Mining Market Revenue Report in October 2019

Mining Market Revenue Report in October 2019

Key points of this report:

• Preface

• Coin price: The average price of the top ten mining coins increased by 14.57%

• Total network computing power: an average decrease of 3.30%, BSV computing power rebounded 44.3%

• Unit computing power income: The average daily income of the top ten currencies increased by 16.28%

• Mining machine cost: ASIC mining machine prices fell by an average of 4.8%; graphics card prices remained basically stable

• Mining revenue analysis: The payback period of mining machines is shortened by 23% on average

• 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 incremental funds entering the 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.

With the rise in cryptocurrency prices, the profitability of mining has increased significantly compared to the beginning of the year, and the mining industry has fully recovered. Canaan Creative, a leading mining machine manufacturer, has now completed its pre-roadshow and is expected to be listed on Nasdaq in the near future. The current shortage of mining machine supply still exists. With the successive delivery of previous mining machine orders, the computing power has generally maintained an upward fluctuation. The entry of high-performance, high-computing-power mining machines has caused some high-energy-consumption-ratio computing power to gradually withdraw, and the price of graphics cards on the demand side has been weakened by the impact of the miner group.

2. Currency price: The average price of the top ten mining currencies increased by 14.57%

In October, the market showed a U-shaped reversal. At the beginning of the month, the market continued to fluctuate in a box around US$225 billion. On the 23rd, it fell step by step to around US$205 billion and stabilized. At the end of the month, stimulated by favorable domestic policies, the market broke through the integer thresholds of US$220 billion, US$240 billion, and US$260 billion, once touching US$260.3 billion, and then corrected to close at around US$245 billion. Since the end of October, when it rose sharply due to good news, improved market expectations and better liquidity have given Bitcoin a certain bottoming support, but the market volume has continued to be sluggish recently, investor sentiment has remained cautious, off-market funds have generally maintained a wait-and-see attitude, and the market has generally tended to adjust in a weak direction.

Figure 1 Market trends in the past three months

Source: CoinMarketCap, TokenMania

Figure 2: Price fluctuations of mainstream mining currencies this month

Source: CoinMarketCap, TokenMania

Boosted by the overall market, the prices of the top ten mining currencies all rose this month, with an average price increase of 14.57%. BSV's price increase ranked first, up 52.40%, while BCH, DCR, and BTC prices rose by 25.07%, 24.57%, and 13.09%, respectively. Generally speaking, rising coin prices will shorten the payback period for mining machines.

3. Total network computing power: an average decrease of 3.30%, BSV computing power rebounded by 44.3%

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 decrease of 3.30%. Among the top ten mining currencies, the hashrate of 4 currencies increased, among which BSV's hashrate rebounded the most, with an increase of 44.30%. In addition, BCH increased by 9.94%, DASH increased by 7.91%, and ETC increased by 4.47%. The hashrate of 6 currencies showed negative growth this month, among which LTC, ZEC, and DCR fell the most, down 34.88%, 24.21%, and 21.58% respectively. The hashrate of BTC, XMR, and ETH also fell slightly this month, but they are still at recent highs.

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 currencies increased by 16.28%

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 income per unit of computing power of the top ten mining coins this month has basically increased, and the daily income per unit of computing power has increased by an average of 16.28% compared with the previous month. Among the top ten mining coins this month, the daily income per unit of computing power of 7 coins has increased. Affected by the sharp drop in computing power, the increase in the unit computing power income of LTC this month ranks first, at 53.45%, followed by DCR, with an increase of 49.77%. In addition, ZEC increased by 31.01%, BCH increased by 17.86%, and the daily income per unit of computing power of BTC, XMR and ETC also increased slightly; only 3 coins have decreased their daily income per unit of computing power this month, including DASH, which fell by 8.29%, BSV, which fell by 1.61%, and ETH, which fell by 0.65%.

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. Among the top ten mainstream mining currencies, only XMR does not have an ASIC mining machine. Although ETH and ETC have ASIC mining machines, their advantages over graphics card mining machines are not obvious. The rest of the currencies have been occupied by ASIC mining machines.

