Mining bitcoin is an arms race for both miners and manufacturers. After the most recent BTC halving, will the competition escalate for mining companies? Today, we invited Wilson Guo, OXBTC's CEO, to share his views on the mining rig manufacturers and mining investment.
Let's first focus on mining rig manufacturers:
Wilson Guo: With the launch of 7nm and 8nm chips, the room for major technical improvements of BTC mining will be further squeezed. The early upgrades of Bitcoin chips were introduced to catch up with the latest IC nano process. However, given that the newest high-end products from Apple, Qualcomm, and AMD are all based on 7nm integrated circuits, the current 7nm Bitcoin chips are just as advanced as ICs.
Although manufacturers have started to test and deploy 5nm or even 2~3nm lines, it will take at least a few years for them to be debugged and mature, and the scale of future improvement will be limited. In the future, technology updates will be less frequent, and the technology gap among different manufacturers will become increasingly small. Due to the high production cost of 7nm chips, new players are faced with a much higher threshold. Therefore, the focus of competition will gradually shift from technology to stability, service, and market capacity, which will pose more diversified challenges for manufacturers. Though the production capacity of chips over the long run is hard to predict, I believe the production capacity this year will not be very satisfying. This assessment is based on two aspects. On the one hand, manufacturers have been hit by the COVID-19 pandemic and traditional tech companies need to focus on the production of new processes, therefore, only a limited amount of production capacity can be allocated to mining chips. On the other hand, in light of the present market conditions, manufacturers will not aggressively expand their production capacity.
In addition to the competition for Bitcoin, I’m convinced that more investors will focus on and invest in other cryptocurrencies. Given that the last two years witnessed the launch of many reliable public chain projects based on PoW, manufacturers will focus more on such promising projects to seek breakthroughs. This year, we have seen that while everyone is competing for ASIC mining, more and more bitcoin miners have considered mining with GPUs and FPGAs. Similar to investing in the shares of a company that will soon go public, the early-stage mining of new cryptocurrencies comes with greater risks and higher returns compared to BTC mining. In the future, there will be more cryptocurrencies available for mining, which will provide more diversified investment choices for miners.
Concerning bitcoin mining investment in bitcoin network:
Wilson Guo: As mentioned above, from the perspective of manufacturers, future updates of mining machines will be less frequent. Therefore, if you invest in a new-generation mining machine at the beginning of the next four-year bitcoin halving cycle, then in all likelihood, the machine will run steadily during the four years. The market expectations of the bitcoin halving are based on predictions rather than facts. Hence, the real market conditions of the bitcoin halving remain unclear. As they say, "mine in the bear market and speculate in the bull market". Now is a good time to keep mining. However, the future mining gears will still be upgraded, and the profit margins of mining hinge on three key elements: the token price, hashing power, and electricity fees. Miners should prepare for the future market starting from these three aspects.
After Bitcoin halving, what preparations will OXBTC make?
Wilson Guo: Considering the era of huge profits for BTC mining has ended, miners should consider adjusting their mining assets. While mainstream tokens are more prudent investment targets, lesser-known tokens come with greater risks and higher returns.
· Preceding primary-market investments, mining is a more prudent investment choice. This is particularly true for investment in universal mining machines, which can switch to mine another cryptocurrency. Therefore, investors should keep track of universal mining machines as a potential investing choice. In addition, OXBTC will also focus on GPU mining and FIL mining as it further expands its business.
· With regards to GPUs, the current static payback period of GPUs is shorter than that of S19 Miner, the most cost-effective BTC rig. Considering the high scrap value of GPUs, the profit of GPU mining is even more substantial. GUP-based ETH mining features a low proportion of electricity fees in the total cost, which means lower risks. Plus, the mining difficulty of ETH in the past two years remained stable. In light of all these, it is clear that GPU mining promises steady returns.
· Concerning ETH, the token has had a strong track record this year. Moreover, the market is getting more excited about ETH as ETH 2.0 is about to launch in the coming months. If you are keeping track of the conversion rate of ETH to BTC, then you would know that the ETH price is at a low point, which is why miners should hoard more ETH through mining and wait for a future surge.
· The biggest opportunity in GPU mining is the elimination of 4GB GPUs from ETH mining. Right now, 60-70% of all GPUs in the ETH network are 4GB GPUs. According to initial estimates, by then, the network hash rate will drop by 20-30%, and the mining revenue of 8GB GPUs will soar.
· PandaMiner, the largest GPU miner manufacturer and one of the partners of OXBTC, has made a thorough plan for the GPU market. If you have 4GB GPUs, you are welcome to contact us to have them upgraded to 8GB. Compared with upgrade plans which require the miner to do all the work, the SMT production line upgrade plans we offer are hundreds of times more efficient and far more stable. If you are an investor interested in ETH mining, we will select the most suitable investment plan based on your budget to help you with the production of new machines and refurbished machines, the stable operation and maintenance of mining machines, and hedging.
Concerning FIL, hardware and IDC rooms are the core advantages of OXBTC and PandaMiner.
As the No.1 brand of GPU miners, we have built up a pool of first-class partners in the supply chain of mining hardware. Moreover, we are also experienced in stable mass production. OXBTC and PandaMiner can source the components of the three key mining hardware directly from brand manufacturers or domestic agents. We can even set up lines and produce the components on our own. During the early stage of development, we built BTC and GPU farms, which gave us access to plenty of low-cost and high-quality IDC rooms in Inner Mongolia, Guizhou, and first-tier cities in China.
· We embrace cooperation in software. In the second half of 2019, our tech team worked with outstanding external software teams to help users find the most cost-effective tech solutions.
· In the future, the market of ETH mining through GPUs will be specialized, just like what happened to the GPU-based Bitcoin market. There will be software experts, hardware specialists, and operation & maintenance professionals. Having served BTC miners for 6 years, we are keenly aware of what miners need. Sometimes, miners need more than the largest company. Rather, they want a portfolio of optimal solutions for each link. Here at OXBTC, we are all set to provide you with comprehensive, one-stop, and transparent mining solutions.
· OXBTC's investment strategy for this year's market is as follows: Bitcoin miners should seek stability, without any reckless expansion of investment. GPU miners should strive for growth and fully seize the ETH opportunity. Lastly, FIL miners should take risks for the first-mover advantage in mining.
Headquartered in Singapore, HALLEY TECHNOLOGIES PTE. LTD. is one of the earliest providers of mining services. Growing in the cryptocurrency mining sector since 2014, the company has expanded its business and drafted an extensive roadmap, covering mining hardware, mining farm infrastructures, and mining services. In 2016, the company entered into strategic cooperation with PandaMiner and Halley Mining, two global leaders of GPU miner manufacturing, to provide industry-wide ecosystem services and deliver the underlying value support for the whole cryptocurrency market.
As a business affiliated to HALLEY, OXBTC is a credible global platform of mining services. Founded in 2014, OXBTC offers authentic mining services through self-managed mining farms. Relying on its rich supply chain resources and years of operation experience, OXBTC provides secure and stable services for users in more than 50 countries around the world.