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Bitcoin boarding guide: Buying coins is not as good as buying power.

Editor’s note: This article comes from the strategic cooperation blockchain media “Odaily Planet Daily” (Public ID: o-daily, < a href="https://download.odaily.com/">APP Download)

Author | Little Parker Editor | Hao Fangzhou

Products | Odaily Planet Daily (ID: o-daily)

This year’s currency recovery has brought a new round of “faithful recharge”, and some investors’ interest in bitcoin has shifted from buying to more source mining. Mining itself can be seen as a conversion of bitcoin at a price below the market price per 10 minutes by investing in hardware and electricity. Therefore, if you are optimistic about Bitcoin for a long time, the best way to make money is to mine, not to buy coins.

Now, as bitcoin mining becomes more and more mature, the threshold for buying and operating mining machines and finding electricity prices is getting higher and higher. The rise of the cloud computing platform has led to the transition of the mining pattern from the monopoly of large mines to the mining of the whole people. For ordinary investors, buying cloud computing contract products (rental computing power) is a low-cost, low-threshold mining method. Investors can regularly receive the bitcoin dug out, which is more stable than buying coins. . At the same time, the mine owner will calculate the power to rent, get cash flow in advance and spread the risk to achieve a win-win situation.

This article will explain the advantages and disadvantages of Bitcoin cloud computing power mining compared to traditional mining, sorting out the cloud computing power mining industry pattern, measuring the mainstream platform products, and taking the new platform to calculate suanyitou.com as an example. Dismantle the risks and opportunities behind cloud computing.

Directory:

First, what is cloud computing power mining

Second, the comparison of the advantages and disadvantages of cloud computing power and traditional mining

Three, cloud computing power diggingMine market pattern

• Market size

• Modes and Cases

• Product Evaluation

IV. Opportunities and risks of cloud computing power mining

What is cloud computing mining

The usual step in bitcoin mining is “buy mining machine – deploy mining machine – set mining – get revenue”, but deploying mining machine is affected by many factors, such as electricity price, site, temperature, noise , operation and maintenance, etc. These thresholds require certain conditions and knowledge to eliminate, thus spawning a sub-module under the mining industry – cloud computing power.

Cloud computing is a remote mining mode. The user purchases the cloud computing contract through the platform, rents the computing power to mine, and obtains the income regularly. The advantage of cloud mining is that users do not need to understand the mining principle and various hardware and software, or purchase expensive mining machines, and do not need to maintain their own 24 hours, as long as the purchase of the order can participate in mining, similar to the purchase of income rights products.

We believe that cloud computing power is P2P of computing power, and the platform side connects the income rights (assets) of the mining machine and individual investors (funds). Therefore, pay attention to the following three points when choosing a cloud computing platform:

• The computing end needs to be supported by real mining machines and mines. The platform generally discloses relevant information.

• The electricity behind the power is cheap and stable. We already know that electricity prices are the core variable of mining costs, and that computing power is also considered a digital product that is converted by electricity and energy. Therefore, stable and cheap electricity prices can support high-quality computing power.

• Machine model number. The new machine is highly efficient and stable.

Compared with the advantages and disadvantages of cloud computing and traditional mining

For investors, cloud computing contracts have the following advantages:

• No need to buy a mining machine, the initial investment is small and the threshold is low.

• No additional risk of mining machine failure, performance loss, or post-maintenance costs, and high investment stability.

• After the contract is over, there is no need to deal with machines, venues, etc., and the exit is more flexible.

For the mine owner, renting and selling the computing power for a period of time to the customer at a price slightly lower than the self-operated mining revenue, can quickly return cash, pre-order the latestMining machines, expanding production scale, and striving for profit in the long-term market, to some extent, can also retain mining machines, transfer risks, and hedge the single risk of mining self-operated business.

But the cloud computing power also reflects the following disadvantages compared to directly participating in mining:

• Even if the platform fully displays information about mines, mining machines, cooperation, teams, etc., it is still difficult for users to judge the quality of computing behind the platform, real-time operational status (such as power outages, site inspections) or real benefits. data.

• The platform side has a risk of running. The domestic digital currency mining industry is still in the gray area of ​​supervision and is not protected by law. For example, in 2014, the AMHASH project was running, the online and pre-sales powers all disappeared; in January 2015, the Bit Manager’s official website could not be opened, all major communities stopped and confirmed the road; in April 2015, the power calculation Liquidation caused the user to lose hundreds of thousands of yuan.

Cloud computing mining market pattern

1. Market size

Cloud computing was born in 2014. On September 1st, 2014, Bitcom’s power nest was launched. On September 2nd, Sweden’s KnCCloud was launched. In the same year, there were foreign Genesis-Mining, NiceHash, cex.io, domestic digcoin and Bitcoin International. Its power, mining machine, HashRatio’s Hashyun, LTC mining machine Zeus’s ZeusHash.

