TAMC Research Institute | Mining Market Revenue Report for March 2019

Mining Market Revenue Report for March 2019

Key points of this report:

• Preface

• Coin price: The overall market rose by 9.99%, and the average increase of the top ten mining coins was 9.1%

• Total network computing power: The computing power of the top ten mining currencies increased by an average of 5%, and the computing power growth trend slowed down

• Mining machine cost: The prices of the three major mining machine manufacturers remain stable, and the average price change of graphics cards is -1.5%

• Mining revenue analysis: The average daily revenue of the top ten mining currencies increased by 39%

• Summarize

Details of this report:

1. Introduction

This report provides mining revenues for mainstream POW mining currencies. There are three main factors that affect the payback period for miners: currency price, 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 potential large capital entering the mining market. When mining revenues continue to fail to cover their costs, a large number of miners will choose to shut down their mining machines, which will lead to "mining accidents".

The market rebound since the beginning of 2019 is more favorable to the mining industry. At the same time, the flood season from April to May is approaching. Cheap hydropower will reduce the electricity cost of mining and increase the income of miners. The increase in currency prices will help form a virtuous circle, and upstream mining-related industries will be deployed in advance.

2. Coin price: The overall market rose by 9.99% , and the average increase of the top ten mining coins was 9.1%

In March (March 1, 2019 - March 31, 2019), the total market value of global blockchain digital assets fluctuated in a narrow range in the early stage, and then rose steadily, and generally fluctuated between US$125 billion and US$140 billion; at the end of the month, it reached a new high of US$140 billion, once reaching US$148 billion, and Bitcoin also successfully broke through the US$4,100 mark. The closing price of the market in March was US$144.2 billion, an increase of US$13.1 billion from the opening price of US$131.1 billion, an increase of 9.99%. The rise of the market boosted market confidence, and the market trading sentiment rebounded. From the perspective of volume, the market's offensive is more aggressive, and the upward market space has been reopened .

Figure 1 Market trends in the past three months

Source: CoinMarketCap , TokenMania

Figure 2: Rise and fall of mainstream mining currencies in March

Source: CoinMarketCap , TokenMania

In March, the top ten mainstream mining currencies generally rose, with only BSV falling 1%. The average price increase of the top ten mining currencies was 9.1% , among which DASH price rose 36%, ranking first; among the top ten mining currencies, BCH, LTC, XMR, DASH, ETC, etc. outperformed the market, while BTC and ETH ranked last, with increases of 8% and 4% respectively. Generally speaking, the rise in currency prices will shorten the payback period of mining machines .

3. Total network computing power: The average increase of the top ten currencies’ computing power is 5 % , and the computing power growth trend is slowing down

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 in March

Source: Block Explorer, TokenMania

In March 2019, the overall growth of the top ten mining currencies slowed down, and the computing power of some currencies fell. This month, the computing power of six currencies, including DASH, LTC, and DCR, increased, among which DASH had the highest increase of 37%, followed by LTC, with a computing power increase of 34%. Litecoin will be the first to halve in August 2019 (9 months ahead of Bitcoin). The computing power of four of the top ten currencies fell, and XMR's computing power fell sharply by 69% this month. In addition, the computing power of BTC, ETC and ETH fell by 9%, 8% and 5% respectively. Overall, the total computing power of the top ten mining currencies increased by an average of 5% in March, which was 5 percentage points less than the previous month.

In addition, the Ethereum Constantinople and St. Petersburg upgrades were successfully completed in early March. This upgrade is of great significance to Ethereum's transition to the PoS algorithm. After the upgrade, the network operates normally, and the Ethereum block reward has been reduced from 3ETH to 2ETH. By reducing the block reward, the arrival of the difficulty bomb has been delayed; after the upgrade, the block reward has become less attractive to miners. Currently, Ethereum's computing power and nodes are both on a downward trend.

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. 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 3 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 2 Mainstream mining currency encryption algorithms

Source: TokenMania

4.1. ASIC Mining Machines: Prices of the three major mining machine manufacturers remain stable

In March 2019, the prices of the three major ASIC mining machine manufacturers, Bitmain, Canaan Creative, and Ebang International, remained basically stable , and the phenomenon of large-scale discount sales no longer appeared. In addition, Bitmain officially released a ZEC mining machine Z11 on March 19, with a rated computing power of 135Sol/s and a price of 11,200 yuan. At the same time, the price of Ebang International's Yibit mining machine has remained unchanged for seven consecutive months, making it a mining machine manufacturer with relatively strong prices in the bear market .

Table 3 Price changes of mainstream ASIC mining machines

Source: Bitmain , Avalonminer , Ebit , TokenMania

4.2. Graphics card prices: basically stable, average price change -1.5%

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. The current mainstream graphics cards are AMD 's RX series and NVIDIA 's GTX series graphics cards. Due to the large number of sales channels for graphics cards, prices in different regions will vary. The following is for reference only.

