Bitcoin halves the mining circle to stage a battle royale, 45 miners reach the shutdown price

In the early hours of May 12, Bitcoin ushered in the third halving in history.

Overnight, 45 types of miners have reached the shutdown price, and they will lose money when they are turned on. The price of the S9, the king of the first generation, fell to 100 yuan.

After halving, the mining industry ushered in a life and death situation. Some mine owners sold the mine and withdrew from the mine circle. Some miners are clearing machines. At the same time, some people are bargain-hunting and filling mines.

For big players, you can still find some means of survival.

And those little players? “After the halving, it’s time for the little miners to say goodbye.” Some miners said.

01. Shut down

Halve and shut down.

In the early hours of May 12, Bitcoin completed its third production halving. At the same time, Sichuan Bitcoin miner Wang Baoguo turned off a large number of his mining machines.

Most of these miners are Ant S9, which was launched in 2016.

In the mining circle, Ant S9 used to be the king of a generation, occupying 70% of the computing power of the entire network, but now S9 is withdrawing from the stage of history.

According to F2Pool data, at a rate of 0.3 yuan per degree, the S9’s electricity rate accounts for up to 140%. This means that a day after the S9 is turned on, the miners will have a net loss of 2.67 yuan.

“Now, only if the currency price rises to 15,000 US dollars, mining with S9 can not lose money.” Wang Baoguo said.

A month ago, he started looking for buyers for the S9 in hand, but no one has taken over so far.

“Even if there was a mining accident and the price of the mining machine plummeted, some people would still buy S9. Most of the people who received it were the owners of the big mines. When the currency price picked up, they could dig themselves or sell them to others to make the difference. “Wang Baoguo said.

This time, S9 had little hope of turning over. “Unless the currency price rises to US $ 20,000 this year, speculation on S9 is a dead end.”

Also in Sichuan, mine owner Zhou Wenbo sold his mine.

In 2018, Zhou Wenbo entered the mining circle and built his own mine in Yibin, Sichuan. At most, his mine had 8,000 mining machines roaring day and night.

However, just one week before Bitcoin halved, he sold the mine. “Even the transformers were sold. Six units sold a total of 600,000.”

Buyers who take over the mine are reluctant to purchase his second-hand mining machines, such as Ant S9, Avalon 852 and Xindong T2.

These mining machines are the main models of the mining circle in 2016-2018, and the computing power is between 13T-17T. But in the current mining circle, they are already outdated.

F2Pool data shows that even with the low electricity cost of 0.25 yuan / degree, all three models of miners have reached the shutdown price.

“This is halving.” Wang Baoguo said, “The cost of electricity is unchanged, and the revenue is directly cut. The mining machine that made money yesterday was today a loser.”

After this bitcoin halving, the shutdown price was reached far more than the above three types of mining machines.

F2Pool data shows that as of May 14th, according to the electricity cost of 0.35 yuan / degree, there are 45 types of mining machines reaching the shutdown price, accounting for 49% of the total number of mining machines.

There are many new star mining machines that have been on the market in the past two years, such as Bitmain ’s first-generation 7nm mining machine Ant T15, and Jianan ’s 2019 main model Avalon A1066.

Even the current ant S19 Pro, which has the best energy consumption control and sells for up to 20,000 yuan, accounts for 48% of its electricity bill. Based on this calculation, the payback period of this miner exceeds 600 days.

When mining becomes unprofitable, the computing power of Bitcoin’s entire network will naturally fluctuate.

Bitcoin block data shows that since 3 am on May 12, the rate of Bitcoin block production has dropped significantly.

In the first 24 hours after halving, the Bitcoin network produced 137 blocks; in the second 24 hours, the Bitcoin network generated 132 blocks. On the 7th day before the halving, the Bitcoin network produced 180 blocks per day.

BTC.com data shows that if bitcoin’s block speed is used as a backward parameter, the estimated hashrate of Bitcoin on May 14 is 95EH / s, which is down from 115EH / s on May 5. 17%.

