Mining Market Revenue Report in October 2018

Key points of this report

• Currency price: The overall market fell by 9%, and 80% of the currencies fell by more than 5%

• Total network computing power: The computing power of half of the currencies is on a downward trend, with BCH computing power falling the most

• Mining machine cost: ASIC mining machine prices are still falling, and graphics card prices have fallen by an average of 8%

• Mining Revenue Analysis

• Summarize

Details of this report

Preface

This report provides mining revenues for mainstream 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 the mining revenue continues to be unable to cover its costs, a large number of miners will choose to shut down their mining machines, which will lead to the occurrence of "mining accidents".

Currency price: The overall market fell by 9%, and 80% of the currencies fell by more than 5%

In October (October 1, 2018 - November 1, 2018), the total market value of global blockchain assets fluctuated downward, with the overall market fluctuating and falling. There were two large-scale sell-offs, but neither of them effectively fell below the $200 billion mark, and the bulls and bears repeatedly staged a tug-of-war here. The closing price of the market in October was $203.3 billion, down 9% from the opening price of $223.3 billion, and the decline was 6 percentage points less than the previous month, and the market's decline slowed down.

Figure 1. Market trends in the past three months

Source: CoinMarketCap, TokenMania

Figure 2. Rise and fall of mainstream mining currencies in October

Source: CoinMarketCap, TokenMania

Among the top ten mainstream mining currencies in October, 80% of them showed a downward trend, and only BTC, DCR, and BTM outperformed the market. Among them, BTM currency price rose the most, with an increase of 6%; ETC fell the most, with a drop of 21%. The average price change of the top ten currencies was -11%.

Generally speaking, a drop in coin prices will lead to a longer payback period for mining machines.

Total network computing power: The computing power of half of the currencies is on a downward trend, with BCH computing power falling the most

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 hashrate of mainstream mining currencies in October

Source: Block Explorer, TokenMania

Among the top ten mainstream mining currencies in October, the computing power of half of them showed a downward trend, among which BCH computing power fell the most, with a drop of 15%; DCR computing power increased the most, with an increase of 92%. The average change in the computing power of the top ten currencies was 15%, a decrease of 6 percentage points from the previous month, and the computing power growth of the top ten currencies showed signs of fatigue.

Figure 4. Changes in the computing power of mainstream mining currencies in the past five months

Source: Block Explorer, TokenMania

As the bear market continues to deepen, negative growth in computing power among the top 10 currencies has become more common. In October, half of the top 10 currencies had negative computing power growth, an increase of four currencies compared to September, and ETH's total network computing power has been negative for three consecutive months.

[Note]: 1M=10^6Hash/s, 1G=10^9Hash/s, 1T=10^12Hash/s, 1P=10^15Hash/s, 1E=10^18Hash/s

Mining machine cost: ASIC mining machine prices are still falling, and graphics card prices have fallen by an average of 8%

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 ETH, ETC and XMR use graphics card mining machines, and the rest of the currencies have been cracked by ASIC mining machines.

Table 2. Encryption algorithms for mainstream mining currencies

Source: TokenMania

4.1 ASIC mining machines: the downward trend continues, and the price of small-coin mining machines has dropped significantly

In October, the price of Bitmain's Antminer continued to fall, and the price of small-currency mining machines fell significantly more than that of Bitcoin mining machines. Among them, the average price of Bitcoin mining machines fell by 11%; among small-currency mining machines, the Dash D3 mining machine fell the most significantly, falling by 70%, followed by the Litecoin mining machine L3++, falling by 67%. It can be seen that the risk aversion sentiment in the secondary market has spread to the miner group. Although the prices of mining machines are all falling, the price of Bitcoin mining machines is stronger than that of small currencies.

In addition, Bitmain launched two new 7nm chip mining machines in October. This is the second domestic mining machine manufacturer after Canaan Creative to make a breakthrough in 7nm chip technology. The emergence of new mining machines has put pressure on the selling price of old mining machines.

In comparison, the prices of Canaan Creative and Ebang International's mining machines are relatively stable, with only the price of the A851 mining machine falling by 5%, which is relatively not a big change.

