I am a miner. Four years after graduation, I became a mine owner.

Editor’s note: This article comes from Baihua Blockchain (ID: hellobtc).

The upstream of the blockchain industry is mining. Over the past decade, cryptocurrency mining has undergone tremendous changes.

In the beginning, one person with a laptop could mine Bitcoin. At that time, mining was cheap, so programmers were willing to spend 10,000 bitcoins they mined to buy two pizzas. Later, from CPU mining to GPU mining, and then to professional ASIC mining machines and mining farms, the threshold and degree of specialization of mining became higher and higher.

In the past decade, many people have entered this industry through mining.

Some people earned their first pot of gold through mining and reached the peak of their careers, while others failed and returned empty-handed.

Recently, Plain Language Blockchain interviewed 4 senior mining practitioners who entered the market at different stages. Let’s take a look at what they have experienced.

01 Dongchu: Entered the industry in 2015, "Four years after graduation, I became a mine owner"

Self-narration | Produced by Dongchu | Blockchain in vernacular

“Now, it may be difficult to replicate my mining experience and achieve success again!”

When I was in college, I loved playing games. I saw that the World of Warcraft studio was mining and read related reports. I knew about Bitcoin very early.

After graduating from university in 2015, I went to work at an electric power company. At the end of that year, I bought a few machines and started mining, mainly Bitcoin. Later, because my friends and I were all mining, we worked together to build a small mining farm, managing hundreds of machines, and thus embarked on the path of becoming a mining farm owner.

Although I entered the industry early, I didn’t make much money from mining in the early days. But by then I had gradually discovered that although mining didn’t make much money, it could bring a stable cash flow and help me keep some of my funds.

It was this understanding that helped me avoid a big pitfall later on.

In the cryptocurrency bull market of 2017, I bought Ethereum for more than 60 yuan and Litecoin for tens of yuan, and I made a lot of money by mining and hoarding coins. However, due to my lack of social experience, I invested in many projects after making money, and later almost all of them returned to zero.

So I can say that I failed miserably in investment. Now that I think about it, it’s fortunate that mining can bring continuous and stable cash flow, otherwise I would have lost a lot in 2018.

When it comes to investing, I feel that if one's cognition is not improved, if one does not have a stable cash flow and something that can support oneself, one's confidence will be affected and one's judgment will be wrong.

Later, my partners and I increased our investment in mining. Now the scale of the mine is getting bigger and bigger, and the total number of mining machines has reached tens of thousands. For efficiency reasons, we currently only serve large miners or institutions with hundreds or thousands of mining machines.

Mining has changed my life. Compared with my peers, I am now considered successful. If it weren’t for Bitcoin, I would still be working in the power sector, earning a fixed salary.

Although mining has encountered some difficulties, there will be setbacks in everything you do. Just think clearly and do it. There is no point in mentioning difficulties and setbacks. I have thought about mining very clearly. For me, I will continue mining in the next few years. The current business has already reached a small scale, and the customer cooperation is relatively stable. There is no reason not to do it.

02 Ji: I joined the industry in 2016. When I was most profitable, I had 120 Antminer S7 mining machines and earned over 10,000 yuan a day.

Self-narration | Produced by Ji | Blockchain in vernacular

I entered the industry by accident. Around August 2016, my former boss came to me and told me that mining could make money and was better than working outside. For this reason, I impulsively entered the industry when I had no idea about blockchain. I started from scratch, from buying mining machines, building mining farms, welding shelves, making distribution board sockets, and even making network cables myself.

Maybe it was because the foundation was too weak. We spent a lot of effort to buy 40 second-hand S7 mining machines, but only 27 or 28 of them were running at the beginning. The low startup rate will definitely affect the rate of return. Someone must be responsible for maintenance, and this task naturally fell on me, the youngest one. Without a master, I could only rely on self-study and exploration. I knew nothing about mining machine maintenance. There were basically no tutorials on the Internet at that time, so I went to a mining machine maintenance point at my own expense and studied for more than half a month. I figured out some principles, but the actual operation and welding of components could only be practiced slowly. Slowly, I became more and more proficient in machine fault diagnosis.

During the days when I was with the machines, I learned a lot of knowledge about Bitcoin and blockchain, and paid for many blockchain courses. Practice makes perfect. The more I understood Bitcoin, the more fascinated I became. My sense of the industry helped me successfully buy at the bottom in the subsequent bear market.

From the second half of 2016 to September 2017, our 40 mining machines could earn 2,000 to 3,000 yuan a day. Even during the extreme market conditions of September 4, 2017, we still earned more than 1,000 yuan a day. During the September 4 period, many people were pessimistic about Bitcoin, and mining machines were sold in large quantities. A second-hand Antminer S7 was only 1,300 yuan. We went the other way and bought 80 mining machines at the bottom. We got our money back in just over a month.