The reduced 20EH / s computing power of the whole network is equivalent to the sum of the computing power of 1.53 million ants S9.

“Half this time is too cruel for the mine circle.” Zhou Wenbo said.

 

Faced with halving, the miners began to struggle to survive.

In the mining circle, there is buying and selling. Zhou Wenbo sold the mine, and Wang Baoguo was selling the mining machine. So, who is the person who takes over or may take over their business?

Wang Baoguo said that before the halving, the price of a second-hand S9 was around 200 yuan, and after halving it fell to 100 yuan, directly halving.

He revealed that although S9 is extremely difficult to shoot, there are indeed people in the mining circle taking over S9.

The receivers are mostly large mine owners.

Their purpose is to fill the “base load” with a cheap S9.

In Sichuan, Yunnan and other places, when many mines cooperate with power plants, they will stipulate a basic load, that is, a certain degree of electricity must be used up every day-even if they are not used up, the mine must pay according to the contract.

“Investment investment in mines is extremely difficult this year. Many new mines cannot find miners at all, and even the base load is not filled. In order to fill the load, some mines may take a small amount of S9.” Wang Baoguo said.

The other trend of S9 is to use “free electricity” to mine miners.

“The electricity used for mining is” free electricity “, but now,” free electricity “refers more to mining with” abandoned water and electricity “. Chen Hanping told a blockchain.

Abandoned water refers to letting the water that was supposed to generate electricity flow away in vain; electricity generated by using abandoned water is abandoned water and electricity.

The causes of abandoned water are very complicated. In most cases, water abandonment is caused by the imbalance between the supply and demand of electricity, that is, too much electricity is generated and too little electricity is used, so the hydropower resources are wasted.

Obviously, Bitcoin mining can solve this problem.

“Some mines in Sichuan and Yunnan have a background in hydropower. For them, mining with abandoned hydropower is equivalent to using free electricity.” Said Yu Ming, owner of the Yunnan mine.

Nowadays, the dilemma caused by the halving of Bitcoin output is making many miners follow the ice.

“I sold the mine before the halving was considered good luck. After the halving, the mine’s situation will be more difficult, and many mines will not be able to recruit customers.” Zhou Wenbo said.

He explained that in terms of computing power, S9 and other old mining machines account for a small percentage of the computing power of the entire network; however, according to the number of mining machines, their holdings in the mining circle are still very large. The outage of the old mining machine left the mine site with nearly half of its customers.

However, even the miners who use large computing machines are in a very difficult situation.

“Almost all mines in our mine are large-power computing machines with 50T or above, but now they can only run in low-power mode.” Yu Ming said.

In the low power consumption mode, the computing power of the mining machine will decrease, but the power consumption of the mining machine will drop more. “Miners earn less, but electricity costs are even less.” He explained, “This is also one of the miners’ means of winter.”

Compared with small and medium-sized miners, large miners and mine owners have a stronger wintering ability: during the flood season, small and medium-sized miners receive more than 0.35 yuan per watt of managed electricity, while large miners and mine owners from power plants The electricity price obtained is often below 0.25 yuan per degree.

If large miners can get an electricity price of 0.2 yuan per kWh, even mining with old S9 mining machines is still profitable.

In addition, the big miners have more means of survival.

Recently, a mysterious “roadside mining pool” (lubian.com) appeared in the mining circle, and its computing power once reached the top five in the entire network. It is speculated by the outside world that the large probability of this mine pool was jointly established by several large mines and large miners.

“Self-built mining pools can save about 3% of the mining pools. This may also be one of the big miners’ means of self-help.” Yu Ming said.

But at the same time, he also confessed that at present, the big miners are inevitable anxiety.

“According to the current currency price, electricity price, and mining difficulty, even if the latest machine such as S19 is used for mining, it will take at least 500 days to pay back. What will happen in these 500 days? No one can say.”

Faced with uncertainty, miners mostly choose to wait and see.

“Now that we continue to attract foreign investment, our machines will not shut down or sell, and stay on the sidelines.” Yu Ming said.

