Bitcoin “mining disaster” of China is taking place
China said is slowly recovering from the Covid-19 outbreak, and businesses across the country are also returning to business. However, the Bitcoin mining industry has suffered heavy losses and could have caused more disaster.
That's partly because of quarantine operations, manufacturers of mining rigs like Bitmain based in Beijing and MicroBT in Shenzhen were unable to transport new equipment to mining farms, mostly on the northwest of the country (where there is much hydroelectricity). The supply chain bottlenecks caused BTC's hash rate to be delayed last month.
Although unrelated, the slow shipping of the 7 nanometer chip from Taiwan-based manufacturer TSMC is also a cause. High demand from Apple and Huawei has led chip makers to postpone deliveries from 2019 to early 2020. These new chips are thicker, more powerful, require less power and are in high demand among miners.
The problem cannot be ignored
But when things return to normal, the miners are faced with a big problem: “Mining disaster” will promote the closure of a series of small farms in China.
If the price of BTC does not change or decline further, mining will become less profitable, putting unbearable pressure on independent miners and smaller activists. That happens at the time halving expected in May 2020, when the miners said will upgrade to 7nm chips to handle more complex work and more intensive PoW calculations.
This looks like a storm that brought heavy damage to everyone except the major mining activists. The virus and its consequences caused many miners to 'come back soon'. Those who do not upgrade soon are facing immeasurable consequences. Some observers comment This collective upgrade will lead to a mining disaster for many farms, which are currently recovering capital costs from the purchase of old mining rigs. What's worse: the new chips on the block also boost the hashrate, causing older BTC mining machines to consume more power.
Old but precious: AntMiner S9
Naturally, some observers believe that the mining disaster can be avoided.
“Even if prices fall, miners won't lose everything,” said co-founder Dan Li of the XSJ Mining farm in northwest China. Li believes sophisticated miners have regained infrastructure costs in the past three years thanks to the efficient run-time of 16nm chips. Therefore, they will be able to afford financial support when the device is outdated.
Besides, Li says mining is like any other energy storage business. Although miners suffer from short-term price fluctuations, experienced people understand that to be truly profitable, you need to be there for long. Li pointed out:
“In most energy projects, they have to plan activities for 20-30 years. The reason is that, compared to token trading, mining brings stable cash flow, as long as the risks are minimized. ”
Similarly, newer financial instruments such as derivatives from Bitmain and Canaan also help to protect sophisticated miners from disasters. At the same time, digital commercial banks DAG Global Provides many initiatives to assist miners to prevent hashrate volatility. (Although the derivatives market for miners is still immature and no one knows whether there is enough liquidity or not?)
So what do we need to do?
Many people still believe that the possibility of small miners can exist is very low. Similar to the way whales control the cryptocurrency trading market, smaller retail investors are always in danger. Miners with little capital often meet requirements rather than control the market. Their fate is determined by the price they can negotiate. Meanwhile, large mining farms and manufacturers navigate the market. For example, Bitmain not only sells rigs, but also mining tokens with its latest machines before pushing them to market.
By the time retail miners invade the field, they were always in a state of fear of being overpowered by miners.
Top 3 events that happened last week:
FTX is looking for strategic investors to rise to become the next unicorn
There are about 451 startups in the world CBInsight. But counting from FTX, there are 452. FTX is a Hong Kong-based exchange (and seems to have been registered at Antigua) that has grown exponentially since its launch in May. last year.
Last week, FTX notification Will raise funds through the sale of FTX_Equity tokens. About 500 million tokens will be sold for $ 2 per token to investors, with a minimum purchase of $ 250,000. So the total number is 1 billion dollars!
According to FTO COO Constance Wang, the exchange is looking for “long-term strategic investors” and the supply of coins will allow FTX to look for global partners to support expansion. Many Chinese investors, such as Sino Global Capital's Liquid Value blockchain fund, are based in Beijing said participated in the token sale. Wang said:
“40% of our trading volume comes from Chinese traders. We have observed that Chinese traders are more curious and accept derivative transactions as well as innovative products. For example, our leveraged token has been a huge success in China. ”
FTX has pioneered new ways of trading cryptocurrencies, including indices shitcoin its ridiculous. But that success is inseparable from how well it positions itself in the cryptocurrency trading ecosystem. Notably, Binance said invested in December and FTX tapped into the huge resources provided by the giant exchange. The leveraged token was listed by Binance with a $ 0 preferential listing fee.