Table 3 Mainstream mining currency encryption algorithms

Source: TokenMania

5.1 ASIC mining machine: the average price of mining machines fell by 4.8%

According to the statistical survey of data in early November 2019, the price of mining machines this month has slightly decreased compared with last month. Among the Canaan Creative mining machines, the price of low-computing power models has remained basically unchanged, and the price of high-computing power models has slightly decreased, with an average price change of -2.80%; the adjustment of Bitmain mining machine spot prices is similar, with an average change of -11.63%, and the spot price of Ebang International mining machines is basically the same as last month. Due to the drastic changes in the supply and demand relationship of mining machines and the great impact of market fluctuations, price statistics are for reference only.

Table 4 Price changes of mainstream ASIC mining machines

Source: Bitmain, Avalonminer, Ebit, TokenMania

5.2. Graphics card prices: basically stable

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 impact of miners on graphics card prices on the demand side has weakened. The prices of eight sample graphics cards this month have remained basically stable, with only two showing a downward trend. The average price has dropped by 4.46%; among them, Nvidia's GTX1070Ti price has dropped by about -22.64%, AMD's RX580 price has dropped by 13%, and the prices of other graphics cards have remained unchanged.

6. Mining revenue analysis: The payback period of mining machines is shortened by 23% on average

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 BTC and BSV is similar, and the payback period of BCH is relatively short. The seven mining machines with the shortest payback period are: Antminer S9K-14T (197 days, for BCH), Antminer Z11 (245 days, for ZEC), Avalon 1047 (287 days, for BCH), Avalon 1066 (321 days, for BCH), Antminer T17E 53T (328 days, for BCH), Antminer S17E 64T (341 days, for BCH), and Antminer T1740T (346 days, for BCH).

Among the sample mining machines, the seven mining machines with a longer payback period and tending to be shut down are: Ant L3+ (shutdown, for LTC), Ant D5119G (shutdown, for DASH), 1060 (6G) 6 cards (1960 days, for ETH), Wingbit E10.1 (1725 days, for BCH), Wingbit E10.3 (1456 days, for BCH), RX5806 cards (1090 days, for ETH), and Wingbit E10.2 (1013 days, for BCH).

In addition, among the sample BTC mining machines, the five mining machines with the shortest payback period this month are: Ant S9K-14T (197 days), Avalon 1047 (287 days), Avalon 1066 (321 days), Ant T17E 53T (328 days), and Ant S17E 64T (341 days); the five mining machines with the longest payback period of the sample BTC mining machines are: Ebit E10.1 (1725 days, for BCH), Ebit E10.3 (1456 days, for BCH), Ebit E10.2 (1013 days, for BCH), Avalon A851S (706 days, for BCH), and Ant S9 Hydro (595 days, for BCH).

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 this month's sample mining machines is 23% shorter than last month on average, and the payback period of high-computing power models this month is basically around 300 days. On the other hand, the payback period of graphics card mining machines in this month's sample graphics card mining machines is more than 1,000 days. Currently, 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. The payback period of each currency is generally shortened this month, with BCH payback time of about 200 days; BTC and BSV payback time of about 250 days; LTC and DASH coin mining machine samples are small, and the price error is large. As the LTC mining output is halved and the coin price drops, the payback period of the sample mining machine is significantly extended.

6. Conclusion

With the rise in cryptocurrency prices, the profitability of mining has increased significantly compared to the beginning of the year, and the mining industry has fully recovered. Canaan Creative, a leading mining machine manufacturer, has now completed its pre-roadshow and is expected to be listed on the Nasdaq this month. The current shortage of mining machine supply still exists. With the successive delivery of previous mining machine orders, the computing power has generally maintained an upward fluctuation. The entry of high-performance, high-computing-power mining machines has caused some high-energy-consumption-ratio computing power to gradually withdraw, and the impact of the miner group on the demand side on graphics card prices has weakened.

In addition, according to the "Guidelines for Industrial Structure Adjustment (2019 Edition)" released by the National Development and Reform Commission in November, the "virtual currency 'mining' activities" listed as "eliminable" in the previous draft for comments have been deleted; the eliminated industries mainly refer to backward processes, technologies, equipment and products that do not meet the conditions for safe production, seriously waste resources, and need to be eliminated. Removing them from the list of "eliminable industries" will have a positive impact on the long-term development of the mining industry ecosystem.

