Tighter regulation, where is the encryption mining going?

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(Picture from Caixin Weekly)

Recently, Caixin Weekly published “Development|China Says Goodbye to Bitcoin Mining” with a picture of a Tibetan woman carrying a mining machine. As soon as the manuscript was released, this “recorded the Sichuan Bitcoin mining farm” The picture of “Closed Historical Moments” quickly became popular, not only igniting the enthusiasm of NFT creators, but also truly reflecting the current status of China’s mining industry.

After the cessation of mining, Chinese miners

Persevere or leave? For practitioners and investors in the crypto industry who have been turbulent recently, this is a difficult but unavoidable choice. For investors, Bitcoin has experienced the sharpest plunge in its history. It once fell to US$29,000, and has been fluctuating around US$30,000 recently. Compared with the highest price of Bitcoin of US$64,829 in April, it is now nearly cut in half. Should I buy the bottom or escape the top? For practitioners, especially miners, from the intensive release of signals from governments of various countries to strictly supervise virtual currencies in May, to the landing of supervision boots today, the mining industry has ushered in a historic moment, and mining practitioners have issued ” The feeling of “the end of an era” has also fallen into distress and confusion.

“It’s too difficult, really. It’s not easy to go to sea if you think it out. In addition to factors such as transportation, customs clearance, installation, operation and maintenance, power stability, and whether the local policy is friendly, the most important thing is that there are many foreign countries. The local political situation is not as safe as the domestic one, so I don’t dare to go out to sea rashly.

“I don’t think about the loss of income anymore. I just ask not to put all the mining machines in, otherwise I will return to the pre-liberation overnight. The policy this time has hit the industry too severely, mines, miners, Mining pools, none of the mining groups are spared.” Komatsu is a little desperate for the present situation.

“Before, some media mentioned in the article that the miners would go bankrupt in two months. In fact, many highly leveraged people have been liquidated on an equal footing because they will not last two months at all.” Aaron felt that some people It’s harder than your own situation. (In order to protect user privacy, the above are all pseudonyms)GLCjcG8BN7K7VEFcX5qV5rZ6rbQIOd5qGy4jZTbY.jpegJh7NdCqcbLJOFPt6uDWcVPQw6SXsumb0vpBL6hq3.jpeg

The above is just a microcosm of many Chinese Bitcoin miners. Waiting and watching, lying flat, seeking to go to sea… are all true portrayals of the mining industry. In addition, many miners have entered the game with high leverage before, and now they have to choose to sell coins to repay their loans under financial pressure. However, how long can this road last under the sluggish market situation?

The supervision boots landed, and the difficulty of mining decreased

The People’s Bank of China first issued a document banning Bitcoin-related businesses on May 18. Since then, Inner Mongolia, Qinghai, Sichuan, Xinjiang, Yunnan, Guizhou and other areas where many virtual currency mines have gathered have begun to withdraw virtual currency mining projects. A data released by the Cambridge University Center for Emerging Finance (CCAF) last year showed that the mining power of Chinese miners accounted for 65.08% of the total mining power in the world. The tightening of China’s policy means that Bitcoin mining has ushered in the darkest moment. , And then South Korea, Russia and other governments have followed up to tighten supervision. On July 7, the former “mining paradise” Iran also announced the cessation of domestic Bitcoin mining due to the pain of unbearable energy consumption. According to statistics from the Bitooda website, Iran is the world’s third largest Bitcoin holder after the United States and China, accounting for 8% of the total.

After various countries have strengthened their regulatory policies on Bitcoin mining, the argument about “mining disasters” has been rampant. In fact, strictly speaking, the so-called “mining disaster” only applies to countries or regions that stop Bitcoin mining. For miners in compliance areas, it is a good thing to reduce the difficulty of mining, because with the adjustment of Bitcoin algorithm , Now the output of mining is higher.

Due to the stricter supervision of mining powers such as China and Iran, whether local miners and miners choose to wait and see and wait for more policy news, or plan to go to sea to find areas with policy-friendly and stable policies, it will take a certain amount of time, so currently about half The computing power of is offline, and it is not known when it will recover. For Bitcoin miners and miners in the compliant market, this means that their competitors have disappeared by half, and the difficulty of mining has dropped by nearly 50%.