After the currency price was low, the cloud computing power was silent for three years. After 2017, the platforms such as Computational Cloud, Star Cube, Bit Dynamics, Hash.Pro, Bit Deer, Renren Mine and other platforms have emerged. With the low threshold and more flexible features, Cloud Computing has opened the era of mining.

At present, there are more than 50 cloud computing platforms in the world, of which less than 10 are more mainstream platforms, such as GenesisMining, Bit Deer, Koala Mine, Mine Shiyun, Niubit, RHY (Cloud Computing), Cube, KGfire, Nicehash, etc. The market share of the cloud computing power of these nine platforms has reached more than 80%, which basically represents the entire industry.

From the perspective of business structure, these platforms have basically the same business model. Cloud computing lease, mining machine leasing, mining machine custody is the main business, with mineMachine sales business.

2. Patterns and Cases

According to the operation mode, the cloud computing platform is divided into computing power (B2C) and platform (C2C): the former self-built or invested in mines, direct sales of computing power; the latter builds a trading platform, generation The sales force of the mine partner can be regarded as a channel for calculating power.

3. Product Evaluation

From the user’s point of view, the purchase of cloud computing services usually involves two expenses: one is the calculation fee, which is equivalent to the rent of the calculation power (mining machine); the other is the custody fee and the electricity fee to maintain the normal production of the mining machine. . Some platforms (such as Easy Investment, etc.) will directly combine these two costs into the price of the calculation contract.

Investors are more concerned about the rate of return, which can be refined to the 1T/day dynamic return, and can also be represented by the total return (input principal* average daily yield) of the product contract period.

The formula for calculating the yield is:

Revenue = (X*Y-Z) / Z

where X represents the number of bitcoins produced by 1T/day, Y represents the average price of Bitcoin on the day, and Z represents the combined input cost of 1T/day (calculation fee, electricity fee, management fee, etc.). X can be obtained directly from the BTC.com website, as shown below:

Here, we compare the static yield of one-year products on the mainstream platform (August 23, 2019):

In the context of the currency price of $10,151.56, the theoretical rate of return is the highest, at 25.62%, followed by Bit deer 23.23%, the computing store 15.63%, and the Koala miners -27.48%. The rate of return is mainly affected by the price of the currency and BTC production as well as the input cost. The cost mainly includes calculation, electricity and management fees, which are regarded as fixed costs, and the price and output are variables. Under the premise that the currency price and output are uncontrollable, the lower the fixed cost, the smaller the loss and the smaller the loss. As can be seen from the above figure, the input cost (including electricity and management fees) for calculating the 1T computing power is 494.07 yuan, followed by the bit deer 503 yuan, the computing store 544 yuan, and the MCC.TOP 584 yuan. In contrast, the price advantage of the easy investment is greater. It provides a calculator on the official website to help users grasp the real-time rate of return.

The Opportunity and Risk of Cloud Computing Mining

The risk of speculating bitcoin (short-term trading to earn spreads) is higher than that of bitcoin (long-term bullish), but most of the coins often lack judgment on short-term price changes, “getting off early”. Cloud computing brings a small amount of bitcoin revenue to investors every day, and it is also in the disguised control of investors “frequent operation”. Therefore, for Bitcoin “believers”, we give the suggestion that “the speculative coin is not as good as the coin, and the coin is not as good as the counterfeiting”.

The market opportunity of cloud computing power is to provide individuals with a more “neutral” investment mode. The threshold is lower than that of self-built mines, the risk is lower than short-term operation, the cost is lower than the market price, and the cost of the mine is shared. With risk, get a more generous cash flow.

And as previously stated, the main risk of cloud computing power lies in the authenticity and stability of the computing power behind the contract. In our long-term contact with the mining industry, the high-frequency vocabulary we heard was “pits”: reasons for power outages outside of common sense, various episodes during the transportation of mining machines, constant interference from viruses and extortion, fluctuations in futures, and late arrivals. Spot, cross-border trade barriers, and invincible team ghosts… So, the real and stable computing power has a certain scarcity, and behind it is often the experience of stepping on the pit for many years. How can the cloud computing platform as an information intermediary help users to screen high-quality cooperative mine cooperation, design friendly and attractive products, formulate professional and transparent industry standards, and establish disaster recovery plans for various risks, providing full investment throughout the investment process. The quality of service will become its core competitiveness.

Odaily Planet Daily’s strategic incubator’s cloud computing platform is easy to invest in the first phase of the product on August 30, 2019. It is easy to invest and fully adjust the mine’s machine status, site and power situation, team personnel background, and various business compliance, strict risk control; design user interface with Internet product thinking and standards to minimize user learning And use thresholds; share the risk of the client with the partners, guarantee even short breaksElectricity does not affect daily income. At the same time, the investment and financing platform MinIPO reached in-depth cooperation on legal and tax compliance, informed the risks in advance, and did a good job of identity certification; and with the help of the Odaily Planet Daily in the mineral resources of the mine, timely follow the latest developments in the industry, for the mine Circle investors provide more valuable information services.