Daily life of three Bitcoin "miners": treating mining as an investment

In the past few years, in the cryptocurrency circle dominated by bookmakers, countless wealth stories have risen and fallen. Players have used digital currency platforms to reap profits, and large amounts of money have flowed in and out.

Among thousands of virtual currencies, Bitcoin is quite popular. Generally, there are two ways to obtain Bitcoin: one is to buy it with circulating currency through Bitcoin trading platforms; the other is mining, that is, selling computing power in exchange for Bitcoin rewards.

According to the rules, every 10 minutes, a new Bitcoin encrypted data block will appear on the Internet, and all mining equipment in the world will calculate and generate it at the same time. The successful one will get Bitcoin.

In September 2017, the national regulatory authorities banned ICO (initial coin offering, which is the first issuance of tokens by blockchain projects to raise funds for Bitcoin, Ethereum and other general digital currencies) transactions in China, and gradually blocked the domain names of overseas ICO trading platforms. However, some miners with the vision of "decentralization" of digital currencies and various tokens, with various purposes and desires, are still entering and exiting the market, eager to occupy a place in the virtual currency world.

The pictures in this article are all from Visual China

“I see mining as an investment”

Xu Mao, company employee, Guangzhou, 26 years old

In 2015, I learned about Bitcoin from the Internet. At that time, I felt that Bitcoin was like a pyramid scheme and was not real, but the overwhelming news on the Internet about making money with Bitcoin made me interested in it, and I wanted to find out how it was produced and why it had value.

At first I thought that Bitcoin was like a physical object and needed to be mined in the mountains. Later, after collecting various information on the Internet, I realized that it was virtual.

I bought a mining tutorial online, but I didn't read it until I bought a mining machine. Then I learned everything. Mining is based on an algorithm, and only through continuous calculations can you get bitcoins. The more machines you invest, the more you can mine.

I don't need to understand the algorithm. I spent 6,000 yuan to buy a mining machine from a scalper, put it at home or somewhere else, or find a hosted mining pool, set it up and start mining.

When I got into mining, mining was already very difficult. After mining for a year, I only mined 0.0004 bitcoins. One bitcoin is now worth 60,000. My investment was in electricity and machines. The machines need to be connected to the Internet and are generally very power-consuming.

I consider mining as an investment. Although Bitcoin is virtual, it is equivalent to the value of gold. I also need to know how to use it. If you don't know how to use it, you can't feel its existence. It is like an anonymous code book. You can withdraw money from an ATM without using a bank card.

Last year, I worked in a friend's mine for 8 months, mainly doing computer assembly and purchase, as well as machine maintenance, working about 10 hours a day.

His mine is not very big, with about 60 machines. We mine in a relatively remote place, because it requires a lot of electricity, and we save as much as we can. Mining machines are like computers, but they need to be turned on 24 hours a day, always in computing mode, noisy and high in power consumption.

It was also from last year that I started the business of reselling mining machines, helping the boss sell popular mining machines, mainly the s9L3 and a3 machines. The boss was usually someone who used to sell computers and mobile phones in Shenzhen Huaqiang.

Mining machines are closely related to the Bitcoin market. When I first went there, a mining machine made 300 yuan a day. At that time, mining machines were profitable. I made up to 6,000 yuan by reselling one. Later, it became unsuccessful. When I lost money, I lost 1,400 yuan per machine. I lost a lot of machines. Now, a Bitcoin mining machine only makes about 50 yuan a day.

If the mining profits are not good, no one will buy mining machines, and the mining machine market will be lukewarm.

I once thought about quitting my job and going home to mine, but mining is no longer cost-effective. Especially after the market crash, Bitcoin fell from a high of 130,000 in January this year to 40,000 in April, and then rose from 40,000 to more than 60,000. The mining income was not good, so I stopped doing it.

I also bought Bitcoin on the trading platform. I had just started working and had not saved much money, so I invested about 40,000 yuan in Bitcoin. Just like investing, I bought it and left it there. I could see a number and a string of codes on the account.

What attracts me most about Bitcoin is speculation. I can't help but pay attention to it every day, just like if you have a million dollars at home, you might open it from time to time to check if the money is there. I try to make my mentality more stable so that the income I get will be more stable. It's just that retail investors like me are very passive and can be easily influenced by the market.

When I first started mining, there were not many people around me who understood Bitcoin, and there were more people who were working in a stable job. Now, many people ask me basic questions about Bitcoin and how to invest. When the market is crazy, many people want to buy, but at this time, the market is at a high level and it is unpredictable.

Last September, virtual currency trading was completely banned because there were too many scams and illegal fundraising in ICOs at the time, and most people lost money. Now the country prohibits illegal virtual currency trading, or trading directly on the platform with RMB, but offline trading is not illegal. Many exchanges have also moved overseas to conduct off-site trading.

This market is just like the stock market, it is unpredictable.

People who play Bitcoin like high returns, and mining is a stable income. Many people don’t have patience, so they may not be able to escape the market in the end. How can I say that? For example, if you have 300 pigs now and find that the market is very hot, you are profitable, but people are always greedy. At this time, you want to make money from 1,000 pigs, so you will raise more, but the market is unpredictable, and you will lose money or even go bankrupt.

Cryptocurrencies are high risk.

“I became a miner to understand the technology”

Luo Ke, Internet system architect, Chengdu, 25 years old

Mining is becoming increasingly difficult and time-consuming, and buying mining machines is also very expensive.

