The great battle for computing power during the flood season: the alternative survival rules of miners

The cold stars suddenly rose,

The black flock of birds migrated away.

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"Migrating Birds" says: "After going through numerous crises, they travel thousands of miles for only one purpose - survival. Migratory birds' migration is a struggle for life."

For mine owners and miners, a migration for survival will also begin.

The arrival of the flood season means that electricity production reaches its peak, but it also means that the high electricity costs will drop sharply to around 0.2 yuan.

Mine owners and miners who are on the verge of running out of ammunition and food are eager to grasp at life-saving straws in the cold winter.

Last year, the collapse of cryptocurrencies caused many miners to sell their mining machines and exit the market in dismay.

"Breaking through the cost price of mining machines" and "selling mining machines by kilogram" have become common discussion topics in the cold winter of the cryptocurrency circle.

In addition to factors affecting currency prices, electricity costs are also a fundamental factor affecting miners.

In April and May, the rainy season arrives and the flood season begins.

Judging from past experience, mining will become the main battlefield of the battle of computing power, and this year it may be even more intense.

1

It is understood that most of China's mines are located in Inner Mongolia, Xinjiang and other places. These mines mainly rely on thermal power generation, and the electricity cost is between 0.3 yuan and 0.35 yuan.

The cost of electricity during the flood season in the southwest is approximately between 0.14 yuan and 0.19 yuan, almost half the price.

Such low electricity prices are enough to encourage miners to choose to migrate south.

Some media predict that 30% of the mining machines in the entire network will move south this year, which also means that more than 1 million mining machines will be moved from Inner Mongolia and Xinjiang to Yunnan, Guizhou, Sichuan and other places before the flood season arrives.

However, trading during the flood season is not as easy as imagined.

As a capital-driven industry, setting up a mine requires incurring high fixed costs.

The high cost of transportation becomes the first problem.

Someone once estimated that the transportation cost of transporting each mining machine from Xinjiang, Inner Mongolia and other places to Sichuan is about 20 yuan.

If the location is remote, the transportation cost of each mining machine may reach 30 yuan.

Assuming that the mine owner owns 10,000 mining machines (a minimum of 10,000 units), the transportation cost alone would be as high as 200,000 to 300,000.

This does not include the losses caused by the shutdown of mining machines.

Generally speaking, the transportation time of a mining machine is about two weeks, and the time from power failure to restarting the mining machine is more than 10 days.

During this period of time, the mining machines are completely unable to work.

Therefore, in addition to the transportation costs, you also need to bear the high losses caused by downtime.

The repair of equipment failures and maintenance of damaged equipment during transportation are also a considerable expense.

In this way, some small mine owners and miners without capital have been shut out.

In fact, successfully moving the mining machines to the Yunnan, Guizhou and Sichuan regions is only the first step.

With the tightening of national electricity policies, some non-compliant small hydropower stations have been forced to shut down, and the electricity resources at the top of the industry have become increasingly limited.

Without former partners or strong relationships, ordinary mine owners and miners would not be able to obtain suitable sites and low electricity prices.

They can only get some electricity from the secondary electricity market through intermediaries, which also leads to some miners receiving hosting electricity prices that are 10% higher than the average level.

In addition to raising prices arbitrarily, they may also face malicious power outages by intermediaries, or even termination of contracts, fraud, and so on.

One miner said in an interview, "They are not afraid of breach of contract at all. They just drag you along. You can't leave even if you want to. Anyway, the flood season is only a few months, you can't afford to waste it."

"We didn't die in the market, we all died in the routines."

2

Despite this, many mine owners and miners have begun to plan for the flood season.

However, achieving profits by relying on low costs during the flood season also requires taking certain risks.

According to the current coin price, the computing power in the market is sufficient. A large amount of computing power flowing into the market will inevitably increase the difficulty of mining.

If the price of the currency cannot keep up with the increase in computing power, it may dilute some of the profit margins brought by low-cost electricity costs.

The income of miners is also difficult to guarantee.

In addition, the profitability of the current mining industry has been greatly weakened, and without the support of currency prices, the remaining computing power will still be eliminated.

It is foreseeable that this battle of computing power will be extremely fierce.

3

As early as the beginning of this year, a mining machine sharing platform called "Bit Deer" came out of nowhere and quickly achieved a series of outstanding results, including over 1.2 million visits, 50,000 daily active users, and 58% large orders.

In addition to BTC.com and AntPool, which are the top two in terms of BTC computing power on the entire network, the mining pools that cooperate with BitDeer include F2Pool, ViaBTC and other 8 top 10 mining pools.

It is understood that the platform provides Antminer time-sharing sharing services, and users can purchase computing power ranging from 120 to 360 days and 20T/s to 10,000T/s according to their needs.

Time-sharing mining machines are different from the cloud computing power contract products currently on the market. Most of the previous cloud computing power contract products were lifetime products.

The computing power contracts provided by BitDeer have more flexible terms and lower thresholds, and investors can selectively purchase them based on their actual conditions.

Just last Saturday, BitDeer founder Lu Haiyi released the latest "flood season package" at the 2019 Mining Summit for miners and investors who have not yet made flood season arrangements.

In addition, it also includes a package based on the super-powerful mining machine S17 that Bitmain has just announced will be launched in early April.

According to District 45, the "Flood Season Package" and "S17 Package" have advantages in many aspects such as electricity prices, computing power costs, yield rates and risk resistance.

Compared to purchasing an Antminer, the price of renting a mining machine is obviously cheaper.

In addition to the cost of the mining machine itself, there are also a series of costs including mining machine maintenance costs, cooling costs, electricity costs, etc.

The in-depth cooperation between BitDeer and Bitmain products also gives electricity price costs an absolute advantage.

According to Bit Xiaolu's exclusive package for flood season, the package electricity price will be as low as 0.22 yuan per kilowatt-hour, which is significantly better than most flood season managed electricity prices on the market.

In addition, according to the information on the official website, it only takes more than three months, or about 106 days, to recover the cost, and the rate of return is also very considerable.

The static yield during the 180-day flood season is as high as 50%, and the annualized yield even reaches 100%.

This also ensures that even if the coin price drops below $3,100 and the mining difficulty increases by 30%, the capital can still be preserved.

Although this battle during the flood season will be very difficult, there are still sure-fire ways to win waiting to be discovered in the war.