The mining circle is waiting for the first mining difficulty adjustment after halving-after some mining machines are turned off, the probability of bitcoin mining difficulty will be lowered.

Only when the difficulty is lowered can the income of the miners be expected to improve.

03. Future

Many people in the mining circle told a blockchain that they need to pay attention to the leverage of the mining circle.

“Now the mining circle has been financialized. Many miners not only do hedging, but also use various mortgages to expand investment. Excessive leverage may cause some miners to burst out of positions.” Miner Zhang Heng told a blockchain.

In the mining industry, the income of miners is Bitcoin, but the cost is paid in fiat currency. Some miners are determined to hoard coins, not willing to sell coins, but choose to mortgage bitcoin to obtain loans to buy mining machines and pay for electricity.

In other words, miners are overdrawing Bitcoin’s future earnings to cover today’s expenses.

In this regard, the US blockchain media Decrypt throws a view: after bitcoin production is halved, the United States may replace China and become a global mining center.

In recent years, North American mining has indeed been rising. In the past two years, blockchain companies Blockstream and Data AG have entered the United States for mining. The scale of their mines has reached 300MW, which is equivalent to a medium-sized thermal power unit.

“The two major advantages of mining in North America are cheap electricity prices and clear laws. Our electricity prices in the mine are 2.5 cents a year, which is less than two cents in RMB, which is similar to the electricity price in Sichuan’s Fengshui period.” The Chinese miner Mark of the mine told a blockchain.

Decrypt pointed out that compared with the United States, Chinese miners have higher leverage. After Bitcoin is halved, the income of miners will be halved, but the cost of electricity and other costs will remain unchanged.

This means that one day, the money borrowed by the miners mortgaged Bitcoin will not be enough to cover the cost of electricity and other costs.

In addition, if Bitcoin plunges, excessively leveraged miners may “crash.”

However, some people do not agree with Decrypt’s point of view.

Yu Ming pointed out that leverage is not a common phenomenon in the Chinese mining circle. In recent years, some new miners with power and manufacturing background have entered the mining circle with a lot of funds. Compared with the old miners, they have less leverage.

The policy environment of China’s mining industry is also improving. Recently, many governments in Sichuan have held seminars or issued documents, and began to give mines “name points” in the name of the blockchain industry to guide mines to consume hydropower, especially abandoned hydropower resources.

There is no doubt that after the halving, Bitcoin mining will inevitably fall into a downturn.

Can refer to the fate of BCH and BSV. On April 8th and 12th this year, BCH and BSV completed their halving, respectively, and their computing power flowed into Bitcoin in large amounts, and the computing power of the entire network plummeted.

After the halving of Bitcoin, the computing power of BCH and BSV has rebounded, but it has not returned to the level before the halving.

 

“In a few more halving cycles, there are fewer and fewer BTC mining unions.” Liu Changyong, founder of Zhimi University, wrote on Weibo.

“For Bitcoin, this halving is a milestone.” Mehmood, the co-founder of Block Ledger, tweeted, “The ‘child’ has grown up and no longer needs the support of amateur players. Institutional mining will Will rise, and even the most die-hard little miners will be in crisis. The future will be more interesting. ”

On January 3, 2009, in Bitcoin’s genesis block, Satoshi Nakamoto recorded the title of the front page of The Times for the day: “The Minister of Finance is on the verge of implementing the second round of bank emergency assistance.”

In the early hours of May 12th, 11 years later, someone recorded the title of the April 9th ​​article of the New York Times in the last block before Bitcoin halved: “Injecting 2.3 trillion US dollars, the Fed rescued the market far beyond the scale Year 2008.”

This move is considered a tribute to Satoshi Nakamoto. In 11 years, time has come and gone, and digital currencies have risen and fallen from scratch.

Different from the undercurrent of the mining circle, in the early hours of May 12, there was almost no wave in the currency circle. There were no large fluctuations in currency prices, no crazy discussions by players, and nothing seemed to happen.

But everyone knows that for Bitcoin, a new era has begun.

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