Table 3. Price changes of mainstream ASIC mining machines

Source: Bitmain, Avalonminer, Ebit, TokenMania

4.2 Graphics card prices: more than half of the prices fell, with an average drop of 8%

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. Changes in prices of various graphics cards in October

Source: Tmall, JD.com, Amazon, TokenMania

Figure 6. Graphics card price changes in the past six months

Source: Tmall, JD.com, Amazon, TokenMania

Graphics card prices have fluctuated in recent months. After a relatively stable market in September, graphics card prices fell again in October. The top three graphics card types with the largest price drops were Vega 64 (-30%), RX570 (-10%), and GTX1060 (-10%). Among the eight major graphics cards, only RX560 and GTX1080Ti prices remained stable. The average price drop of the eight major graphics cards was 8%.

In addition to the factors of miners, on the supply side, the iteration of mining machines/graphics cards (S15, RX590) and the price war among manufacturers (Bitmain, Canaan Creative, Ebang International) in pursuit of listing will put pressure on the price of mining machines.

Mining Revenue Analysis

5.1 Unit computing power income: only Monero's income increased, and the average income decreased by 18%

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 1THash/s computing power can obtain in one 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] The minimum unit computing power of different currencies is different: BTC is 1THash/s, ETH is 1MHash/s, BCH is 1THash/s, LTC is 1MHash/s, XMR is 1KSol/s, Dash is 1GHash/s, ETC is 1MHash/s, ZEC is 1KHash/s, DCR is 1GHash/s, and BTM is 1KHash/s.

Figure 7. Changes in unit computing power revenue of mainstream mining currencies in October

Source: TokenMania

In October, the unit computing power income of 90% of the top ten mainstream mining currencies showed a downward trend, and only XMR's income showed an upward trend, with an increase of 12%. The top three currencies with the largest decline in income were DASH (-50%), DCR (-50%), and ZEC (-22%). The average unit computing power income of the top ten currencies changed by -18%, a decrease of 5 percentage points from the previous month.

Figure 8. Changes in the unit computing power income of mainstream mining currencies in the past five months

Source: TokenMania

From a longer-term perspective, the decline in unit computing power revenue of the top ten currencies is gradually slowing down. From a structural perspective, the decline in unit computing power revenue of large-cap currencies such as BTC, ETH, and BCH is significantly smaller than that of small-cap currencies.

5.2 Mining machine payback period: Dash mining machines are not profitable, and Bitcoin mining machines payback period is more than one year

As of the statistical date of the report, November 9, 2018, 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 is calculated.

Table 5. Payback period of mainstream cryptocurrency mining machines

Source: Public data compilation, TokenMania

Figure 9. Comparison of the payback of mainstream cryptocurrency mining machines in October

Source: TokenMania

Among the ten major mining machines, the ZEC mining machine has the shortest payback period, which takes only 190 days, while the rest of the mining machines take more than 200 days. Among them, BTM's ASIC mining machine B3 has long been in a loss and has been removed from the shelves by Bitmain, while the payback period of mining with graphics card mining machines is as high as 2156 days, which is the longest payback period among the ten currencies.

In addition, although the price of Dash mining machine D3 dropped by 70% to 300 yuan this month, the decline in currency prices and the increase in the computing power of the entire network have caused the D3 mining machine to fall into a loss-making situation. The loss of mining income will in turn lead to a lack of demand for mining machines, thereby strengthening the expectation of a drop in mining machine prices.

[Note] The above payback period is a static theoretical payback period. There will be a certain deviation between this payback period and your actual payback period and it is for reference only.

Summarize

In October (October 1, 2018 - November 1, 2018), the total market value of global blockchain assets fluctuated downward, and the overall market was dominated by oscillating declines. There were two large-scale sell-offs, but neither of them effectively fell below the $200 billion mark. The bulls and bears repeatedly staged a tug-of-war here. The closing price of the market in October was $203.3 billion, down 9% from the opening price of $223.3 billion, and the decline was 6 percentage points less than the previous month . The decline of the market slowed down. Among the top ten mainstream mining currencies in October, 80% of the currencies showed a downward trend, and only BTC, DCR, and BTM outperformed the market. Among them, BTM currency price rose the most, with an increase of 6% ; ETC fell the most, with a drop of 21%, and the average price change of the top ten currencies was -11% .

