Bitcoin mining has a self-destruct mechanism

This is a Bitcoin mine. Due to the contradiction between electricity costs and revenue, as well as the deviation from the idea of ​​decentralization, I don’t think it is a long-term solution (Picture from the Internet)

For a long time, there are two types of Bitcoin players: one is to invest a large amount of money in full-time speculation or mining, and the other is to participate occasionally in a small amount without so much financial resources and energy (such as the author), and not even a small retail investor. However, with the soaring difficulty of mining and the market that is more chaotic than the Chinese stock market, even this small sense of participation has been taken away.

Bitcoin mining needs a new approach

Of course, everyone knows that if the market continues to be so sluggish and the difficulty continues to rise, the big players who run mining farms will soon be unable to bear it. Because no matter how low the electricity price is, there is a limit. Crazy expansion of the scale of mining farms will eventually fall into a vicious cycle, leading to collapse, that is, self-destruction - this concept is proposed by me, a non-authoritative person, and big Vs can criticize it at will. Although it is hard to say what the future will be like and whether it will return to zero, I believe that many friends have the same wish as me: it’s time for some new gameplay to appear!

As early as two years ago (at the end of 2013, when everyone was most enthusiastic about Bitcoin), I heard that a team was developing a router that could mine Bitcoin. They planned to manufacture a router with a built-in mining chip, the price was very low, or even given away for free, and the mining income would go to the manufacturer.

What an idealistic idea, and how it matches the original intention of Bitcoin! However, the subsequent development does not allow their indirect profit model. Faced with the simple and crude high-computing power mining machines, people's desire to get rich quickly, and the reality of the skyrocketing mining difficulty, this idea is simply impossible to succeed. If it is really mass-produced and given away for free, the end result will definitely be a huge loss.

Since then, various strange phenomena have emerged in the Bitcoin circle, and the author was also deeply disappointed (probably mainly because of the loss of money). After writing the article "Miners are stripped again, you can see the dark inside story of the Bitcoin mining machine industry", I have never written any articles for Bitcoin again. I have two other widely reprinted articles, "It is difficult to extricate myself - a loser geek's Bitcoin mining diary" and "Bitcoin mining income is rapidly declining. What is the nonsense about futures mining machines?" I suggest that friends who are interested can search and take a look, because I really don't want to repeat the basic information such as the principle of Bitcoin mining in this article.

The Bitcoin computer launched by 21 in the United States has some functions such as Bitcoin payment in addition to mining.

The last time I wrote something about Bitcoin was when I saw that 21, an American company, had launched a "Bitcoin computer". When 21 announced that it would make Bitcoin chips in the first half of the year, it announced that it would produce a mining chip with strong computing power and low power consumption. This chip can be embedded in IoT devices to mine silently (some people think this is called stealing electricity mining). If there is an opportunity, it can also be embedded in computer motherboards, routers, and smart phones to make full use of the idle electricity of these devices to engage in Bitcoin mining. I felt bright at the time. Isn't this the mining concept that I have heard about but never seen in person for two years?

Although it may not become mainstream, I think it will be a major trend in Bitcoin mining in the future. However, after tinkering for half a year, 21 launched a gadget with a price of $400 and a computing power of 50GH/s-125GH/s, which was not embedded in IoT devices. I am a little disappointed, but this is 21's first product, and there should be other types of products in the future.

What does it feel like to have a router that can mine Bitcoin?

However, less than a day later, a Bitmain employee contacted me and said they were going to launch a router that can mine. I thought at the time, is this a coincidence, or is the Bitcoin community really going to change? The thing I waited for two years finally appeared, so I didn't ask about the specific parameters and functions of this mining router in detail, and asked to borrow one to play with. The employee also readily agreed and sent one to me by express delivery that day.

Antminer Router R1

Here are my thoughts on this product (specifically, the Antminer Router R1):

The appearance of R1 is similar to the portable routers we use for business trips and travels (its main functions are the same). It can be used by plugging it directly into the wall and then connecting it to the Internet cable (it also supports wireless). Unlike the TP-Link703n that miners are particularly familiar with, which requires Micro USB power supply, this one actually integrates a DC power supply into the body of the router.

After powering on, connect the hotspot of R1 according to the manual and enter the management interface. You will find that this is the OpenWRT system that miners are very familiar with. Although the interface of this system is very familiar to miners, it seems too professional for beginners. After all, this is a router, and we need to use it to set some router functions, but OpenWRT is too professional and the interface is not friendly to the general public.

