As regulation tightens, where does the crypto mining industry go from here?

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(Photo courtesy of Caixin Weekly)Recently, Caixin Weekly published ""In ", there is a picture of a Tibetan woman carrying a mining machine. As soon as the manuscript was published, this picture "recording the historical moment of the closure of the Sichuan Bitcoin mine" quickly became popular, not only igniting NFT creators The enthusiasm also truly reflects the status quo of China's mining industry.

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After the suspension of mining, Chinese miners are all sentient beings

Persevere or leave? For practitioners and investors in the recent turmoil in the encryption industry, this is a difficult but inescapable choice. For investors, Bitcoin has experienced the most dramatic plunge in history, once falling to $29,000, and has been fluctuating around $30,000 in recent days. Compared with the highest price of $64,829 in April, Bitcoin is now almost cut in half. In the end the bottom or escape the top? For practitioners, especially miners, from the intensive release of signals of strict supervision of virtual currency by governments in May to the landing of regulatory boots today, the mining industry has ushered in a historic moment, and mining practitioners have issued " The feeling of "the end of an era" also fell into depression and confusion.

"It's too difficult, really. It's not easy to go out to sea. In addition to the influence of factors such as transportation, customs clearance, installation, operation and maintenance, whether the power is stable or not, and whether local policies are friendly, the most important thing is that many foreign countries The local political situation is not as safe as in China, so I dare not go to sea rashly.” Old A, who entered the circle early in school, still has certain concerns about going to sea.

"Now I don't consider the loss of income. Just don't put all the mining machines in it, otherwise I will really go back to the pre-liberation overnight. This policy has hit the industry too seriously. Mines, miners, Mining pools, all mining groups are not spared." Komatsu was a little desperate for the situation in front of him.

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 entered the game with high leverage before. Now under the pressure of funds, they have to choose to sell coins to repay their loans. However, how long can this road last in the case of a downturn in the market?

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The regulatory boots have landed, and the difficulty of mining has dropped

The People's Bank of China first issued a document on May 18 to ban bitcoin-related businesses. Since then, Inner Mongolia, Qinghai, Sichuan, Xinjiang, Yunnan, Guizhou and other regions where many virtual currency mines have gathered have all begun to withdraw virtual currency mining projects. According to a data released by the Center for Emerging Finance (CCAF) of Cambridge University last year, the mining computing power of Chinese miners accounted for 65.08% of the world's total mining computing power. The tightening of China's policies means that the Bitcoin mining industry is ushering in a dark moment , Then South Korea, Russia and other governments followed up and tightened supervision. On July 7, Iran, the former "mining paradise", also announced the suspension of domestic bitcoin mining due to 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.

Due to the tightening regulation of major mining countries such as China and Iran, whether local miners and miners choose to wait and see for more policy news, or plan to go overseas to find policy-friendly and stable areas, it will take a certain amount of time, so currently about half The computing power of is offline, and it is unknown when it will be restored. For Bitcoin miners and miners in the compliant market, this means that half of their competitors have disappeared, and the difficulty of mining has dropped by nearly 50%.

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Chinese miners have a long way to go to sea

For powerful leading mining companies, it is only a matter of time before they go overseas, and they can choose the best in both Central Asia and North America. But it is not that simple for small and medium-sized miners to go to sea. 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 of most miners. But on July 1, President Kassym-Jomart Tokayev of Kazakhstan signed a new law amending the Central Asian Republic's "payment of taxes and other budgetary obligations" legislation, which will impose restrictions on cryptocurrency mining, an energy-intensive industry. This means that the mining cost of miners will increase accordingly, and they will also face risks such as transportation damage and loss during the migration process, as well as mine construction, power cooperation or hosting, etc. There is a long way to go, which means that it will take a long time to restore the computing power of the entire network.

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Mining income soars, standard computing currency may become a new choice

After the difficulty of mining has decreased, the profitability of miners and miners operating normally in compliant areas has increased significantly. According to data from the monitoring resource website Blockchain.com, the daily growth rate of Bitcoin miners’ income has basically exceeded 50%. This shows that for miners still mining, mining a block is nearly twice as profitable as it was at $64,000.

Although the income of miners in compliant areas is currently soaring, it is not easy for ordinary retail investors who face difficulties 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 track. Hashpower coin, in simple terms, is to tokenize 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 income.

At present, there are many Bitcoin computing power projects on the market, but not many of them are really valuable. Therefore, when investors choose BHP, they should choose projects with mining machines located in areas with stable policies, mining-friendly, and favorable electricity rates. For example, Apifiny’s BTCHV project Hash Hive (BTCHV) with mining machines located in North America. Conversely, if you choose a project where mining machines are operated in countries unfriendly 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 great losses to investors. Risk, the cloud mining (cloud computing power) platform Sulifeng issued an announcement on May 25 to suspend BTC/ETH mining. It is reported that the company's mine is preparing to relocate abroad, and plans to transfer to Pakistan or Russia.

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