Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

On August 30, the Odaily Planet Daily Link O-link City Summit was successfully held in Chengdu. The event attracted OKEx Mining Pool, Computing Earth, Altonomy, Bitmain, Conflux, DDEX, ExShell, KuCoin, Matrixport, Nuls, and Fish Pool to deliver keynote speeches and roundtable discussions.

Chengdu is recognized as the mining capital in the industry. However, this year is the coldest year for the mining industry. From the postponement of the flood season to the tightening of supervision, the mining industry has gone through six years. Under the long-term sideways market of the cryptocurrency market, where should the mining pools, mining farms and mining machine manufacturers with complete business models go next?

After several rounds of bull and bear baptism, we have ushered in a transition period from grassroots to professionalization, and the blockchain industry is gradually maturing. For example, the launch of the Libra white paper by Facebook has caused a group of institutions in traditional fields to begin to pay attention to the field of digital currency, indirectly prompting the digital currency market to enter a bull market. With the recent sideways trend of the big cake and the entry of institutions, the demand for asset preservation and appreciation has become increasingly strong.

At the event that day, hundreds of spectators gathered together with project parties from public chains, mining, exchanges, asset management and other fields to discuss topics such as mining upgrades, emerging asset management businesses, and the industry's next new opportunity, Staking, and DeFi.

Mining upgrade, where is the next growth point?

Mining is an upstream link in the digital currency industry, and competition in this field is currently entering a white-hot stage.

After the digital currency industry entered the bull market, the price of coins rose, and the payback period of mining machines was greatly shortened. The profit effect of mining, the upstream link, is getting better and better, and more and more funds are pouring into this field.

The standard consensus has proposed that the centralization of computing power has become a trend in the mining industry. The mining industry is moving towards scale and entering the era of large mining farms and cloud mining.

Mining originated from PoW, but PoW mining is also facing opportunities and challenges. The most intuitive industry phenomenon is that the mining income of Bitcoin far exceeds that of other currencies.

Coin Metrics data shows that Bitcoin mining revenue has hit a record high, breaking through $14 billion. Although the growth of Bitcoin's hash rate has led to increased mining difficulty and reduced mining profits, miners' income is still higher than ever before.

There are also data showing that as of July 2019, Bitcoin miners have generated an average annual revenue of more than 6 billion US dollars.

F2Pool is an old company among many mining pools. F2Pool CMO Li Qingfei also shared a set of data about PoW mining in his speech.

Data shows that among all PoW mining, the annual output value of PoW mining is currently around 56 billion. The top four currencies BTC, ETH, LTC, and BCH account for almost 90% of the annual output value of PoW, of which Bitcoin accounts for 79%.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Centralization is another challenge facing PoW.

Conflux Business Technology Director Shang Shu also talked about his understanding of resource centralization and head-to-head concentration in his keynote speech.

"In the blockchain technology revolution, the biggest code for wealth is to return to the original intention, such as what Satoshi Nakamoto repeatedly emphasized in the peer-to-peer payment system in 2008 that there is no need for a trusted third party." Shangshu believes that many changes are taking place in the industry, and some resources are beginning to concentrate on the top, including minerals. As the Matthew effect becomes more and more obvious, the original intention that began in 2008 is slowly lost.

Therefore, Conflux wants to make some changes to the existing mining environment to reduce the Matthew effect in the mining industry.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Although the difficulty of mining continues to increase, mining income is growing at a higher rate. The money-making effect of mining income is beginning to attract more and more financial resources to invest in this track.

Coin Metrics has predicted that the growth rate of mining revenue has slowed down, and based on current trends, it is expected to exceed $15 billion in early 2020.

Fan Xiaojun, head of sales for Bitmain in Asia Pacific, is also optimistic about the future of the mining industry. He believes that more and more people will engage in mining in the future, and there will be many new forms of mining, such as physical mining, cloud computing models, etc. The mining industry will get better and better in the future.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Bitcoin's position as the big brother is difficult to shake, and at the same time, the large amount of energy consumption caused by mining has been constantly criticized. Mining pools, mining farms and mining machine manufacturers that already have a complete business model are also looking for their own way out. At present, various innovative ways of playing have emerged in the mining industry, and people have begun to explore new growth points for the mining track.

Under the consensus mechanism of Bitcoin, computing power can only be used for mining. However, BOINC wants to prove the consensus mechanism through value calculation and use computing power to support scientific research.

Simply put, the new approach proposed by BOINC is to provide the idle computing power of a large number of personal computers and smart devices around the world to researchers running computing-intensive applications, thereby optimizing the efficiency of computing resource allocation and promoting scientific progress.

"The whole world is currently moving towards edge computing, and the blockchain industry is looking for new ways to form a complete closed loop and repurchase by creating profits." Lu Zi, co-founder of BOINC, said in his keynote speech that when the era of edge computing arrives, the commercialization of distributed computing has become more possible, but before that, for cloud computing companies, distributed computing was difficult to be used on a large scale.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Staking and DeFi are booming

Mining is upgrading and the PoS era is coming.

Staking economy is one of the hottest topics in the cryptocurrency circle in 2019. The weakening of the money-making effect in the spot market has led many investors to believe that Staking, the pledge mining model proposed by PoS, is a reliable way to obtain sustainable returns.

