Bitcoin "miners" drifting south: Southeast Asia is not a paradise either

"Bitcoin has recently returned to 10,000, how are the ones you have?"

“The market has improved a little, but no one is asking for my inventory (mining machines)!”

In a certain electronics market, two mining machine merchants gathered behind a "one-meter counter" and were exchanging the latest "information" in the cryptocurrency circle. Not long ago, the turmoil of the concentrated plunge of digital currencies caused some merchants in these markets and the "miners" engaged in mining to suffer serious "mining disasters".

The shrinkage of wealth is widespread, but some smart people have sensed the danger in advance.

Before the mining disaster that swept across major electronics markets in southern China, some miners with a keen sense of smell had quietly moved their positions. Some moved from big cities to small border towns in Yunnan, taking advantage of low electricity prices to continue mining; others directly crossed the border and set off a new mining boom in Southeast Asia.

Zhang Han is a member of this "transnational" mining team. "At that time, I thought that after going to Southeast Asia, the cost would be significantly reduced, and compared with the price of coins that had fallen for several rounds, there would still be some profit." He told Dongdong Notes that when he and some miner friends "occupied" suburban houses in Cambodia, Myanmar, Vietnam and other places, they found that the reality was much more bleak than their ideals. "Haha, I regret it, I really regret it."

Hardware is hard to find, the cost is high, and it is difficult for "transit" miners to make money

"What can I do? I'll just consider this as a chance to experience the Southeast Asian customs for a few months." Zhang Han expressed his idea of ​​returning home to his wife on the other end of the phone with self-mockery, with a hint of helplessness in his words.

Half a year ago, following the "cross-border" tide of miners from southern China, he came to Cambodia and chose a small town near the Vietnamese border to build his own new "mine". He chose this place because of its cheap rent, low labor costs, and most importantly, relatively complete network facilities.

"Compared with other friends who chose Vietnam and Myanmar, although the electricity bill here is a little more expensive, other costs are not high." Zhang Han said that the electricity price in Cambodia is around 750 riels per kilowatt-hour, equivalent to about 1.3 yuan, which is comparable to the domestic industrial electricity price, and there is an "inside line" who can help him "steal electricity" from roadside street lighting facilities for mining.

The local housing rent is also very low. A 500-square-meter shed (similar to a bungalow factory) only costs 500,000 riels per month, which is less than 800 yuan. "And 500,000 riels can hire two local young laborers to take turns watching the mine all day."

After communicating with fellow miners in other parts of Southeast Asia, Zhang Han found that the overall cost of mining in Cambodia is indeed relatively low, at least 10-20% lower than Vietnam and Thailand. Some fellow miners he knows even chose to build new mines in Cambodia near Vietnam under his influence.

Just when he was feeling somewhat complacent, unexpected problems began to arise one after another, some of which gave him a headache.

"Maintenance and spare parts are a very big problem. It can also be said that the cost of supplies is very high." Zhang Han told Dongdong Notes that the domestic equipment was first shipped to Cambodia. Since it was packaged in batches and transported by land, the cost was not high.

At the beginning of his "transit", he specially packed some hardware with high consumption for the maintenance and replacement of mining machines. However, this precaution could not withstand the increasingly hot climate in the local area after March this year, coupled with full-load computing, and these hardware were quickly consumed.

"I went to many places and found that buying spare parts here is harder than climbing Mount Everest." Therefore, he and many miners who passed through Cambodia, Vietnam and Myanmar had to seek channels to purchase hardware equipment in China and mail them to local places.

However, this will increase the cost of accessories. In addition, some rental and electricity price areas are in border areas, and logistics are not well developed. It often takes ten days or half a month to wait for a few new mining cards, and some cards may even be lost, which seriously affects the overall progress of mining.

Sometimes, in order to get the accessories in time to avoid delaying mining and causing economic losses, he had to ask miners in Thailand for help. After all, compared with other Southeast Asian countries, the supply of related hardware in Thailand is relatively stable. However, although the transportation efficiency is improved, the cost is unacceptable after being marked up by "peers".

After leaving the country, the supply of hardware materials has indeed stumped many South China "miners" in Southeast Asia. According to Zhang Han, the hardware maintenance costs and downtime losses incurred by mining in Cambodia are basically about three times that of domestic mining. In addition, the hardware is hard to find, and people basically dare not buy or repair second-hand mining cards, making the overall operating costs of the mine a headache.

In addition, the severe power supply problem in Southeast Asia also troubles these transit miners from time to time, especially when the prices of digital currencies such as Bitcoin reach low levels, the impact is more obvious.

“Unreliable” power supply makes miners suffer

"It's the same here. It's not just my family that uses electricity."

Bored and alone in a mining factory in Cambodia, Zhang Han often exchanges information with fellow miners in Southeast Asia via Internet phone. The most common complaint he hears from his friends is the power supply problem in Southeast Asia.

Power supply, like the lifeblood of every mine, is a necessary condition to support the normal operation of the mine.

"I've never been here before, and who would have thought that these countries would have frequent power outages." He told Dongdong Notes that even in Thailand, where the power grid is relatively well developed, large-scale power outages often occur due to power overload. Such a poor power supply is like a nightmare for miners who run mines. "Friends on the border with Myanmar are even worse off. Sometimes, because several mines steal electricity from street lights, the entire town will be out of service, and it will take several days for someone to come and fix it."

In order to solve the problem of power outages, Zhang Han purchased some small diesel generators from China and shipped them over. However, the power supply of diesel engines is very limited, and can only supply 12 or 13 high-performance mining machines to work at the same time. Therefore, power outages have a huge impact on the daily operation of the mine.