Figure 5 Price changes of various graphics cards in March

Source: Tmall, JD.com, Amazon, TokenMania

Figure 6 Graphics card price changes in the past six months

Source: Tmall, JD.com, Amazon, TokenMania

As the secondary market cools, the motivation for incremental miners to enter the market has declined, and the impact of miners on the demand side of graphics card prices has weakened. The decline in graphics card prices has also slowed down significantly in recent months. Among the eight graphics cards this month, the prices of AMD 's three mid-to-low-end graphics cards have not changed compared to February, and the prices of two mid-to-high-end graphics cards have dropped slightly, namely Vega56 ( -11 % ) and Vega ( -3% ). In addition, the prices of NVIDIA's three graphics cards have changed slightly, namely GTX1060 ( 1% ), GTX1070Ti ( -3% ) and GTX1080Ti ( 3% ). The average price change of the eight graphics cards is -1.5% .

5. Mining revenue analysis

5.1. Unit computing power income: The average daily income of the top ten currencies increased by 39%

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 4 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 1KSol/s , Dash is 1GHash/s , ETC is 1MHash/s , ZEC is 1KHash/s , and DCR is 1THash/s .

Figure 7 Changes in unit computing power income of mainstream mining currencies this month

Source: TokenMania

Affected by the changes in coin prices and computing power, the unit computing power income of the top ten mainstream mining coins this month, except DCR, has all increased, and the average unit computing power daily income of the top ten coins has increased by 39%. Among them, XMR was affected by the dual impact of a sharp drop in computing power of 69% and an increase in coin prices. Its unit computing power daily income increased by 273% compared with the same period last month, ranking first among all coins. The top four coins in terms of unit computing power daily income increase are XMR (273%), ETH (30%), BCH (23%), and ETC (21%) .

Figure 8: Changes in the unit computing power income of mainstream mining currencies in the past six months

Source: TokenMania

5.2. Mining machine payback period: The cryptocurrency market has recovered, and the mining payback period has been slightly shortened

As of the statistical date of the report in early April 2019 , based on the full network data of each currency, assuming that the electricity fee is uniformly 0.45 yuan, the static payback period of mining for each currency was calculated.

Table 5 Payback period of mainstream currency mining machines

Source: Public data, TokenMania

Figure 9 Comparison of the return on investment of mainstream currency mining machines in the past three months

Source: TokenMania

Affected by the general rise in the prices of mainstream mining currencies, the payback period of mining machines for major currencies has been slightly shortened this month. Only the payback period of mining machines for BSV, LTC and DCR has been slightly extended.

As for ASIC mining machines, Bitmain's S9 series mining machines have been declared dead. The payback period of the new mining machine S15 varies according to the currency being mined: BTC is 585 days, 12 days shorter than last month; BCH is 511 days, 526 days shorter than last month; BSV is 695 days, 94 days longer than last month. In addition, the payback period of the ZEC mining machine Z9 was shortened by 96 days to 241 days, the payback period of the DASH mining machine D5 this month was shortened by 236 days to 581 days compared with last month, the payback period of the LTC mining machine L3++ was extended by 57 days to 348 days, and the payback period of the DCR mining machine this month was slightly extended by 26 days to 405 days.

On the other hand, for graphics card mining machines, the payback period of XMR was halved after the unit computing power increased by 273% this month, but it still takes 1477 days. The payback period of ETH and ETC mining with 6-card RX570 mining machines was reduced by 33% and 18% to 838 days and 997 days respectively compared with last month. The payback period of graphics card mining is long and the risk is relatively high.

A horizontal comparison shows that the Z11 mining machine newly released by Bitmain in March has the shortest payback period of 85 days this month, followed by the ZEC mining machine Z9, the LTC mining machine L3++, and the DCR mining machine DR5, which are 241 days, 348 days, and 405 days respectively. The payback periods of other mining machines are generally longer.

[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. It does not take into account the changes in mining costs and electricity prices and is for reference only.

6. Summary

The market rebound since the beginning of 2019 is more favorable to the mining industry. At the same time, the flood season from April to May is approaching. Cheap hydropower will reduce the electricity cost of mining and increase the income of miners. The increase in currency prices will help form a virtuous circle, and upstream mining-related industries will be deployed in advance.

Currency price : In March (March 1, 2019 - March 31, 2019), the total market value of global blockchain digital assets fluctuated in a narrow range in the early stage, and then rose steadily, and generally fluctuated between US$125 billion and US$140 billion; at the end of the month, it reached a new high of US$140 billion, once reaching US$148 billion, and Bitcoin also successfully broke through the US$4,100 mark. The closing price of the market in March was US$144.2 billion, an increase of US$13.1 billion from the opening price of US$131.1 billion, an increase of 9.99%. The rise of the market boosted market confidence, and the market trading sentiment rebounded. From the perspective of volume, the market's offensive is more aggressive, and the upward market space has been reopened.

In March, the top ten mainstream mining currencies generally rose, with only BSV falling 1%. The average price increase of the top ten mining currencies was 9.1% , among which DASH price rose 36%, ranking first; among the top ten mining currencies, BCH, LTC, XMR, DASH, ETC, etc. outperformed the market, while BTC and ETH ranked last, with increases of 8% and 4% respectively. Generally speaking, the rise in currency prices will shorten the payback period of mining machines.