Wang said that the next wave of FTX expansion in China will focus on community building, in educating traders, onboard new users, and reducing the time to learn new trading products. The rise of FTX is proof that trading is a good way to become a unicorn (a symbol of startup success).
Nervos and Huobi: 1 + 1> 2?
Exchanges dominate the cryptocurrency world not only because they hold (literally the key to trading), but also because they are gradually expanding their footprint outside the trading world.
Binance announced the 'governmental' Binance Chain blockchain platform in 2019. The OKEx exchange focused on Chinese consumers announced the OKChain protocol layer project on February 24. Both Binance and OKEx advertise their chains as a platform for decentralized exchanges (DEX), which can be considered as an additional aspect of the current business.
NEW LAUNCH: #OKChain Testnet now LIVE 🌐
– OKEx (@OKEx) February 10, 2020
“NEW LAUNCHER: Testnet OKChain
Our own blockchain, OKChain & OKEx DEX, decentralized exchange has just launched. OKT will be OKChain's native token, OKB holders will have access to 100% genesis blocks. ”
Last week, Huobi was one of China's top three exchanges to release its own public blockchain beta: Huobi Chain. Instead of developing internal chains, Huobi cooperate with China's Nervos CKB (Common Knowledge Base) to create the PoW protocol.
The protocol will focus primarily on financial services such as tokenization of assets, identity verification and lending services. In contrast to competitors with an obsession with DEX, Huobi focuses on building its own DEX on decentralized finance and emphasizes a “regulatory-friendly framework.” The emphasis on regulatory compliance is not surprising because as we all know Huobi is the Chinese government's “darling”. But focusing the entire chain on financial services instead of core business is still a big bet.
However, Huobi's move is considered intelligent. Because the company operates primarily in China, it has learned to adapt to the government's hawkish eyes, which is needed to compete with tech giants like Alibaba or Tencent. Enter the blockchain field in this way.
In recent years, the Chinese government has increasingly focused on including finance, including services such as small and medium-sized business loans (especially to farmers), instant account payments. instant and credit rating. In the context of China's digital currency being developed, the government can use its centralized blockchain as the basic infrastructure to implement a number of policies including finance. If so, Huobi Chain will be well positioned to join the game as it is designed to perform similar cases.
Fcoin founder Jian Zhang is notorious said has released weekly updates on plans to restart the defaults exchange. Many people stopped paying attention and thought the whole thing was an exit scam. However, Zhang continued to appear.
On Friday, Zhang posted a blog post revealing the platform's financial details as well as paving the way for reopening FCoin.
According to the blog, 70% of FCoin users were damaged. The actual property gap is about 90 million USDT, much less than the estimated 150 million when this news broke out.
Zhang plans to reopen Fcoin in a week, users will be able to view their wallets and withdraw up to 50% of their assets. The remaining 50% can only be withdrawn upon request (email only!).
Zhang stated that FCoin will be governed and governed by the community for maximum transparency. Even his own locked tokens are identified by community voting.
It sounds interesting after all his recent actions with the Fcoin community. As we all know, community management is easier said than done, especially when the head intervenes too deeply (like the case of Justin Sun taking over Steemit).
Oh good. FCoin users should expect a portion of their lost investment to be recovered. At least, until Zhang's mouth changed again.
Do you know?
“打 酱油” is a widely used slang word in China. It literally means “fetching soy sauce” and often describes children of old age who can run errands, such as buying soy sauce at a store.
In recent years, the term has evolved (especially on the Internet) after an interview on a popular television channel in which the journalist tried interview Someone about a scandal. This person rejected the journalist: “I did nothing. I just went out to buy soy sauce. ” Today, people use this term to describe situations in which they are less interested in participating.
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