay attention to us and cooperate more. Once again, I invite everyone to attend our 12.9 product launch conference, thank you!

BTC.com CEO Zhuang Zhong: From the historical development of the mining industry, it is currently developing from a vague industry division of labor to a stratified, multi-polarized, and specialized direction. The core reason is believed to be the user stratification and scale expansion of the mining industry, from a few large miners to a complete industrial chain. There are more and more professional service providers in the subdivided fields.

It can be seen that more and more retail investors have shown strong interest in and willingness to invest in the mining industry, but the transition from the traditional industrial structure to more C-end retail investors will take a long time to develop. Currently, cloud computing products provide retail investors with the most direct channel to learn and become familiar with the mining industry. The evolution of financialization has become a trend in the mining industry, this is certain.

Traditional miners are no longer satisfied with the existing basic mining services. With the improvement of the surrounding industries of the mining industry, miners have an increasingly strong demand for financial business products. It is believed that the development direction of financialization and formalization will attract more investors in the traditional investment field and inject a strong fresh blood into the existing mining industry.

RRMine Global CEO Zou Yongcheng: Actually, this question can be divided into four parts:

1. The division of labor among various entities will become clearer, but each entity may try to get involved in more links in the industry at the upstream, midstream and downstream levels.

The first is why the division of labor is more clear. As the market value of the entire industry increases, the mining industry has evolved from individual mining to mining in mining pools and mines, and then to a new model in which platforms provide computing power and individuals purchase computing power contracts for mining.

This evolutionary process has been moving towards specialization and has a mature industrial chain. Upstream mining machine giants such as Canaan Creative and Bitmain have emerged, and they have continuously strengthened the performance innovation of mining machines to expand their market share.

The midstream has formed an industrial cluster with rich business formats such as mining farms, mining pools, and cloud computing power, providing a sufficiently complete basic supporting facility for Bitcoin mining. The downstream has strong demand. When the market improves, both mining machines and computing power are often in short supply.

The various entities in the mining industry chain are constantly deepening their cooperation with each other and have a certain degree of resilience and risk resistance, but are still subject to fluctuations in currency prices. Therefore, the upstream, midstream and downstream will actively try to contact more links to seek more stable development.

2. It is inevitable to provide retail investors with more opportunities to get involved in the industry. With the large-scale and centralized development of mining farms, individual miners may have a harder time in the future, and their living space may become smaller and smaller.

But this is not conducive to the development of the entire industry. Decentralization is an important part of the development of both the mining industry and Bitcoin. If the mining industry does not have a large number of individual miners downstream and Bitcoin does not have sufficient user support, both will lose value. Therefore, retail investors will have more opportunities to access the industry in the future.

3. Financialization is a key step in the upgrading and iteration of the industry. On the road of upgrading and iteration of the specialization and industrialization of the mining industry, the assetization and financialization of computing power are inevitable. The assetization and financialization of computing power will reshape the entire mining industry and change the demand trend of the primary and secondary markets, thereby affecting and shaping the cryptocurrency industry. The current mining industry has problems such as high industry barriers and operating efficiency.

In short, the current mining industry requires high investment, ordinary users cannot participate, and the industry threshold is high; the mining industry is not financialized enough, and assets cannot circulate freely. Therefore, it is necessary to assetize and financialize computing power to effectively lower the industry threshold and promote the free circulation of global computing power.