Total network computing power: In March 2019, the overall growth of the computing power of the top ten mining currencies slowed down, and the computing power of some currencies fell. This month, the computing power of six currencies, including DASH, LTC, and DCR, increased, among which DASH computing power increased the most, reaching 37%, followed by LTC, with a computing power increase of 34%. LTC will be the first to halve in August 2019 (9 months ahead of Bitcoin). The computing power of four of the top ten currencies has declined, and XMR's computing power has dropped sharply by 69% this month. In addition, BTC, ETC and ETH's computing power have dropped by 9%, 8% and 5% respectively. Overall, the total computing power of the top ten mining currencies increased by an average of 5% in March, a decrease of 5 percentage points from the previous month.

In addition, the Ethereum Constantinople and St. Petersburg upgrades were successfully completed in early March. This upgrade is of great significance to Ethereum's transition to the PoS algorithm. After the upgrade, the network operates normally, and the Ethereum block reward has been reduced from 3ETH to 2ETH. By reducing the block reward, the arrival of the difficulty bomb has been delayed; after the upgrade, the block reward has weakened its attractiveness to miners. Currently, Ethereum's computing power and nodes are both on a downward trend.

Mining machine cost: This month, the prices of mining machines of the three major ASIC mining machine manufacturers, Bitmain, Canaan Creative, and Ebang International, remained basically stable, and the phenomenon of large-scale discount sales no longer appeared. In addition, Bitmain officially released a ZEC mining machine Z11 on March 19, with a rated computing power of 135Sol/s and a price of 11,200 yuan. At the same time, the price of Ebang International's Yibit mining machine has remained unchanged for seven consecutive months, making it a mining machine manufacturer with relatively strong mining machine prices in the bear market.

Graphics card prices : As the secondary market cools, the motivation for incremental miners to enter the market has declined, and the impact of miners on the demand side of graphics card prices has weakened. The decline in graphics card prices has also slowed down significantly in recent months. Among the eight graphics cards this month, the prices of AMD's three mid-to-low-end graphics cards have not changed compared to February, and the prices of two mid-to-high-end graphics cards have dropped slightly, namely Vega56 (-11%) and Vega (-3%). In addition, the prices of three NVIDIA graphics cards have changed slightly, namely GTX1060 (1%), GTX1070Ti (-3%) and GTX1080Ti (3%). The average price change of the eight graphics cards is -1.5%.

Unit computing power income: Affected by the changes in currency prices and computing power, the unit computing power income of the top ten mainstream mining currencies this month, except DCR, has increased, and the average unit computing power daily income of the top ten currencies has increased by 39% . Among them, XMR was affected by the dual impact of a sharp drop in computing power of 69% and an increase in currency prices. Its unit computing power daily income increased by 273% compared with the same period last month, ranking first among all currencies. The top four currencies in terms of unit computing power daily income increase are XMR (273%), ETH (30%), BCH (23%), and ETC (21%).

Mining machine payback period: Affected by the general rise in the price of mainstream mining coins, the payback period of major currency mining machines has been shortened overall this month, and only the payback period of BSV, LTC and DCR mining machines has been slightly extended. Horizontal comparison shows that the Z11 mining machine newly released by Bitmain in March has the shortest payback period this month, which is 85 days; followed by ZEC mining machine Z9, LTC mining machine L3++, and DCR mining machine DR5, which are 241 days, 348 days, and 405 days respectively. The payback periods of other mining machines are generally longer.

As for ASIC mining machines, Bitmain's S9 series mining machines have been declared dead. The payback period of the new mining machine S15 varies according to the currency being mined: BTC is 585 days, 12 days shorter than last month; BCH is 511 days, 526 days shorter than last month; BSV is 695 days, 94 days longer than last month. In addition, the payback period of the ZEC mining machine Z9 was shortened by 96 days to 241 days, the payback period of the DASH mining machine D5 this month was shortened by 236 days to 581 days compared with last month, the payback period of the LTC mining machine L3++ was extended by 57 days to 348 days, and the payback period of the DCR mining machine this month was slightly extended by 26 days to 405 days.

As for graphics card mining machines, the payback period of XMR was halved after the unit computing power increased by 273% this month, but it still takes 1477 days. The payback period of ETH and ETC mining with 6 RX570 mining machines was reduced by 33% and 18% from last month to 838 days and 997 days respectively. The payback period of graphics card mining is long and the risk is relatively high.

Event: On April 8, 2019, the National Development and Reform Commission publicly solicited opinions on the "Guidelines for Industrial Structure Adjustment (2019 version, Draft for Comments)", and virtual currency "mining" activities were listed as eliminated industries; the catalogue consists of three categories: encouragement, restriction, and elimination. The elimination category mainly refers to backward processes, technologies, equipment and products that do not comply with relevant laws and regulations, do not have safe production conditions, seriously waste resources, pollute the environment, and need to be eliminated. This industrial adjustment catalogue is a draft for comments, and policy implementation still needs time. In the short term, mining farms will not be shut down immediately on a large scale; but when the NDRC officially sets the tone, local policies for mining farms in the future (electricity subsidies, etc.) may be more stringent, and local governments will have less room to continue to acquiesce in mining farm operations.

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