Fengshui Research Report: Mining is just a financial management product for small miners
“Small miners like me only need to pay the money, pay the electricity bill, and wait to split the money. Even big customers will do this in the future.” Miner Mr. Huang said this in an interview with Bibi News. For some small miners, in this market, mining as a side job is an easier choice. Several research reports in Sichuan, which have frequent policy actions, have pointed out that Chinese miners control more than 65% of the world's Bitcoin computing power, so events such as Bitcoin prices, electricity prices, policies, and halving have profoundly affected domestic miners. From last year to this year, in Sichuan, where more than 50% of the country's Bitcoin computing power is concentrated, mining-related policies have continued to be heard: - In December 2019, Ganzi, Sichuan urgently introduced a work plan to clean up and rectify Bitcoin mines, urging power generation companies to prioritize the guarantee of standardized indicators and social electricity supply during the dry water period. -From April to May 2020, Sichuan announced the first batch of “hydropower consumption demonstration enterprises”, which include multiple mines. This is a rare local government policy to clearly support mining during the flood season since 18 years. -In May 2020, the Sichuan Finance Office issued a notice requiring enterprises to withdraw from virtual currency mining to all counties and cities to avoid risks such as investment speculation, illegal fund-raising, and pyramid scheme fraud related to “mining.” -In June 2020, the power systems in the two provinces of Sichuan and Yunnan emphasized the protection of compliant mines and cracked down on direct power supply mines. It's no exaggeration to say that mining policies change day by day, and every change in policy stirs up miners' nerves. Uncertainty about mining policies is fatal to every decision made by miners and mines, including whether to choose to turn off the mining machine or keep the mining machine running, whether to migrate with the mining rig or mine in situ. However, the mining policy issue is clearly a protracted battle. Mr. Huang revealed to Bibi News that according to a document, the country will pay more and more attention to this issue and continue to introduce relevant policies to supervise the mining industry. After all, uncertainty mining during the flood season is an activity that depends on the sky. Policy uncertainty is plaguing miners, and even during periods of largely regular abundance, there is great uncertainty. In 2019, the mining industry experienced a “fake flood season”. Tian Xin, co-founder of Ant Mining Pool, recalled the flood season in 2019 during this year's online event. He mentioned that there was no rain in many parts of Sichuan at the time, and there was no water, so there was no electricity. Later, there was torrential rain. There was too much sediment in the river, causing the equipment to not generate electricity properly, causing the mining machine to shut down continuously. This weather situation is basically a disaster for the mine. In fact, the delay in abundant water, torrential rain, and geological disasters in 2019 caused huge losses to miners. A video posted by the Coinprint Mining Pool on Twitter shows that at the time, some Bitcoin mining sites in Sichuan were affected by floods, to varying degrees. Local media have reported that Aba Prefecture in Sichuan was hit by torrential rain, and landslides affected 17 counties in the area. Mr. Huang told Bibi News that according to some estimates, every day the mining machine is shut down, the mining payback cycle may increase by one month. “Generally, the electricity bill is more than 2 cents, but in the case of mining machine failure, extreme weather, etc., the recovery cycle of the mine will be lengthened. If cheap electricity is missed, the average electricity bill in the mine will rise to more than 4 cents or even 5 cents.” It's too difficult for retail miners. Miners face so much uncertainty in mining, and retail miners are also very helpless in the face of the trend of specialization and scale in the mining industry. Hu Donghai, another miner interviewed by Bibi News, said that the large-scale mining industry, or even joint mining, will become more mainstream in the future. Among them, cooperative relationships between mining machine investors and mining machine manufacturers may be more common, and for ordinary people, it will be more difficult to enter this market. “Mining is becoming more specialized and large-scale, making it difficult for retail investors to participate, and there are more and more pits.” A miner mentioned the thunder he stepped on in an interview with Bibi News. When he hosted the mining machine in Yunnan, he experienced situations where mine owners tried their best to reduce the deduction power. The mine owner claimed that the mining machine was shut down on the grounds that the mining machine needed maintenance, policies, power supplies, etc., but due to geographical barriers, the miner was unable to know the actual situation at the mine, which caused him some losses. The miner told Bibi News that now, affected by Bitcoin's halving and rising computing power, they are moving the mining machine to a place where electricity costs are lower, and now they can only shut down again. Electricity prices are the essential problem. Retail miners definitely can't compete with big miners in terms of mining machine computing power, and even if the mining difficulty is reduced, I'm afraid it won't save retail miners. According to BTC.com information, the difficulty of Bitcoin mining was lowered from 15.14T to 13.73T on June 4, a decrease of magnitude...
