The ecology and prediction of PoW projects under the halving of dry goods

On February 13th at 20:00, the 49th BlockMania AMA live broadcast continued. The theme of this issue was "Ecology and Forecast of PoW Projects in Half the Market" , and the guest was Ryder, CITEX PoW project leader.

Disclaimer: This article represents the views of guests and does not constitute any investment advice.

The following is a full review of this AMA

Can you tell us about the mining ecology? Will this epidemic affect the development of the mining industry in the short, medium and long term?

OK, answer the first question first. Investment and mining will be more stable compared to mining. After all, there is a certain amount of physical support. In principle, mining is a stable fixed investment and bets on the long-term trend; so the development of mining in China is in full swing.

After so many years of development in the mining industry, with the elimination of small miners, it has developed into a large-scale, centralized, and monopoly industry. Mining machine manufacturers will certainly provide various financial derivatives tools and services to users in the future.

To answer the second question, I saw a sentence some time ago: humans have been putting animals into cages. In the Spring Festival this year, animals successfully put one billion people into cages. From this sentence, we can clearly feel The epidemic has a great impact on the domestic economy, especially small and medium-sized entities. I hope the epidemic will pass as soon as possible;

Mining is roughly divided into two components, mining and production. The mining industry is not a personnel-intensive industry. Many mines with thousands of mining machines require only a few or a dozen operation and maintenance personnel (two or three shifts). Down), and the mining pool is already operating 24 hours a year, the epidemic situation will have a certain impact on the operation and maintenance of the mine and the maintenance of the mining machine, so the short-term impact of the epidemic on the mining industry is relatively small.

The epidemic has a very large impact on production and logistics. Many mining machines and related companies cannot resume work, and logistics is also facing strict scrutiny. Therefore, the short-term and short-term impact of the epidemic on mining machine manufacturers will be significant; Slow, in the short term it is good for existing miners.

Compared with the epidemic situation, the short-term impact of currency prices on mining is greater. In addition, with the compliance of the mine, business management, taxation, etc., the mining cost of mining is definitely higher than before. The concentration of mining will also have an impact.

Bitcoin reward halving is a topic that the whole industry is more concerned about at present. Judging from the previous Bitcoin halving market, can the current trend be judged as a new stage of the industry?

This chart analyzes the previous BTC halving market and predicts the trend of this halving market; according to the historical law, each time the halving, BTC has a rising market.

Whether the halving will bring a big bull market to 2020 is difficult to accurately predict, but the hot spot on the market recently is halving the price of PoW projects, we must seize it;

The investment suggestion is to pay attention to the halving of big currencies such as BTC, and pay more attention to PoW small coins. Due to the small market value and undervalued value, the explosive power will be stronger.

Still have to remind that investment needs to be cautious, for small funds to win high returns, because high returns mean high risks.

Can you briefly introduce the PoW mechanism, will all PoW consensus mechanisms be halved? Why do we have to halve this design? What are the characteristics of PoW's mining coin economic model?

Answer the first question first. The PoW mechanism is called proof of work. In short, it is based on your proof of work, such as the contribution of mining, to perform currency distribution. PoW currency is generally halved, and it will be halved multiple times. .

To answer the second question, we believe that the success of a project can be measured in three dimensions: value manifestation, that is, application landing; economic model, that is, release mechanism; and community size. As the originator of PoW, Bitcoin is excellent in all three aspects.

The halving is a delicate design in the economic model. The halving is mainly to avoid long-term inflation, and to control the supply to make bitcoin more conducive to rising. Refer to the figure below.

To answer the third question, the characteristics of the mining coin economic model are that the primary market (issuance market) is all derived from mining, and the miners are profit-seeking, which will make the mining cost approximate to the current currency price, that is, each The cost of a coin fluctuates with the price at each moment. Unlike fund-raising projects (the project and investors hold a lot of low-cost coins), the distribution of mining coins' chips is more fair and more dispersed.

Now the economic model of the coin is also evolving, and it is evolving in a way that is more conducive to the stability of the price of the coin and easier to spread. For example, some coins will launch the function of Masternode Hosting, which is to pledge a part of the currency, rent a VPS, build a master node, and provide services to the network on the consensus layer. The block is generated every block. Part of the reward will be allocated to the master node.

In this way, the master node provides services in the fields of stabilizing the network, preventing double spending, or anonymity, and obtaining rewards, which is a healthy cycle for the entire token system.

In addition, there are also mortgage mining methods to allow holders to obtain more, which can be considered as an innovation and experiment in the economic model.

Last year Staking was a hot topic that everyone paid attention to. What is the difference between PoS and PoW? How to see the rotation of hot spots in the industry? How long will PoW lead the market and the market?

First answer the first question. At present, digital currencies are roughly divided into two camps, namely PoW coins and PoS coins. PoW is called proof of work and PoS is called proof of equity. In the analogy of the image, PoW means distribution according to work. With more work, PoS is allocating money, and money makes money.

Let ’s answer the second question. With the user ’s in-depth understanding of the core logic of PoW, we predict that most projects in the future will follow the PoW route, because the distribution mechanism is reasonable and the degree of decentralization is higher.

With the halving of the market, PoW has led the market. Recently, BTC, BCH, ETC, etc. have begun to become the leader and started to rise. I believe this year will be a big year for PoW.

Can you share the current market situation and community activity of PoW?

According to market value, mining coins are divided into large mining coins (BTC, BCH, BSV, ETC, etc.) and small mining coins.

CITEX has devoted all its energy to the research of mining coins since January 2019. The main focus of small coins is to gradually bring them into the mainstream.

The community of mining coins continues to grow, and users gradually realize that the output of each coin of mining coins is supported by costs. Compared with a part of ERC20, most of them are concentrated in the hands of the team, the rules can be changed arbitrarily, etc., the coin model is still more healthy.

There are more and more users who recognize mining coins. This halving of the market allows more people to realize the advantages of mining coins, so the mining coin circle is also continuously expanding.

What do you think a good PoW project should include, and what are the judgment factors for investors?

We think that there are two types of good PoW projects. One is undervalued; the other is a project that has actually landed or solved an existing problem, such as a combination with a game. With the launch of the game, use scenarios Will greatly increase; there are also functions that can achieve anonymous stablecoins, and are committed to making a decentralized oracle.

Analyze the strengths, weaknesses and core values ​​of a project, mainly to see if the value of the project is underestimated, whether it has actually landed or solved the existing problems, and also pay attention to whether the distribution mechanism is fair, whether the community consensus is strong, and whether the technical capabilities are strong.