The difficulty of BTC mining hits a new high. Is the miner optimistic about halving expectations and continuing to increase? Still riding a tiger?

At 5 am on January 2, 2020, Bitcoin completed the latest mining difficulty adjustment at a block height of 610848. The latest difficulty was raised to 13.80T, which is 6.57% higher than 14 days ago, that is, December 20. Hit a new high in ten years.

Bitcoin mining difficulty adjustment chart

▲ Source

If the halving market does not materialize …

On October 26, 2019, the bitcoin price fell after reaching a high of $ 10,325, and on December 18, it fell to as low as $ 6435. Since then, anxiety and anxiety have started to appear widely in the media and the cryptocurrency community. Does the halving market exist? Will Bitcoin fall back to $ 3,000? Whether miners will surrender is widely discussed.

Among them, the problem of miners' surrender is particularly prominent. The view is that when the price of Bitcoin continues to fall and falls below the cost line of mining Bitcoin, miners will first sell Bitcoin and then be forced to shut down. This situation will be the first to appear in the group of small and medium-sized miners with low mining efficiency and high cost.

Bitcoin is currently trading at $ 7,100. According to incomplete statistics, bitcoin's current average mining cost line is 6,000 US dollars, that is, a bitcoin still has about 14% of revenue.

However, assuming that Bitcoin will continue at this price until May 2020, when the third halving occurs, if the mining cost is unchanged, the profit will be only about $ 3,500 after half the discount, which will be much lower than most miners Mining costs. This means that most miners will definitely stop and surrender.

Suppose Bitcoin fell below $ 7,000 again, and then accelerated to fall below $ 6433 before falling all the way, and the consequences are even worse. According to the official website of Yinyin, the price of the M20S 68T version of the Shenma mining machine shuts down at about 0.38 yuan per kilowatt-hour, which is about $ 3,416, which is already the top five "artifacts". $ 3,155 .

The difficulty of bitcoin mining hits record high. Is this "unwanted"?

However, judging from the changes in the difficulty of bitcoin mining, in 2019, bitcoin experienced a total of 26 difficulty adjustments, of which 7 were negative and 19 were positive. The mining difficulty was 5.62T on January 1, 2019, and 12.95T on December 20, 2019, and the annual difficulty increase was about 130%. The computing power rose from about 40E at the beginning of the year to about 100E at the end of the year.

Does it mean that even if Bitcoin is currently oscillating between $ 6,500 and $ 7,800, miners still use actions to indicate that they are optimistic about the future price performance of Bitcoin, continue to launch mining machines, and push up computing power?

Pan Zhibiao, founder and CEO of Coinprint Mining Pool, told Babbitt that there is a 2-3 month shipping cycle for futures miners. The current increase in computing power indicates that the computing power of the previous 3 months has just been released, and precisely, the latest The growth of computing power should be relatively slow. However, Pan Zhibiao also said that some miners are optimistic and continue to invest in a small amount.

According to Yu Yang of the Mining Association, these increases in computing power also come from the operation of a number of new mines, which require the addition of mining machines to mine. In addition, Pan Zhibiao said that the new miner is online.

In addition, the current market is not very optimistic, and miners will also choose to send unsold machines to the mine for mining.

The above three situations are all passive increase of computing power. Does this mean that the increase in computing power behind the last two difficulty increases is a bit “unreasonable”? After all, just 3 months ago, the price of bitcoin was still $ 10,000, and market sentiment was high. It was a surprise to some extent that it suddenly turned cold.

Bitcoin price chart 2019

▲ Bitcoin price chart (from QKL123)

Bitcoin halving is approaching, mining has its magical powers

Xu Wei is a big bitcoin miner. I asked him if he is super optimistic about halving expectations. "Not optimistic," he said. However, his strategy now is to continue to buy low-power machines in large volumes. "The cost of our machines is low, and the price of electricity is low. We are looking at the long-term. We hope that the price of the currency will fall and the people entering the market will choose to wait and see . We care about production . "Obviously, there is no such thing as" miner surrender "here.

Finally, he advised me to use collateral to buy machines for mining, because most people are pessimistic when it comes to entering the market. "I'll finish the old iron when I'm done." This sentence made me smile, this is a very mine circle.

After an interview, I also found that, even if there is still about 5 months to go before the halving, the upgrading of new and old miners by miners is currently underway.

Yu Yang ’s strategy is also very interesting. He said that currently he mainly holds high-power mining machines, because he wants to complete the mining machine recovery before the halving cycle. He believes that if it is not possible to recover the mining machine before the halving cycle, it is better to directly Buy coins. After halving, even if the price of Bitcoin is "not beautiful", it will still be profitable at the cost of electricity.

But he is obviously more pessimistic about the halving market. He said that most miners do not have many strategies, and mining disasters will definitely happen, and it is terrible, but everyone is betting that it will not happen to themselves.

In the recent chain node AMA, Pan Zhibiao said that mining unions use financial instruments such as hedging and options to deal with extreme situations, but Bitcoin mining has never been a stable and profitable business. After halving, assuming that the price of bitcoin does not rise and some miners have a problem with the capital chain, this is an inevitable thing. But he said, " Carry it, it will be the hardest time, there will be no surrender, that is, the return on investment will be worse, don't invest in transition."

Shao Jianliang, the general manager of Jianan Yunzhi Blockchain, does not believe that a super mining disaster will occur. He believes that it must be a game between some smart miners and some miners with no concentration .

It can be seen that Bitcoin mining is quite diverse and complicated, and different players are gradually layering and dividing. But at present, it is not yet a very pessimistic moment, after all, the boots have not yet landed. Revenue per T

▲ Bitcoin revenue per T (from QKL123)

I have to say that 2020 may be difficult. If you look at the per-T hashrate gain, this data has been declining over the past decade. Today, the income per T-day is about 1 yuan. Take Shenma Mining Machine M20S as an example, the daily income of its 68T version is about 68 yuan, and at the cost of 0.38 yuan per kilowatt-hour, its net profit is 32 yuan (electricity accounts for about 38%). Based on the current price of about 9,000 yuan (previously the price of this machine can reach 20,000 yuan), the current payback period is 281 days. This is indeed inferior to the miner at the peak. This is not the ideal "currency speed", but what kind of investment can have a return period of 281 days?