Among the top ten mainstream mining currencies in October, the computing power of half of them showed a downward trend, among which BCH computing power fell the most, with a drop of 15%; DCR computing power increased the most, with an increase of 92%. The average change in the computing power of the top ten currencies was 15%, a decrease of 6 percentage points from the previous month, and the computing power growth of the top ten currencies showed signs of fatigue.

In October, the prices of ASIC mining machines and graphics card mining machines fell to varying degrees. Among them, Bitmain's Bitcoin mining machines fell by an average of 11%. Among the small-cap mining machines, the Dash D3 mining machine fell the most significantly, falling by 70%, followed by the Litecoin mining machine L3++, which fell by 67%. The risk aversion sentiment in the secondary market has spread to the miners. Although the prices of mining machines are falling, the price of Bitcoin mining machines is stronger than that of small-cap currencies.

In October, the unit computing power income of 90% of the top ten mainstream mining currencies showed a downward trend, and only XMR's income showed an upward trend, with an increase of 12%. The top three currencies with the largest decline in income were DASH (-50%), DCR (-50%), and ZEC (-22%). The average unit computing power income of the top ten currencies changed by -18%, a decrease of 5 percentage points from the previous month.

Among the ten major mining machines, the ZEC mining machine has the shortest payback period, which takes only 190 days, while the rest of the mining machines take more than 200 days. Among them, BTM's ASIC mining machine B3 has long been in a loss and has been removed from the shelves by Bitmain, while the payback period of mining with graphics card mining machines is as high as 2156 days, which is the longest payback period among the ten currencies.

In addition, although the price of Dash mining machine D3 has dropped by 70% to 300 yuan this month, the decline in currency prices and the increase in the computing power of the entire network have caused the D3 mining machine to fall into a loss-making situation. The loss of mining income will in turn lead to a lack of demand for mining machines, thereby strengthening the expectation of a drop in mining machine prices. It is expected that the D3 mining machine will soon face the treatment of being taken off the shelves.

In the cold winter, not only the miners are in a worrying situation, but even the mining pools are unable to withstand the bleak market conditions .

On November 6, 2018, Bitcoin mining pool BTCC publicly announced an "indefinite suspension of operations", which made the old people in the cryptocurrency circle feel sad. According to data provided by BTC.COM, the number of Bitcoin blocks mined by BTCC mining pool in the past month is actually 0, while the number of blocks mined in the past three months is 72. At its peak, BTCC mining pool was the third largest mining pool in the Bitcoin network. According to incomplete statistics, 17 mining pools have stopped operating so far, completely disappearing from people's sight.

Disclaimer

TAMC Research Institute does not have any relationship with the digital assets or other third parties involved in this report that may affect the objectivity, independence, and impartiality of the report.

The information and data cited in this report are all from compliant channels. The sources of the information and data are considered reliable by TAMC Research Institute, and necessary verification has been carried out on their authenticity, accuracy and completeness. However, TAMC Research Institute does not make any guarantees as to their authenticity, accuracy or completeness.

The contents of the report are for reference only. The facts and opinions in the report do not constitute any investment advice for the relevant digital assets. TAMC Research Institute shall not bear any responsibility for losses caused by the use of the contents of this report, unless otherwise expressly provided by laws and regulations. Readers should not make investment decisions based solely on this report, nor should they lose their ability to make independent judgments based on this report.

The information, opinions and speculations contained in this report only reflect the judgment of the researchers on the day the report was finalized. There is a possibility that opinions and judgments may be updated in the future based on industry changes and updated data information.

The copyright of this report is owned by TAMC Research Institute. If you need to quote the content of this report, please indicate the source. If you need to quote a large amount, please inform us in advance and use it within the permitted scope. Under no circumstances shall this report be quoted, deleted or modified in any way contrary to the original intention.