I became a miner to understand this technology, and then tried mining at home. However, I didn’t learn about this technology through mining, but mainly through studying the code and reading explanations on the Internet.

At that time, I rented a house and used my own computer to mine at home. Although I didn't have to do anything, it consumed a lot of electricity and made a lot of noise. I went on a business trip abroad for a while, so I left my computer at home and kept it running 24 hours a day. Even so, the mining was slow and I could only mine a small amount each time.

The first time I mined Bitcoin at home, I was actually quite calm, because it is very difficult to mine one on your own. You have to connect to a mining pool, otherwise you will only get 0.00x, which is not worth much.

Mining at home does not have the scale effect and electricity cost advantage, it is just more stable, but it consumes a lot of energy. It is not as advantageous as those large-scale mining farms, and it is useless except for research.

So I will still choose to buy some coins. I have bought some on online exchanges, mainly to make profits by buying at low prices. I mainly invest to make money, and most of my friends are also doing quantitative trading or early investment. There is more than just Bitcoin in the blockchain.

I spend about five minutes on it every day, looking at it on the online exchange, and then calculating when I will reach my small goal, and see if I can buy some at a low price. It is said that "a day in the world is a year in the cryptocurrency world", which I think is very appropriate. Bitcoin fluctuates greatly and the economic cycle is short.

I just play for fun and don't expect to really make any money. It's unlikely to get rich overnight. People who get rich from Bitcoin usually hold it for many years and cash out at a high point.

“If speculation is the main focus, Bitcoin will have a hard time developing in the long run”

Ma Hao, Beijing, engineer at a listed company, 41 years old

I first learned about Bitcoin when I read the news online in August 2013. In September of that year, I saw that Bitcoin had speculative value and could generate income through mining, so I became interested in Bitcoin.

At that time, I understood that Bitcoin was a financial management and speculation tool. Later, I obtained some information through chats in QQ groups and learned about the principles of blockchain and the basic knowledge of Bitcoin transactions and mining.

In October 2013, I started to get involved in mining. Miners actually maintain the operation of the blockchain, and they get rewards by mining and packaging blocks, and they get additional rewards by processing transactions in the blocks. Every day I have to check the power load of the machine, whether the computing power is normal, as well as the temperature and heat dissipation problems, and the fluctuation of the currency price.

At that time, mining Bitcoin was already very difficult. I bought and assembled a set of 7850 six-card mining machines on Taobao to mine Litecoin. I work in IT, so technical problems are not difficult for me. Building a graphics card mining machine is similar to building a computer, and the main thing is to find the right driver.

From 2013 to 2014, I purchased four sets of 7850 and 270x graphics card 6-card mining machines, which I bought through Beijing Zhongguancun agents at the time. The price was about 40,000 yuan.

When I bought my first graphics card mining machine, I got my money back very quickly, which greatly motivated me. I bought three more sets, but unfortunately encountered a "mining disaster". At that time, Litecoin quickly dropped from 108 yuan to 8 yuan, falling below the cost line of graphics card miners. At that time, I mined at home in Beijing until I reached the third level of electricity fee, and lost more than 20,000 yuan.

In 2014, I bought a villa in Langfang. The basement of the villa is very suitable for mining, and the electricity fee is 0.58 yuan without any tiers. Until 2017, the mining machines I bought were all working in the basement. At the end of the year, my neighbor got seriously ill with cerebral congestion. I was worried that it would disturb the neighbor, so I chose to let the mining farm be managed by my group friends.

In March 2017, I first purchased an S9 13.5T mining machine online. In April, I purchased three L3+ mining machines. These machines cost about RMB 60,000.

I learned from the last lesson and studied it every day. It was the first time I used a chip mining machine to mine Bitcoin, and the daily profit was 0.0079. Affected by the "mining disaster" in 2013, I adopted the method of mining and selling, and sold the Bitcoin the next day. The most impressive time for me was in December 2017, when Bitcoin skyrocketed and the daily mining profit was more than 1,000. I was very happy at that time.

But in April 2018, the mining farm closed down, the price of coins plummeted, and I chose to sell the mining machines to liquidate.

Since I became a miner, I lost 20,000 yuan from 2013 to 2014, and made a profit of about 50,000 yuan from 2017 to 2018. I recovered all my investment at the beginning of this year, and finally made a profit of about 50,000 yuan from mining. In April this year, I sold all my mining machines.

Bitcoin changes really fast. I mainly get market information by watching the market and communicating with netizens. Since the Internet trolls and scalpers are rampant, it seriously affects the normal communication of netizens, so I established a small Bitcoin miner communication group in May and June 2017.

I personally think that Bitcoin is a product of decentralization. Although large-scale mining farms have cheap electricity prices, they consume a lot of electricity and violate the concept of decentralization, while home miners have inherited the concept of decentralization very well. In terms of advantages and disadvantages, home miners cannot compare with large-scale mining farms in terms of production costs, but home miners are flexible in operation and can adjust the currency they mine at any time.

I think mining is a real industry that operates with a production and operation concept, which is more stable than market speculation transactions based on capital operation. The development of Bitcoin is inseparable from the people who use it. If speculation is still the main focus, Bitcoin will hardly develop in the long run.

(At the request of the interviewees, all the characters in this article are pseudonyms)