Cryptocurrency "restart"? The big guys are back, mining machines are out of stock, and the capital market is ready to move...

After Bitcoin returned to $8,000, "Is the bull market coming" has become the hottest topic in the currency circle.

A "Letter to Users" drafted by Li Xiaolai made the outside world exclaim that the "big boss of the cryptocurrency circle" has returned to the battlefield.

The rise in the price of coins has driven up the price of second-hand mining machines. In the cryptocurrency community that has been silent for half a year, the "old leeks" have started to talk and laugh again. Bitcoin has become a hot topic on Weibo and has once again become a national topic.

But in addition, blockchain has once again become a hot concept for pyramid schemes and Ponzi schemes. The once unpopular air coins have also begun to rise with the big market.

The cryptocurrency world is a mixed bag of profit-seeking people. People can't help but ask whether the current market is a "small bull market" or a "leek-cutting operation" planned by people with ulterior motives.

01 The return of the “big boss”

"Li Xiaolai is back." This is undoubtedly the biggest news in the cryptocurrency world in the past week.

On May 14, some Yunbi users revealed that they had received an email signed by Li Xiaolai. In the email, Li Xiaolai reviewed his developments after founding Yunbi and invited users to join his newly founded investment research community "B.Watch".

Li Xiaolai set a capital entry threshold of 500,000 yuan for B.Watch. In addition, he also stated in the letter that he would screen community users in a "100% dictatorial" manner - "I will decide who can come in and who must leave."

This was seen by the outside world as Li Xiaolai's return to the cryptocurrency circle.

In September 2018, Li Xiaolai wrote on Weibo that he would no longer invest in any projects, including blockchain, and was "prepared to spend a few years seriously changing careers."

Subsequently, a Hong Kong-listed company, Xiong'an Technology, issued an announcement announcing that Li Xiaolai would serve as a director of the company to engage in blockchain-related research. Prior to this, the company's main business was contracting real estate construction and decoration.

In March this year, Xiong'an Technology announced its entry into the industrial hemp market. Some media joked that "Li Xiaolai went to grow hemp."

In fact, Li Xiaolai's name has long been deeply associated with Bitcoin. When searching for "Li Xiaolai" on Baidu, the most relevant search result is "How much is one Bitcoin equal to in RMB?"

No one believed that Xiong'an Technology would be Li Xiaolai's final destination. His ambition to return to the cryptocurrency world had already shown signs.

On May 7, Bitcoin finally returned to the $6,000 mark after half a year. One day later, Xiong'an Technology issued an announcement, announcing that Li Xiaolai had resigned from the company's board of directors because he "hoped to devote more time to cutting-edge research in the blockchain field."

Li Xiaolai is not the only "big shot" to return to the cryptocurrency circle.

On May 12, Bao Erye, F2Pool founder Shenyu, Bixin founder Wu Gang, Bitcoin China founder Yang Linke and other early Chinese Bitcoin players announced the establishment of a consensus community called "One Person, One Coin". This organization calls on Bitcoin holders to jointly promote "consensus".

Among them, Yang Linke, the founder of China's first-generation Bitcoin exchange, Bitcoin China, has disappeared from the scene for a long time.

In January 2018, Bitcoin China released an announcement, announcing that the company had been wholly acquired by a Hong Kong blockchain investment fund, and the four major shareholders, including Yang Linke himself, all cashed out and left.

But just one year later, Yang Linke announced again that he had completed the acquisition of 100% of the shares of Bitcoin China, and the new company will "use blockchain technology to serve the real economy."

Yang Linke sold the company at the historical high of Bitcoin and bought it back at the low. Some blockchain practitioners joked that it turns out that the company can also "sell high and buy low".

The earliest batch of Chinese Bitcoin players are all ready to make a comeback, while many "bigwigs" who entered the blockchain industry around the New Year of 2018 have remained silent so far.

Xu Xiaoping, who once shouted that "those who follow the blockchain will prosper, and those who go against it will perish", quietly deleted all Weibo posts related to the blockchain as early as November last year, apparently wanting to say goodbye to this "dark history."

After experiencing the "MeChain BEC" incident, Cai Wensheng also disappeared from the blockchain world.

Xue Manzi, an investment tycoon who was one of the first to make a fortune in the ICO wave, has recently appeared frequently in the Southeast Asian real estate market, gradually drifting away from blockchain.

“Just like the newbies in the cryptocurrency circle, the ‘big guys’ entered the market at different times and their position building costs are also different.” A cryptocurrency investor joked, “The ‘big guys’ who just entered the market last year have not yet been untied and are reluctant to come back.”

02 Ready to make a move

Also ready to move are the miners who keep the digital currency network running.

"The second-hand mining machine market has gone crazy," Chen Gang, a Bitcoin miner, told Yiben Blockchain. "Compared to a month ago, the current price of mining machines has almost doubled."

In his opinion, the rise in mining machine prices is related to the arrival of the flood season, but the main reason is still the recent rise in currency prices.

"The electricity cost of the Antminer S9, a representative of the previous generation of mining machines, is now only 32% of the price of the coin," said Chen Gang. "As the price of the coin rises, the old mining machines can continue to run, and the prices of second-hand mining machines will definitely rise as well."