After entering, of course, I couldn't wait to find a place to mine. Entering Miner, I found a place with R1Miner, and the other two places were related to U3 (U3 is a small computing power mining machine with a USB interface launched by Ant). What does this mean? After asking the staff, I learned that there is a USB interface on R1, and U3 can be plugged into it to control U3 mining. Because before, U3 could only be used to mine with a computer, and U3 would stop working when the computer was turned off. Using R1 to mine with U3 would save power and be much easier.

I suddenly realized that R1 not only serves as a quiet router, but also as a U3 manager. It seems that Bitmain is not as idealistic and naive as the team mentioned at the beginning of this article, but is more practical.

OK, I don't have U3, so let's take a look at the mining capabilities of R1. After a careful study, I found that it is not the same as the mining machine that everyone usually understands. It has a computing power of 5G, but only supports Solo mode mining (independent mining, the probability of mining Bitcoin is proportional to its own computing power), and does not support the usual mining pool mining (collective mining, mining Bitcoin and everyone shares it equally). This can't help but make people laugh. According to today's mining difficulty, 5G computing power basically has no possibility of Solo mining a Block. I posted a Weibo saying that I am using 5G computing power to Solo mining, and some netizens replied that the probability of mining a Block is one in 100 million, and it will take 2000 years to mine Bitcoin.

However, even if it supports mining in a mining pool, 5G computing power is not very useful, because the mining machines used in large mining farms often have a computing power of more than 1T. In comparison, R1 is just a small toy. I used a 2G USB mining machine to mine in a mining pool some time ago, and the conclusion was that it was meaningless. It was difficult to even assign tasks - it was not as good as Solo. At least there was a thought there. What if I was lucky enough to mine a block and get 25BTC? Haha!

Netizens' comments on my Solo mining

It is also worth mentioning that the mining chip built into the R1 is BM1384 (the chip used by Antminer S5). It should have a computing power of about 20G. Why is it downclocked to only 5G on the R1? The answer is also very simple. In order to reduce power consumption, if it is to run at full speed, it must be equipped with an active cooling fan. The shell of the R1 is fully enclosed. After starting mining, the body will still heat up significantly, but it has not been seen to overheat and crash after long-term operation.

In short, R1 is just a router. Don’t think of it as a mining machine. Just keep it in mind and show that you are a participant in the Bitcoin world.

The mine’s self-destruction mechanism and my ideal green mining

Today, there are no home miners or office miners anymore. Almost 100% of the mining power is in the hands of a handful of large mining farms, which is completely contrary to the idea of ​​Bitcoin decentralization. If this continues, I think it won’t be long before no one cares about Bitcoin, even if the market doesn’t return to zero.

Fortunately, Bitcoin mining has a self-destructive mechanism, which is the limit of the ratio of electricity price to chip energy consumption. From 2013 to now, domestic large miners have moved to Inner Mongolia, Huainan, and Sichuan, looking for low-cost electricity everywhere, because as the difficulty of mining increases, the mining income and electricity costs are getting closer and closer. However, the difficulty has been rising, the income is getting smaller and smaller, and the miners cannot find cheaper electricity. When the income is less than the electricity cost, it is the deadline for the large mines.

Of course, destruction is not necessarily a bad thing. After destruction, what follows is likely to be rebirth, and a new mining model will naturally emerge. So I think that both 21 and this Ant router represent a new school of Bitcoin mining. If the mining model of large mines ends, the new mining model must be "green mining" such as 21 and Ant router. My ideal future Bitcoin mining is "green silent mining" that exists in computer motherboards, routers, mobile phones, and various IoT devices. These devices have mining functions, but this is not their main business, and mining in silent state will not affect the user's experience. Look at the mining machines in the large mines. The fan noise is like a helicopter. Because the heat is too high, industrial fans are needed to dissipate heat. The user experience is too poor. The disappearance of home miners is also related to these.

People use these devices in offices or public places and do not need to pay extra for the electricity used for mining. It is appropriate to call it "green mining" - if you say it is stealing electricity for mining, I would admit it, but the electricity bill is very small because it is widely shared.

As for the machines in the big mines that can only mine, I don’t know what their value will be in the future. Some netizens joked that if our descendants found a mining machine during archaeology thousands of years later, they would never guess what our ancestors used it for.

Of course, it is not so easy to realize the ideal I mentioned. At least the total computing power of "green mining" equipment must reach the same level as that of existing large mines. According to the previous calculations, at least hundreds of millions of "green mining" equipment are needed. It seems that it is still very unlikely to achieve this goal.

So much for idealism, although Bitcoin itself is full of idealism. In the short term, it is unlikely to make a profit by relying on "green mining" equipment; but these little toys lower the threshold for participation, bringing a sense of participation to those of us who care about Bitcoin but don't have the energy and financial resources; and they have functions other than mining, avoiding the tragic ending of becoming waste after the computing power increases, which is a good trend. Isn't this what decentralization means?