"Mining machines operate continuously and cannot be interrupted. Otherwise, we need to start all over again. Moreover, dozens of mining machines can only mine less than half a bitcoin a day on average. We cannot afford to suffer such a hassle." Every time he encounters a power outage or off-peak electricity consumption, he gets so angry that he beats his chest and stamps his feet, because the data previously calculated by the mining machine becomes invalid in that instant. Even if the power comes back soon, new data calculations need to be performed again.

"But here, power outages often last for a whole day, and it takes at least one night to restore normal power supply." In addition, nearby residents always report the theft of electricity by some mines to local power-related agencies, which has led to the strengthening of law enforcement agencies to investigate and punish theft of electricity. Mines often have to hide from law enforcement teams like guerrilla warfare. If they are unfortunately caught, they will have to pay a large bribe. "But if this happens frequently in Cambodia and Myanmar, different departments will also want to find a reason to come and get some corruption."

Zhang Han showed Dongdong Notes the group chat conversations of the "transit" miners. A miner who operated two mines in Phan Thiet, Vietnam, complained that he was reported by surrounding residents for privately connecting to public electricity and causing noise disturbances. As a result, he was fined "bankrupt" by the authorities, and the "minerals" he had previously earned from mining in the country were almost lost, making all the miners mining in Southeast Asia feel panic.

"After all, they occupy a large amount of local electricity demand, and the heat waves and noise generated by the mining machines also disturb the residents living nearby to a certain extent, so they have always been unfriendly to (miners) from China," he said.

Although the Internet in Southeast Asian countries is not that bad, the intermittent power supply and frequent power grid failures are always bothering many "transit" miners. The rising costs and efficiency losses caused by power supply problems directly affect the income of these mines.

According to Zhang Han, his mine now loses nearly 9,000 yuan per month on average, which is not as high as other "transit" miners in Southeast Asia. In addition, as an "outsider", he, like other miners, faces a high cost of living in the local area and has a hard time making ends meet.

"However, even so, local miners in Southeast Asia still try to find ways to mess with us," he said.

The mine with "high-tech" equipment has become a thorn in the eyes of local miners

"Compared to our equipment, the mining equipment used by local miners in places like Thailand and Cambodia can really be described as 'incompetent'." Talking about the characteristics of local miners, Zhang Han became excited. He told Dongdong Notes that when many transit miners first came to Southeast Asia, they were laughed at by the equipment of local miners. All of them were mining equipment modified from home computer hosts. In order to dissipate heat, they added fans without considering the chassis structure. The modified mining machines looked like a "hornet's nest".

In comparison, the mining machines shipped in batches from China to Southeast Asia appear much more high-end. They have professional mining cards, dedicated chassis and power supplies, and neatly arranged grid cabinets. Their computing performance is also very strong.

"Although their assembled mining machines are not weak, they are indeed not as powerful as us. One (Ant) S9 can match two or three of their assembled machines." Although the "output" of blockchain mining has no absolute relationship with the computing power of the mining machine, due to the disparity in the "strength" of the equipment, "transit" miners such as Zhang Han have long been regarded as thorns in the eyes of local miners.

First, the most obvious is in the circulation and trading of digital currencies. Zhang Han said that since there is no official agency channel in mainland China, most of the Bitcoin and Ethereum they mine are bought and sold through trading agency platforms in Taiwan and Thailand.

"Thailand's platform has a regional protection mechanism, so we are at a disadvantage when trading on it. Some of our peers traded through personal agents, but ended up running away with their money." Although in most parts of Southeast Asia, the government has a neutral attitude towards concepts such as Bitcoin and blockchain, it is very difficult for "transit" miners to protect their rights locally because most of them are Chinese. Therefore, most Chinese miners are also very cautious when cashing out digital currencies, and the transaction cycle is obviously much longer.

"Although (the currency) can be sold through Taiwan and Malaysia, the ability to resist risks is weakened, and the control over the transaction price is not so precise," said Zhang Han.

Furthermore, the most common thing that "transit" miners who run mines in Southeast Asia encounter is being reported, and the reasons for the reports are numerous, including involvement in pornography, drugs, stealing electricity, hiding weapons, pollution, etc. Zhang Han told Dongdong Notes that a miner friend in Bangkok had his mine reported for fire hazards after multiple arson attempts two months ago. He was investigated by relevant departments and was threatened by local miners and trading institutions afterwards.

"In addition to the locals, foreign institutions from Europe and the United States that set up mines in Southeast Asia also seem to be quite hostile to us, but they have not overreacted yet." He said that as some miners who "transited" to Southeast Asia to set up mines returned home, he was also seriously considering whether to end his various attempts here.

Although the price of digital currencies such as Bitcoin has slightly recovered, it is unlikely to return to its original high. This means that even if Zhang Han persists in Cambodia, he may not be able to usher in a new round of cryptocurrency speculation and make a fortune.

What's more frightening is that, judging from the current losses, he no longer has much money to support the normal operation of the factory. After losing all the money he earned from mining in China, Zhang Han will also face the endgame of "bankruptcy".

【Conclusion】

The "transit" miners who were bent on making money originally wanted to squeeze out higher value space for digital currency at a lower acquisition cost, but they did not expect to encounter various difficulties after following the trend of "transit". This was not only because they did not take many actual factors in the region into consideration in advance, but also because of the miners' anxiety in the face of speculation.

Even though Bitcoin, Ethereum and other digital currencies still have hype value, this type of virtual assets that are not related to the real circulation market will one day return to their due value. Whether it is mining or speculating in cryptocurrencies, you should think twice before you act.

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Many years of experience in financial media, senior analyst in the industry, author of three best-selling books: "Xiaomi Ecosystem Battlefield Notes", "WeChat Thinking", and "WeChat Power"