In the previous article, “Bitcoin Mining Knowledge and Benefit Analysis” , we introduced Bitcoin mining knowledge to investors who have not yet touched Bitcoin, especially those outside the circle. These include the background and vision of bitcoin production, the trend of Bitcoin in the past 10 years, and the forecast of currency price trends in the next 2-3 years, whether it is the golden age of digging bitcoin, etc.
Next, we use the historical data and charts to further analyze the BTC mining industry. We intercepted the difficulty change of each bitcoin difficulty cycle (about 14 days) since April 27, 2017, and intercepted the bitcoin price data for the same period based on the time node of difficulty change. By comparing and analyzing the relationship between calculation difficulty, currency price, output and output value, we try to find the inherent law of bitcoin mining, and provide reference for investment mining.
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Figure 1 Mining difficulty and BTC price curve for the same period of 2017
First, the stage of difficulty in computing power:
The difficulty of computing has peaked from April 27, 2017 until October 4, 2018, showing an exponential growth pattern. From 521.9745 GH/s, it increased to a maximum of 7454.9686 GH/s, with the highest increase of 1328.2%. In the same period, the price of Bitcoin experienced the trend of roller coaster, rising from 1440.3 US dollars to 19,981 US dollars on December 17, 2017, and then began to burst into a bubble, falling to 6590.4 US dollars on October 4, 2018, the highest increase of 1281.0%. . The detailed market is that since June 28, 2018, Bitcoin closed at $5,848, and until most of November 14, 2018, it was within the range of $6,100-6,790, and until November 14, it fell below the $5,848 innovation low.
It can be seen from Figure 1 that the bitcoin price and the computational difficulty before October 4, 2018 are related to the price increase and decline stages. Specifically, it can be explained as: bitcoin price rises, attracting a large number of miners to enter mining, making the power index Growth, thus showing a positive correlation. However, the price of bitcoin fell, the difficulty of computing continued to rise, because mining is still profitable, so the price decline does not affect the mining activities and the difficulty of computing. Until a critical point, the bitcoin price fell to 6590.4 US dollars on October 4, 2018, and began to fluctuate within a narrow range of the above 6100-6790 range. After that, the difficulty of the calculation peaked and the mining activity began to decrease. The difficulty began to fall, indicating that the mining machine is gradually shutting down, and the miners are gradually withdrawing from this market.
The second calculation power difficulty decline stage:
From 27454.9686 GH/s to 5106.4229 on December 19, 2018, the largest decline was 31.5%, and the price of the currency fell from 6590.4 US dollars to 3810 US dollars, a decrease of 42.1%. The specific market price is that the currency price fell to a low of 3283.4 US dollars on December 15, 2018, and then began to rise. At this stage, the difficulty of calculating the power is slow and falling. The slow decline was caused by some prophetic mine owners exiting the market, and the sharp decline was due to the BTC crash caused by the BSV forked BCH on November 14, 2018, which caused the mine disaster due to the forced shutdown of the mine owner.
In short, the price of the currency fell before the calculation of the difficulty, but also before the difficulty of calculation, the price dominated the mining activities.
Third, the calculation of the difficulty level of recovery:
At this stage, the performance of bitcoin price fluctuated within the range of 3,283 to 4,320 US dollars, and showed a convergent triangular state with a gradually rising bottom, and the volume of volume shrank. The duration is from December 15, 2018 to April 2, 2019. Most of the time was oscillated at $3,400-4,320. The difficulty of the calculation began to slowly recover, indicating that the price miners began to be profitable. Some mining machines that were forced to stop were started, so the cost of bitcoin mining was around $3,400. At this stage, the old machine restarted and the new machine has not yet entered the market to start mining.
Because of the current price and machine sales price, the mining investment recovery period of the mining machine is generally more than 14 months (see below). It has become more rational after the miners have experienced the mine disaster. In addition to the mine machine producer's own mining machine began to layout mining and some old machines to restart, miners are generally in the wait-and-see stage. Mining activities are not active. Because both the difficulty of calculation and the mining industry cycle lag behind the change in currency prices.
In short, I believe that despite the arrival of the flood season, as long as the bitcoin price remains below the important range of 6100-6790, there will not be a large number of new miners coming in, and the calculation difficulty will not increase dramatically. Only after the price rises back to the above range has fully improved the profit margin and the investment recovery period of the mining, the miners will be ready to move, the mining activities will begin to become active, and the difficulty of calculation will gradually rise to the previous high point. When the price rebounded, making the calculation difficulty difficult, the mining activity ended the recovery phase and began to enter the fourth stage, which was really active.
Figure 2 below shows the dynamic income recovery period of the core T3 39T mining machine. The investment recovery period for miners purchasing mining machine mining is 462 days and about 15.4 months, which is one of the reasons why a large number of miners are waiting to see.
Figure 2 Dynamic revenue recovery period of the core T3 39T mining machine (Source: SWHY CryptoFund Mining Revenue Calculator)
The chart below further shows the relationship between computing power and bitcoin production and Bitcoin production. It is clear that the Bitcoin production index fell as the computing difficulty index increased. Since February 7, 2018, bitcoin production has fallen by 10^-4, and has remained below 1*10^-4BTC for a long time, and has remained below 0.5*10^-4BTC for most of the time. The same bitcoin production value has been affected by the decline in production and price. It remained below $1 for a long time after March 5, 2018, and remained below $0.26 for most of the time.
Figure 3 The mining difficulty and BTC production output curve for the same period of 2017
The output value of Bitcoin is affected by both production and currency prices before 2018, and the currency price dominates the output value. However, as the difficulty of mining calculations increases, the output gradually declines, and the impact of production is almost negligible. Therefore, in the future after 2018, the output value of Bitcoin is almost determined by the price of the currency.
Therefore, the mining activities after 2018 are decisively dominated by the price of bitcoin.
In summary, currently in the recovery period of Bitcoin mining activities, the best period of mining is after the bitcoin price returns to 6100-6790 USD. When does this price come, the detailed analysis above, please see above. At present, in the form of mining minerals mining rights, there is not a large amount of investment entry conditions after the mine disaster. The rental computing power mining model has greatly reduced the investment cost due to its rent purchase, greatly shortened the investment recovery period, and became popular and active. But how to identify the real power and the fund scam, we will analyze it separately in the future.
Risk Warning: This article is for communication and sharing only and does not constitute any investment advice or advice .