At that time, our 120 mining machines brought in over ten thousand yuan a day at its peak.

Small miners are increasingly marginalized. Of course, if you have extremely low-priced electricity resources, the situation is different. Currently, mining companies have invested heavily in building large mines and purchasing mining machines in batches, which also gives them a relatively large advantage in terms of electricity costs and machine prices. This year, due to some special circumstances and the extremely poor market conditions at the beginning of the year, the cost of my own mine has risen sharply, and our team has closed our mine after discussion.

If you want to be a small miner, it is best to start with the job of mine operation and maintenance. You can also directly host it, but there are more pitfalls. The monthly income of mine operation and maintenance is about 7K to 13K, depending on your ability and sense of responsibility. However, most mines are located in remote areas, and being able to endure loneliness is a prerequisite; secondly, the daily work of mine operation and maintenance is boring and fixed. The most important task is to ensure the normal operation of the machine and solve the problem of insufficient computing power of the mining machine. The pressure will be greater in summer, because the mining machine is sensitive to temperature, and heat dissipation becomes a problem when the temperature is high. As long as you are willing, you can learn everything else. Of course, it would be better to have a master to guide you.

For me, I am still in the mining industry and will stay in this industry.

03 Apeng: Entered the industry in 2017, "Replaced graphics card machine with professional mining machine, and invested while exploring"

Self-narration | Produced by Apeng | Blockchain in vernacular

I entered the industry and started mining in early 2017. At that time, I was just a small miner and got dozens of machines by myself. At first, I mined directly with graphics cards, and later I switched to professional mining machines.

Speaking of the entire mining experience, what impressed me most was the small currencies. At that time, the D3 and B3 mining machines I bought were both scammed because I placed an order in advance and bought them using futures, so I lost a lot of money when I got them.

Mining is actually equivalent to fixed investment, which is more stable than directly investing in cryptocurrencies. After all, as long as you have the green mountains, you will have a chance to survive.

If individual users or new users want to enter the mining market, joint mining is better. Other methods are not recommended, including cloud mining, because the cloud mining machines will be taken back after a certain period of time. If the investment is small, don't do it. It is not suitable for small households (less than 1,000 machines).

The most appropriate time to buy a mining machine is when the cycle is close to the end, so it is not cost-effective to buy a mining machine now. According to the cycle that the S7 mining machine has experienced before, the S9 mining machine will also have a cycle, and even now the S7 mining machine may still be valuable, as long as someone comes to repair it, it can still be mined when the halving cycle comes.

04 Julian: Entered the industry in 2018, "There are big profits and liquidations, and I will start after I am familiar with the cycle"

(The above is the graphics card mining machine assembled by Julian himself)

Julian
Produced by | Vernacular Blockchain

I learned about Bitcoin very early. My previous company was doing business abroad, and Bitcoin was used to facilitate money transfers. I invested in Bitcoin at that time, but I sold all of it before September 4, 2017, and missed the big market afterwards.

In 2018, I got into mining. However, it was already impossible to buy a few machines to mine at home at that time. Joint mining was the main choice for retail investors like me, so I paid for the machine and handed it over to the mining pool to manage it directly.

The mining machine I invested in lost nearly 70%. I bought an S9 mining machine for about 6,000 yuan, and then it dropped to 3,000 yuan. At that time, a company was liquidating, and one machine was 1,200 yuan. Since I didn't know much about the industry at that time, I chose to liquidate, but I didn't expect the market to improve later. After the market improved, I bought another mining machine not long after. Now I still have more than a dozen S9 mining machines and chose joint mining.

In the entire blockchain industry, my deepest impression was selling BTC around September 4, 2017, but in the mining process, my deepest impression was liquidating the mining machine in early 2019. Later, I realized that only after going through a whole bull-bear and mining cycle can you truly understand the mining industry.

For ordinary people, I think now is still the time to participate in mining, but building your own mine is not recommended. It is becoming increasingly difficult for small mines to be professional, well-publicized, etc., unless the amount of capital is particularly large.

05 Conclusion

Every industry has its own cycle, and the mining industry is no exception. After several rounds of bull and bear cycles and iterations of mining machines, the mining industry has grown from nothing to something, from wild growth to gradual standardization, scale, and specialization, and the threshold for participation has also become higher and higher.

The "Industrial Structure Adjustment Guidance Catalogue (2019 Edition)" issued by the state on November 6 showed that "virtual currency mining", which was in the phased-out industry, was deleted. For a time, the entire mining industry seemed to have ushered in a "policy spring".

As for how the mining industry will eventually develop, it remains to be tested by time. Those practitioners involved in mining will become witnesses and participants of this history.