Bitcoin mines are "sealed", but these 10 mines with annual revenue of millions are rising rapidly

In 2018, Bitcoin plummeted by more than 70%, and its market value evaporated by nearly 2 trillion yuan. Today, the mining income of most miners has long been unable to cover the electricity bill, and the mining farms in the cryptocurrency circle are in a mess.

In Xinjiang, most of the local Bitcoin mines are struggling on the line of life and death. The price of Bitcoin fell for a whole year last year, causing many mines to reach the "shutdown price", that is, the mining income is not enough to pay for electricity and management fees. According to a report by CoinShares, a crypto asset research company, a large number of Bitcoin mines have left China and moved to Scandinavia, Russia, Canada and the United States, looking for places with cheap electricity, abundant power supply, friendly regulatory policies, fast Internet access and cold weather to set up mines.

However, there is a "digital mine" in Xinjiang called Star Domain Cloud Storage, which is rising rapidly against the trend and is likely to become one of the hottest entrepreneurial projects in China this year.

Unlike traditional mining farms, Xingyu Cloud Storage does not engage in digital currency speculation. It is a new type of mining farm that carries the heavy responsibility of the 5G new infrastructure project. However, its profitability has far exceeded that of local digital currency mines of the same size. According to people familiar with the matter, Xingyu Cloud Storage currently has 3,000 devices deployed, with a daily income of over 10,000 yuan.

Why are there such big differences between the two mines? What exactly is Star Domain Cloud Storage “mining” to get such a high return?

Stay away from digital currency and focus on new infrastructure

The strategy behind the rapid growth of Star Domain Cloud Storage is simple: stay away from digital currency and focus on new infrastructure business.

Last September, Xinjiang began to completely clear out Bitcoin mining farms, dealing a heavy blow to the industry. One of the reasons the government took this action was that “besides consuming a lot of electricity, these operations have made no contribution to the region’s economy.”

In sharp contrast, Xingyu Cloud Storage has received attention from the government. Shortly after the opening of this year, the leaders of the Xinjiang Autonomous Region went to inspect it, sending an encouraging signal.

This is because Xingyu Cloud Storage is not any kind of digital currency mining farm. It actually operates a distributed CDN business, which essentially belongs to the category of 5G new infrastructure. The equipment deployed in the mining farm is not a mining machine, but a smart hardware called "Xiaorong Box", which acts as a micro node to provide CDN services for the Internet.

Actual photo of a large-scale small-scale mine

Thanks to more than a decade of rapid development, China's current Internet industry has a huge demand for computing resources including CDN. Compared with traditional centralized computer rooms, the Xiaorong Box operated by Xingyu Cloud Storage has obvious advantages. First, it does not need to build large servers, saving high construction costs; second, it adopts the principle of nearby transmission, with low physical loss, so the cost is low and the effect is better. It is very popular among large traffic consumers such as Alibaba, Tencent, Toutiao and video platforms.

In the upcoming 5G era, this distributed CDN node will play a greater role. Industry experts say that in edge computing, which is an important application direction of 5G, distributed micro nodes such as Xiaorong Box can give full play to the advantages of edge computing and deliver higher-quality content sources to C-end users with lower transmission latency.

On the one hand, there is a huge demand, and on the other hand, there is a lower cost. Therefore, Xiaorong Box can smoothly run its business model and help mining farms like Xingyu Cloud Storage to continuously obtain income. At present, the daily income of a single Xiaorong Box is 3-4 yuan. Based on this calculation, 10,000 boxes can earn about 900,000 yuan per month for the mining farm. After deducting operation and maintenance costs, investment share, hardware depreciation, etc., the net income is at least in the range of 300,000 to 500,000 yuan.

Actual photo of the revenue of a single device of a small mine owner

Investing in the real economy to test the new 5G trend

Mining farms like Xingyu Cloud Storage are emerging all over the country. In Shanghai, there is a mining farm called "3699" that has more than 10,000 Xiaorong online. In Jiangsu, a mining farm called "Jiangsu Suzhong" has a 1.3T provincial dry port and can accommodate 40,000 boxes.

One thing these mine owners have in common is that more than 80% of them have transformed from traditional Bitcoin mines or other machine mines. For example, the founder of the mine "3699" was previously a well-known Bitcoin miner in Shanghai, and most of the others have similar identities. Some of them once owned four Bitcoin mines and invested in a photovoltaic power station and two transformer stations.

There are two reasons why they gave up Bitcoin and other digital currencies and turned to cloud computing mining farms such as Xiaorong Box. The first is that Bitcoin mining farms are difficult to sustain, with low prices, strict policies, and more importantly, it is difficult to find electricity. It was previously reported that the Bitcoin mining farm in Shihezi City, Xinjiang, consumes 500 million kilowatt-hours of electricity per month, which can be used by 100 million households across the country for one day.

On the other hand, they are tired of the speculative game of digital currency, the ups and downs of the currency price, and the industry is full of speculation and fraud, which makes people exhausted. Xiaorong Box is essentially a physical project, a kind of 5G new infrastructure, and its income is cash. Although it will not make people rich overnight like Bitcoin did in the past, it is stable and lasting, and it is a predictable income.

Some people have more far-reaching considerations - they choose Xiaorong to test the waters of the 5G industry. "5G is already a general trend," said a miner who has transformed. "If you enter 5G now, you will at least have a first-mover advantage and a greater chance of finding gold in the future."

Another mining owner who is optimistic about the transformation of CDN business in the 5G era said, "In theory, CDN business in the future can solve the problem of the last mile. It is a distributed business. What we are doing now is distributed CDN nodes. This is the most basic job and the most difficult job, but it is also the safest job because it conforms to the development trend of the industry."

Digital mining was once considered an industry with equally huge risks and rewards. However, since the Bitcoin craze faded, the future of digital mining has become a heavy reality. The mining story described in this article can be regarded as an answer to this question. Saying goodbye to speculation, getting rich quickly and fraud, and returning to the stability, sustainability and value creation of the real economy may be the best way out for digital mining.

This article is for commercial promotion only and does not represent the position of Wabi.com. Cryptocurrency is a high-risk industry. Please invest with caution. We are not responsible for any losses!