Chinese miners have a long journey to sea

After halting mining in many places, the migration of miners and mining companies has become a unique landscape in the mining circle. North America and Central Asia have become paradise in the eyes of miners and mining companies, and many companies have begun to deploy. Recently, the founder of Lebit Mining Pool, Jiang Zhuoer, said on Weibo that the joint mining business will no longer be open to mainland China and will mainly deploy mine mining in North America in the future; the US stock-listed Bit Mining (formerly 500彩票网) Also issued an announcement on its official website to invest in the construction of a mining farm; Bit Mining announced on May 19 that it will jointly invest in the construction of an encrypted digital currency mining farm in Texas, USA with Dory Creek, a wholly-owned subsidiary of Bit Deer. , And announced on May 24 that it would invest in the construction of a mine in Kazakhstan.

For powerful leading mining companies, it is only a matter of time before they go to sea. Both Central Asia and North America can choose the best. But for small and medium miners, going to sea is not that simple. Not every miner can afford the transportation and operating costs of going to sea, so Kazakhstan, which is relatively close, has become the first choice for most miners. However, on July 1, the President of Kazakhstan Kassym-Jomart Tokayev signed a new law amending the legislation of the Central Asian Republic on “tax and other budget obligations”, which will be used in the energy-intensive industry of cryptocurrency mining Additional fees are levied on the electricity of China, which means that the mining cost of miners will increase, and during the migration process, they also face risks such as transportation damage and loss, as well as the construction of mines, power cooperation or custody, etc., so Chinese miners still have A long way to go, which means that it will take a long time for the entire network to recover.

Mining revenue soars, standard hashrate may become a new choice

After the difficulty of mining decreases, the profitability of miners and miners operating normally in compliance areas has risen sharply. According to data from the monitoring resource website Blockchain.com, the daily increase in Bitcoin miners’ income has basically exceeded 50%. This shows that for miners who are still mining, the profit of mining a block has almost doubled, basically the same as when the price was 64,000 US dollars.

Although the income of miners in compliant areas is currently soaring, it is not easy for ordinary retail investors who are faced with problems such as lack of funds, expertise, technology, and operation and maintenance to enjoy this wave of mining dividends. The threshold for entering the mining field is too high, and Hashcoin has become the best ticket for investors to enter the mining circuit. Hashcoin, in simple terms, is to certify the computing power of the original mining machine. Users who hold a certain token can obtain the corresponding Bitcoin computing power of this token, thereby obtaining mining revenue.

At present, there are many Bitcoin computing power projects on the market, but not many are really valuable. Therefore, when investors choose hashrate coins, they should choose mining machines to be placed in projects in areas with stable policies, mining-friendly, and electricity tariff advantages. For example, the mining machines are all in North America’s Apifiny’s BTCHV project Hash Hive (BTCHV). Conversely, if you choose a project where the mining machine is operated in a country that is not friendly to mining, such as China and Iran, the computing power will face the risk of being cleaned up. Such non-compliant and untrustworthy computing power will bring a great deal to investors. Risks, the cloud mining (cloud computing power) platform HashBee announced on May 25 to suspend BTC/ETH mining. There is news that the company’s mine is preparing to move abroad and plans to move to Pakistan or Russia.

What is a standard hashrate coin? Different from other methods of tokenizing mining machines, standard hashrate tokens tokenize Bitcoin’s computing power (such as BTCST, BTCHV), and the life cycle of mining machines has nothing to do with users. Compared with other mining-related investments, standard hashrate increases liquidity and provides investors with better Bitcoin returns, and investors can quickly enter and exit Bitcoin mining at any time, reducing mining risk. Investors can directly purchase or pledge standard hashrate for mining and enjoy the dividends brought by mining without worrying about mining machines, policies, taxes and other factors.

In the context of increasingly strict regulations, a large number of cryptocurrency mines have been forced to close, and Bitcoin’s hash rate and mining difficulty have dropped sharply. This means that currently in compliance areas, Bitcoin miners who mine will receive With more market shares and profits, and with the further introduction of regulations in various countries, the encryption mining industry is expected to become more formalized and further promote the sustainable development of the encryption industry.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/tighter-regulation-where-is-the-encryption-mining-going/
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