[Comparative Interview] President of Cypherpower: The bear market is a great time to build infrastructure; the mining industry is moving towards innovation and rationality

From the big migration of miners “going overseas” to cryptoBEARISHCrypto mining companies have been experiencing various challenges, including continuous compressionprofit margins。

However, industry expertsYawei (John) Yang said in comparison that this wave of market downturn is not enough of a threat to players who do not use excessive leverage.A bear market is a great time to build infrastructure. Once the infrastructure is ready, it is equivalent to “breaking the bottom.” If you look at the long-term outlook, the profits of crypto mining are still very impressive.

Yawei (John) Yang is a Web3 investment,BitcoinMiner service and solution providerCypherpowerThe president obtained a doctorate degree in robotics and automation control from the University of Wyoming in the United States. He was introduced by the Chinese Academy of Sciences's “Team Talent” program in 2013 to conduct research on robotics and automation technology. CypherPower was founded in 2016 to provide a one-stop solution for all types of miners. John was recently interviewed by Twitter and discussed a series of topics such as the two mining summits he recently attended, the crypto market, industry sentiment, and prospects.

Miners remain optimistic

Bitcoin is currently trading at around $23,900, up about 3% over the past 24 hours. Despite this, the broader crypto market has been in a slump for several months, with Bitcoin falling 65% from its all-time high of around $69,000 in November 2021.

Meanwhile, the Russian-Ukrainian war is unresolved, inflation remains high, and energy costs have reached record highs. Lower Bitcoin prices and higher energy costs are compressing miners' profit margins, and some miners are having to sell Bitcoin at current prices to contain the risk of volatility and maintain operations.

John said in comparison that big miners are rarely afraid. He said, “Everyone made a lot of money last year, and the base is still very strong. Overall, the pride is still there”.

As a veteran industry participant, John attended Bitmain's World Digital Mining Summit (WDMS) and Miami respectivelyMining DisruptHe said, “The venue was very lively. Miners from all over the world came. South America, Europe, Africa, etc. didn't feel the atmosphere of a bear market.”

John explained, “The cost is much lower now, and without leverage, it's a great opportunity to enter the market. For example, Bitmain's 19 series has an operating cost of about 15,000 US dollars to 16,000 US dollars if the electricity bill is 8-9 cents/kilowatt-hour. Although the payback period takes 1-2 years, everyone is still optimistic.”

Comparing previous reports, it is one of the largest publicly listed crypto mining companies in the USCore ScientificAlmost all of the bitcoins were sold in June to maintain operations. When asked why this happened, John said that the company faces this risk if the leverage used by the company is too high.

He said, “Some American companies are very good at using financial leverage, and it is normal to run into difficulties. If the leverage is high, the currency price will drop from 60,000 US dollars to 20,000 US dollars, and it will definitely explode. In a bear market, as long as the leverage is not high, the damage to miners is still relatively small. As long as miners don't play with so many financial products, there's no problem at all”.

John mentioned,The bear market is a great time to build infrastructure. Building infrastructure, mining rigs, and power plants. Achieving this is equivalent to “breaking the bottom”。

Green energy, sustainable development - the mining industry is more rational

John said in comparison that for participants in the mining industry, when the market falls, it is an opportunity to fill up positions and layout, and participants are all doing long-term development in a more rational manner, such as green energy, carbon reduction, cost reduction, and compliance.

He said, “I think this is a good direction for development because of the bull market in the past, everyone was stealing time, and no one thought about it. But now everyone is thinking about how to continue to develop, be accepted by the public, and find ways to get rid of stigmatized things.”

Comparing to previous reports, in mid-July, a group of Democratic lawmakers sent a letter to US President Joe Biden urging the government to limit the environmental impact of mining and implement stricter energy usage reporting requirements for crypto companies.

The letter notes that after the Chinese government banned crypto trading and mining, America's share of global mining activity has increased from 4% in August 2019 to nearly 38% in January 2022.

Traditional fossil fuel-burning mines are no longer accepted, and people are paying more and more attention to garbage burning, wind energy, solar energy, hydropower, and nuclear power.

John said, “I think the industry is starting to rationalize. Everyone is starting to plan for the long term. Instead, in a bear market, everyone has time to think about this; in a bull market, they all think about how to cash out quickly. This is a healthier development, which is meaningful for the long-term development of the industry.”

Cypherpower, founded by John, mainly promotes water cooling technology, similar to computer CPU water cooling radiators. The coolant takes the heat out, and the external circulation then discharges the heat. In addition to greatly reducing noise, maintenance costs will also be drastically reduced.

The picture below shows the water-cooled conversion kit that Cypherpower exhibited at the summit. It is prepared for the S19 Pro, with a 7000w water-cooled power supply, 70% overclocked, and a pre-sale price of $750.

Cypherpower is also exploring ways to recycle the heat generated by mining machines, such as greenhouses, home heating, etc.

Bloomberg previously reported that ExxonMobil, one of the world's largest oil producers, is running a pilot program to use surplus natural gas to power US Bitcoin mining operations, and the oil giant is considering similar steps in Alaska, Nigeria, Argentina, and Germany.

John said, “These innovations are all very refreshing. The mining industry's sense of social responsibility and technological breakthroughs have all reached a very rational stage.”

The US continues to be the world's mining center

According to data compiled by Cambridge researchers, the US is now the world's largest Bitcoin mining center, accounting for about 37% of the global hash rate.

In addition to Texas, the most popular mining destination, Oregon, Atlanta, Ohio, and North Carolina are popular bases for North American miners.

John said in comparison that there are three reasons for the development of the US mining industry. One is that the policy is stable; the second is that financing is easy and there are many channels, and there are many listed mining companies; and third, the loan environment is very good, and there is a lot of innovation. “There is no doubt that America will continue to be the mining center of the world, and the best machines in the world will definitely come to America,” he said.

John also mentioned that American miners are also expanding to other countries to seek cheaper electricity and resources.

When asked when we'll see the next mining boom, or the crypto bull market, John said:“This year is still dominated by low tide, and it will start to rise next year. No one can say for sure when the bull market will come.”

Author: Comparing Mary Liu

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