The Golden Age of Bitcoin Mining? CoinNet’s Views on Future Hashrate Trends

At 10:00 am on November 24, 2015, the difficulty of Bitcoin mining increased by 10%, and the current difficulty is 72722780643. This is the largest increase in a year. From the perspective of the total network computing power, the computing power has increased by 100% in a year.

Bitcoin was once described as virtual gold. Now that computing power has surged again, is the golden age coming again?

A wave of market conditions, a surge in computing power? Where will the computing power of the entire Bitcoin network go?

In late autumn, the participation of XX mutual financial er made the Bitcoin market hit a new high, climbing to ￥3300. The market was good, and the computing power of the Bitcoin network grew rapidly, and on November 22, 2015, it approached 600P , reaching 582P. On the 26th, Bitcoin and Litecoin began a new round of climbing tests. Where will the price and computing power go?

Where does the computing power growth come from?

1. New mining machines from mining machine manufacturers are launched into the market

Whether it is Bitfury and KNCMiner's TSMC-manufactured 16nm chip Bitcoin mining machines, or Bitmain and Avalon's fully customized S7 and A6 based on 28nm chips. The new mining machines, with better power consumption and computing power ratio, are driving the rapid progress of the mining industry, and the entry of mining machines into the market coincides with the gradual rise of the market. Whether it is Bitfury's 400P, KNC's successful research and development, or the rounds of pre-sales and sales launched by Bitmain and Avalon, new machines have become the main force for the growth of computing power. And Biwang's 14nm mining machine will also be launched on the market in the new year of the Gregorian calendar.

Will these new machines harvest new leeks, or force old leeks to fall back into the trap? Or will they usher in an era where everyone can mine and make money? It’s hard to say.

2. When mining becomes profitable, old machines are turned on

Throughout 2015, the price of the currency was around 1500 yuan for a long time. It tried to climb during the Greek crisis, but then fell back quickly. In general, the daily income per ton of mining in 2015 hovered between 12.5 and 16.5 yuan. It is noted that when the theoretical income per ton of mining exceeded 16 yuan, the computing power began to move forward rapidly and entered a state of explosive growth. In addition to the reasons for old machines, because of profitability, when the price of the currency was 2000 or above, the mining machines that had been retired were powered on again and operated.

Recent trend analysis:

1. A rare trough in growth

In the overall rapid rise of computing power, there are also rare low points. Just like life, there are lows, and naturally there are surprises. The most recent low point of computing power in January occurred on October 29, with a computing power of 411P. We found that on this day, Bitcoin stood firm at the price point of 2000, and began a sudden big market to the highest point of 3345 in a year.

2. Cruelly low prices

The most recent price low was 1,262 yuan on August 25. At this point in time, the total network computing power has barely reached 400P. At around 1,300 coin prices, the theoretical daily income per T computing power is only about 12.5 yuan.

3. Roller-coaster-like fluctuations in computing power

The most recent sharp increase in daily computing power occurred in November 2015, when the coin price was at its highest point in a year. It increased directly from 442.53P on the 11th to 579.38P on the 12th, and returned to 477.90P on the 13th, indicating that the coin price plays a dominant role in the growth of the computing power of the entire network (the decisive factor is the unit computing power income).

4. Unpredictable computing power drop

The biggest drop in daily computing power recently occurred from 502.47P on October 19 to 384.37P the next day. The reduction was more than 100P per day, and during this period, the price of the coin fluctuated between 1700-1800. From this, it can be seen that when the price of the coin was below 1700 yuan, many machines that were sensitive to the price of the coin and the income were temporarily shut down. It is speculated that this part of the computing power should be about 150P, which should come from Fried Cat, Ant S3, Laolong Mine, etc.

Forecast of total network computing power in the next three months

Around August 20, the total network hashrate was around 400P, with a quarterly increase of 180P. Based on this calculation, after the Spring Festival next year, at the end of March in the Gregorian calendar, the total network hashrate will reach 800P. However, God does not throw dice. The future will come naturally, and all predictions are like flowers in the fog. If anyone can tell me clearly what will happen tomorrow, please tell me and let me kill him.

1. Mining machine manufacturers’ efforts

Bitmain has already conducted four batches of S7 pre-sales in China, with a dazzling array of models including 4.86, 4.46, 4.66, and 4.05. Combined with the computing power of HashNest, Ant's S7 and S5+ should have a volume of 100P-150P.

The SOC of BiNet is manufactured by Samsung and uses 14nm technology. It will be launched after the New Year of the Gregorian calendar, and the total amount should be 50-100P. The shipment quantity of Avalon and Li’an Technology should also be around 50P.

With the release of TSMC’s 16nm production capacity, Bitfury and KNCminer are expected to release another 100P into the market (it is not clear whether they will continue to own the computing power or sell it to miners).

2. The downtime factor of old mining machines is about 150P

Judging from the large fluctuations in computing power in the past, when the price of the currency is low, or the PPS revenue per T of computing power is low, about 150P of computing power may be temporarily shut down.

Of course, this is a dynamic game process. Mining is profitable, but the payback period is far away? I am afraid that only the mining machine manufacturers can digest the new mining machines themselves.

The best prediction is no prediction

With new machines online and old machines shut down, the total network computing power will easily reach 800P after the Spring Festival. If the computing power reaches 800P, the difficulty will be 111.7587 billion, and the daily income per T will be reduced to 0.0045BTC.

If the electricity fee is RMB 0.35/KWh and the machine power consumption is 1000W/T, the daily electricity cost is about RMB 8.4. The currency price needs to be above RMB 1867 for the old machine to be turned on to just cover the electricity expenses.

Is mining in the golden age?

At present, the deployment price of new mining machines on the market is more than ￥2500/T, which means that if you need to recover your investment within half a year, the daily net income should be more than 14 yuan. If the price of the currency stays at 2000 yuan for a long time, according to the rhythm of the surge in computing power, the payback time should be one year or even longer.

These miners who purchased new mining machines seem to have become another batch of leeks. This time, the seemingly golden age of mining may just be a golden paper. From this perspective, Biwang chose to take the cloud computing route and put the initial payback pressure on the platform, which is the real way to create an era of universal mining. The B12 cloud computing power pre-sold by Biwang can shorten the payback time and create future money prospects and benefits for miners.

Author: Biwang Fentian