Previously, some media predicted that the value of the Staking market will exceed US$54 billion in 2020, reaching 16.2% of the entire digital cryptocurrency market.

As the staking model becomes increasingly popular, the industry trend has changed and PoS mining has become a new business.

As an emerging mining pool, OKEx Mining Pool has recently launched its own PoS mining business. Currently, OKEx Mining Pool supports both PoW and PoS/DPoS mining. It not only comprehensively deploys Staking mining business and launches locked mining products, but also deeply cultivates the ecology of PoS project community nodes.

However, Staking is still in its early stages. Alina, head of the OKEx mining pool, shared the five major difficulties currently facing Staking in her speech: the game between staking coins and falling coin prices, the security of pledged assets, the risk of intensified competition, the credit risk of service providers, and legal compliance risks.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Johnny Lyu, co-founder and vice president of KuCoin, as an exchange practitioner, sees a gap in the current Staking track. He believes that traders are making a trade-off between trading and Staking. Johnny Lyu believes that exchanges, as a bridge connecting projects and investors, have a natural advantage in providing Staking services.

The goal of the Soft Staking service currently launched by KuCoin is to help users balance trading and staking.

Soft Staking is a centralized staking system that dynamically adjusts the staking ratio. It strives to maximize the benefits for users without affecting user withdrawals. The benefits generated by staking are distributed to coin holders in proportion.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Ran Xiaobo, co-founder and community leader of Nuls, also saw similar market bottlenecks. In his sharing, he also introduced a way of issuing on-chain assets that balances the relationship between projects and investors - SCO. In this model, participants use PoS public chain assets as mining machines to mine a variety of other digital assets, and the corresponding project parties receive the staking income of the public chain.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

The new market environment since the beginning of this year has shown that high-quality projects are becoming increasingly scarce.

ExShell managing partner Lu Chao also admitted that there have been too few excellent projects this year, and investors’ investable targets have decreased, which indirectly led to the continuous increase in the market value of Bitcoin.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

In the previous development waves of the blockchain industry, several of the most influential applications were related to financial scenarios. Therefore, the decentralized financial applications brought by DeFi are also favored by many practitioners and are called the main theme of the next bull market.

Zhang Rui, head of strategy at Altonomy, believes that privacy coins, Ethereum, and DeFi are three areas worth paying attention to in the future blockchain track.

He further explained that privacy-related public chain projects and currencies are technologies worth looking forward to in 2019; the Ethereum ecosystem is tenacious and has strong support. For example, the transfer of USDT to Ethereum means that USDT has handed over all of its security attributes to Ethereum, which is an injection of Ethereum's value; after the prosperity of the Ethereum ecosystem, DeFi will have a broader development space in the future.

Bowen, head of operations at DDEX, believes that DeFi has three major advantages: open source connectivity, accessibility, and data transparency.

"Open source helps achieve a holistic effect across all projects, allowing people to understand how all products are woven together on a technical level; DeFi is working to create a financial system that is accessible to anyone, building a world where value flows freely; DeFi makes financial services transparent to all participants while still retaining personal privacy," said Bowen.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Data shows that the DeFi market has reached 1.2 billion US dollars.

Tao Quming, founder and CEO of AXONOMY, has been increasingly optimistic about the DeFi track. He believes that the DeFi market may grow a hundredfold in the next 3 to 5 years, and many applications that truly create value will be born in DeFi.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Serving high net worth individuals, asset management is a new business

Different from the earliest pure mining HODLers, the miners are also evolving. Many miners have evolved into high-net-worth individuals and institutions with many demands for diversified financial services.

Of course, the newly added high-net-worth group is not just the miners, but also the institutions that have entered the market in large numbers this year.

Wu Mengxia, senior vice president of Matrixport, shared two data: First, by using public data to measure the trading situation of the current mainstream trading service platforms, it was found that more than 60% of the trading volume was contributed by professional investors; second, the volume of over-the-counter transactions (mainly US dollars) has grown very rapidly this year. The current daily trading volume is estimated to be between 5 billion and 10 billion US dollars, and the clients of over-the-counter transactions are mainly institutions.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

"It is expected that the weight of institutional investors will further increase in the encrypted digital asset market." Wu Mengxia said that the entry of institutions means that the market is maturing. In the early stage of the market, a wave of retail investors will gather. The entry of institutions proves the profitability sustainability of this new investment asset. The entry of institutions is the dawn of the bull market.

Faced with the fluctuations in the digital currency market, high-net-worth individuals have a stronger demand for asset preservation and appreciation. At this time, asset management solutions that serve this type of high-net-worth individuals become very important.

When Alina, head of the OKEx mining pool, talked about the way out for the OKEx mining pool, she believed that the mining pool should develop into a digital encrypted asset management company in the future.

Is the mining industry's dividend over? We had an in-depth discussion with more than a dozen high-quality projects in Chengdu, the mining capital.

Alina further introduced that OKEx Mining Pool has advantages in three aspects: digital currency assets, digital configuration portfolio of high-quality assets, and smart investment advisory model. In the future, in enriching the digital asset configuration portfolio of high-quality assets, there will be not only currencies with PoS mechanism, but also currencies such as ERC20. In addition, in the smart investment advisory model, OKEx Mining Pool also hopes to directly check for users and provide high-quality assets and services.