Currency price: The price of the top ten mining currencies rose by an average of 14.57%. In October, the market experienced a U-shaped reversal. At the beginning of the month, the market continued to fluctuate around 225 billion US dollars. On the 23rd, it fell step by step to around 205 billion US dollars and stabilized. At the end of the month, stimulated by favorable domestic policies, the market broke through the integers of 220 billion, 240 billion, and 260 billion US dollars, once reaching 260.3 billion US dollars, and then closed at around 245 billion US dollars. Since the end of October, after the volume rose due to good news, the market expectations improved and the better liquidity gave Bitcoin a certain bottoming support, but the market volume has continued to be sluggish recently, investors remain cautious, and OTC funds generally maintain a wait-and-see attitude, and the market generally tends to adjust in a weak direction.

Boosted by the overall market, the prices of the top ten mining currencies all rose this month, with an average price increase of 14.57%. BSV's price increase ranked first, up 52.40%, while BCH, DCR, and BTC prices rose by 25.07%, 24.57%, and 13.09%, respectively. Generally speaking, rising coin prices will shorten the payback period for mining machines.

Total network computing power: The computing power of the top ten mining currencies fluctuated this month, with an average decrease of 3.30% . Among the top ten mining currencies this month, the computing power of 4 currencies increased, among which BSV computing power rebounded the most, with an increase of 44.30%. In addition, BCH increased by 9.94%, DASH increased by 7.91%, and ETC increased by 4.47%. This month, the computing power of 6 currencies showed negative growth, among which LTC, ZEC, and DCR fell the most, down 34.88%, 24.21%, and 21.58% respectively. The computing power of BTC, XMR, and ETH also fell slightly this month, but it is still at a recent high.

Unit computing power income: The average daily income of the top ten currencies increased by 16.28%. 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 increased, and the unit computing power daily income increased by an average of 16.28% compared with the previous month. Among the top ten mining currencies this month, 7 currencies have increased their unit computing power daily income. Affected by the sharp drop in computing power, LTC's unit computing power income increased the most this month, at 53.45%, followed by DCR, with an increase of 49.77%. In addition, ZEC increased by 31.01%, BCH increased by 17.86%, and BTC, XMR and ETC's unit computing power daily income also increased slightly; only 3 currencies' unit computing power daily income decreased this month, including DASH, which fell by 8.29%, BSV, which fell by 1.61%, and ETH, which fell by 0.65%.

ASIC mining machine: The price of mining machines fell by an average of 4.8%. According to the statistical survey of data in early November 2019, the price of mining machines this month fell slightly compared with last month. Among the Canaan Creative mining machines, the price of low-computing power models remained basically unchanged, and the price of high-computing power models dropped slightly, with an average price change of -2.80%; the adjustment of Bitmain mining machine spot prices was similar, with an average change of -11.63%, and the spot price of Ebang International mining machines was basically the same as last month. Due to the drastic changes in the supply and demand relationship of mining machines and the great impact of market fluctuations, price statistics are for reference only.

Graphics card prices are stable, with an average price change of -4.46%. The impact of miners on the demand side of graphics card prices has weakened. The prices of eight sample graphics cards this month are basically stable, with only two showing a downward trend, and the average price has dropped by 4.46%; among them, Nvidia's GTX1070Ti price has dropped by about -22.64%, AMD's RX580 price has dropped by 13%, and the prices of other graphics cards have remained the same.

Mining income analysis: This month, the payback period of mining machines has been shortened by 23% on average. The payback period of Bitcoin mining machines for BTC and BSV is similar, and the payback period of BCH is relatively short. The seven mining machines with the shortest payback period are: Antminer S9K-14T (197 days, for BCH), Antminer Z11 (245 days, for ZEC), Avalon 1047 (287 days, for BCH), Avalon 1066 (321 days, for BCH), Antminer T17E 53T (328 days, for BCH), Antminer S17E 64T (341 days, for BCH), Antminer T1740T (346 days, for BCH);

Among the sample mining machines, the seven mining machines with a longer payback period and tending to be shut down are: Ant L3+ (shutdown, for LTC), Ant D5119G (shutdown, for DASH), 1060 (6G) 6 cards (1960 days, for ETH), Wingbit E10.1 (1725 days, for BCH), Wingbit E10.3 (1456 days, for BCH), RX5806 cards (1090 days, for ETH), Wingbit E10.2 (1013 days, for BCH);

Overall, the payback period of BTC mining machines in this month's sample mining machines is 23% shorter than last month on average, and the payback period of high-computing power models this month is basically around 300 days. On the other hand, the payback period of graphics card mining machines in this month's sample graphics card mining machines is more than 1,000 days. Currently, the risk of purchasing a new graphics card mining machine is relatively high, and the overall payback period is still not optimistic.

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