The rise in the price of coins has also driven more big money to enter the mining market. According to Chen Gang, all the new mining machines from manufacturers such as Ant, Avalon, and Shenma have been bought by large mining farms with strong financial resources, and small miners can basically only choose second-hand mining machines of the previous generation.

Bitmain’s official website shows that the earliest delivery time for its latest Antminer S17 is already scheduled for August this year.

In addition to the miners who are eager to move, the rise in coin prices has also prompted cryptocurrency investors to start looking for new opportunities.

"My current mood seems to have returned to the end of 2017. At that time, I had no intention of working and just wanted to watch the market. It was too exciting." Digital currency investor Zhang Yang told Yiben Blockchain.

He described the mood of current cryptocurrency players like this: "When the price goes up, I slap my thighs for not getting on the train. When it goes down, I don't dare to get on the train. When it rebounds, I slap my thighs again. When it falls, I am afraid again."

After breaking through the $8,000 mark again, the price of Bitcoin has risen by more than 120% in 2019. Some foreign media said that Bitcoin has become the best performing asset this year. Investors who have been trapped in the bear market for a year have begun to spread the news.

Zhang Yang, who is in many cryptocurrency exchange groups, joked that his group chat records in the past month have surpassed the total of the past six months. "Even WeChat friend requests, there are dozens of them every day," he joked.

The rising popularity of Bitcoin is also reflected in the Baidu Index. In the past 30 days, the average number of Bitcoin searches was 34,831, up 63% from the previous month. On May 14, the number of Bitcoin searches reached a recent peak of 111,783.

On social networks, the attention paid to Bitcoin is also increasing. Within a week, "Bitcoin rises above $8,000" and "Bitcoin crash" were successively searched on Weibo, attracting widespread attention.

Well-known media personality Wang Zhian posted on Weibo on May 19, saying, "Bitcoin is a casino and has no intrinsic value." In the comment section of this Weibo post, two groups of people argued endlessly about this.

In any case, Bitcoin is returning to the public eye.

03 Resurgence

With the rise in currency prices, many long-dormant "pseudo-blockchain projects" have once again come back to life.

"SSP is one of them. This project is a complete air coin." Zeng Hong, a blockchain practitioner who asked to use a pseudonym, told Yiben Blockchain.

Public information shows that SSP, the full name of which is Smartshare, is a "decentralized value chain based on the Internet of Things industry." According to Zeng Hong, the project was launched in the first half of last year, and the price has been falling since then. At the end of 2018, the project was almost disbanded.

However, in 2019, the SSP team made another effort and announced cooperation with a number of smart hardware manufacturers to launch products such as sports bracelets and electric toothbrushes, and will soon hold roadshows in Southeast Asia and other places.

In recent days, the price of SSP has also been rising. According to Feixiaohao data, the increase of SSP in the past 7 days is as high as 211.63%.

But in Zeng Hong's opinion, as an IoT public chain project, SSP's implementation method only stays at the level of cooperating with hardware brands for mining, which is a forced "grafting" of the blockchain concept. And their marketing method is also very poor - advertising on the Nasdaq big screen that WeChat merchants are keen on.

"The SSP team itself has problems. The current CEO was fired by his former company, Procter & Gamble, for embezzling public funds," Zeng Hong said. "They harvested a wave of leeks last year, and this year they saw the market was coming, so they were ready to harvest another wave."

The good market has made the traders of air coins and pyramid scheme coins eager to make a move. The Ponzi scheme projects in the cryptocurrency circle have also started a new round of rise.

Recently, VDS, the most popular pyramid scheme coin in the cryptocurrency circle, has achieved a 40-fold increase. Its unique "resonance mode" has also begun to be imitated and borrowed by many pyramid scheme coins.

"The so-called 'resonance mode' is actually very simple, which is to use Bitcoin to buy VDS from the VDS wallet in a one-way manner." Digital currency player Chen Kang told Yiben Blockchain.

If users want to obtain VDS, they must first transfer Bitcoin to the VDS "resonance pool" before they can get VDS. In terms of the exchange rate, VDS is no different from other Ponzi schemes - the earlier you participate, the lower the cost.

The earliest participating users can exchange 1 Bitcoin for 3756 VDS. As time goes by, the exchange ratio of users will decrease until it reaches 1:1.

The bitcoins in the resonance pool will be returned to the participants as "rewards". In addition, each participant can also establish a multi-level rebate mechanism of up to 12 layers by recruiting others.

High returns, multi-level rebates...VDS is a typical Ponzi scheme.

According to statistics from VDS participants, there are more than 30,000 bitcoins in the VDS resonance pool. In addition, more and more capital traders are beginning to imitate the VDS model, intending to harvest more leeks.

While others are still trying to make a move, the blockchain funds have already made a fortune.

The return of bigwigs such as Li Xiaolai seems to confirm the arrival of a "bull market".

Investors, project owners, miners and even Ponzi schemes are all starting to get excited.

It remains to be seen where this "bull market" will eventually go, but those with ulterior motives have already set up a trap.

The sound of the sickle rubbing against each other could be heard faintly.

*Some of the interviewees in this article are pseudonyms.