Precautions for Bitcoin Cloud Mining

According to data from the OKLink blockchain browser, as of May 19, Beijing time, the computing power of the entire Bitcoin network was 99.88 EH/s, which was equivalent to the average computing power of 120.64 EH/s on the day of the halving on May 12. ratio, a decrease of 17.21%.

The current price of Bitcoin is $9,677, and it still hasn't broken through the $10,000 mark.

After the halving, the price of the currency did not usher in the expected skyrocketing, but the computing power of Bitcoin's entire network has dropped significantly. Not only has the computing power declined, but many data also show that the activity on the Bitcoin chain has also declined to varying degrees.

According to statistics, from May 11 to May 17, the total number of active addresses on the BTC chain was 4,823,767, a decrease of 4.8% from last week; the total transaction volume on the BTC chain was 4,233,617.09, a decrease of 6.8% from last week; the total number of transactions on the chain was 2,060,605 , down 8.55% from last week.

In the previous article, I shared with you the indicators for judging whether the price of the currency is bullish or bearish. One of them is to look at the activity on the Bitcoin chain.

Judging by this standard, on the one hand, the activity on the Bitcoin chain is declining, and the computing power of the entire network is also declining. This indicates that the atmosphere of Bitcoin will hardly rise in the short term, and I am afraid that the price will continue to be weak for a period of time. Let's take advantage of this period of weakness and continue to collect coins.

When it comes to the computing power of the entire network, I wrote an article two days ago to share the current development of the mining industry. The main reason is that many hydropower areas in Sichuan have begun to explicitly support the development of Bitcoin mining, which makes the industry more and more clear, and policy risks It is also becoming more and more controllable. This is relatively good for the mining industry in the macro aspect, so some friends on the message board asked whether it is suitable to participate in Bitcoin mining and cloud computing power now.

In the early days, mining was a very profitable industry due to little competition. Before 2017, the income of a medium-sized mining farm could be comparable to the income of many exchanges. But now, mining has entered a professional and global model. If there are no advantages such as electricity bills, mining machine prices, and venues, it is difficult for ordinary people to make money by setting up mines.

Therefore, in this case, in order to facilitate and attract retail investors to participate in Bitcoin mining, many mining service companies have launched cloud computing power services.

We can think of cloud computing power as a mining farm that divides its overall computing power into several shares. Each share is divided into bitcoins that can be dug by the overall computing power according to its ratio in the overall computing power. The number of shares of computing power purchased by the user will obtain the Bitcoin corresponding to the computing power. This is the operating model of cloud computing power.

In this process, the finer the overall computing power of the mine is cut, the smaller the computing power contained in each share, the cheaper the price, and the more convenient it is for ordinary investors to start.

Many people compare Bitcoin mining to a fixed investment - after investing a certain amount of principal, you will receive a certain amount of Bitcoin at regular intervals. This metaphor is quite appropriate, and the same is true for buying cloud computing power.

It seems that cloud computing power is a good product - cheap and flexible to buy. Compared with investing tens of thousands of yuan to buy mining machines and paying maintenance fees every month, cloud computing power is much more convenient. However, the purchase of cloud computing power also has some matters that investors should pay attention to:

1. When choosing a merchant, you must choose a reliable and creditworthy merchant.

Unlike mining machines, cloud computing power is invisible and intangible. How much computing power a user buys and how much computing power a merchant provides is entirely up to the merchant, and it is difficult for users to verify. Therefore, the choice of merchants is the first and most important factor in purchasing cloud computing power.

2. The income of cloud computing power is variable, so the income obtained by purchasing cloud computing power is also variable.

Since the total computing power of the entire Bitcoin network is always changing, under normal circumstances, the computing power continues to rise. Therefore, in this case, the proportion of computing power purchased by users in the entire network computing power will increase. It is getting smaller and smaller, so the mining income will be smaller and smaller.

Of course, if the computing power of the entire network continues to decrease in the current situation, the income obtained by the computing power purchased by users will continue to increase. However, this situation is not common.

We can understand the purchase of cloud computing power as depositing a sum of money in the bank. In the long run, the bank's deposit interest rate is getting lower and lower, so the interest we get is getting smaller and smaller.

3. There is a certain withdrawal threshold for coins mined by cloud computing power mining.

Usually, many mining users will mention the mined coins to their wallets. But withdrawing coins is not just a click of a button as imagined. In cloud computing power mining, many computing power companies will set a certain threshold for withdrawing coins. For example, you can withdraw cash only after digging enough 0.01 bitcoins, which means that if the coins you mine are less than 0.01 bitcoins, you The coins will never be withdrawn. If you will never be able to mine the coins specified by the threshold, then the coins you have dug up are equivalent to giving to the computing power company.

Therefore, before you plan to invest in cloud computing power mining, you must study and clear the reputation of each company and the specific mining rules, otherwise you will fall into different pits.