Mars Finance reported, on December 20, the second "Mars Chief Editor Moment" dialogue with the subject "From Rapid Development to the Darkest Time? - Mining Industry 2018" hosted by Mars Finance Partner and Chief Editor Lao Li took place in Mars communities. Six guests, CEO of Bixin Gang Wu, founder of BTC.TOP Zhuo'er Jiang, co-founder & CEO of Cobo Mao Shixing, Director of Canaan Technology and Vice President of Avalon Feng Chen, co-founder of Innosilicon Alex Ao, and partner of Fengwo Mingyue Deng, as well as two guest hosts co-founder of Mars Finance and partner of Mars Ecosystem Silin Shang and Mars Column Chief Editor Xiaoshe Meng reviewed the development history of the mining industry (mining machine & mining pool) of 2018 together through following questions:
1. With the "flash crash" of bitcoin market, the mining revenue has been lower than the mining cost, and the fate of mining machine and mine pool has once again attracted market attention. In 2018, the mining industry (mining machine & mining pool) ushered in the darkest hour. We prepared two sets of questions, one for the representatives of mining machine and the other for representatives of mining pools.
For mining machine: How is your sales target this year? Are there any production cuts? Are you developing new mining machines? When will it hit the market?
The situation of major mining machine companies are similar. The completion of the sales target is not bad, with no large number of production cuts at present. They are all developing new mining machine, and ready to launch to the market when the time is proper.
For mining pool: What currencies are you mining in your pool? What is the utilization rate of the machine in December? Did the hash power in December increase or decrease compared with that in January? What is the amplitude?
Bixin mainly focuses on mining BTC, BTC.TOP is mining BTC, LTC, and Dash, while F2POOL can mine 36 kinds of tokens. In December, there is a considerable decline in the machine usage rate and hash power.
2. Some have deemed the hard fork of BCH as a war between "mining bullies" and "plutocrats", arguing that it undermines the illusion of the consensus on blockchain. What do you think of this criticism?
All parties indicated that the impact of BCH hard fork was limited. Zhuo'er Jiang explained: "Some people believed the sharp drop in cryptocurrency prices was caused by the hard fork of BCH, which was a typical cognitive error. The bitcoin bull market is because bitcoin really works, and the blockchain creates new economic freedom, while bitcoin bear market is because the bull market has gone up too much and the bubble is too big. Professor Yong Chang once put that a decentralized organization wants to avoid fragmentation, just as a centralized organization wants to survive for generations."
3. The business structure of mining machine manufacturers is relatively simple, and their fates depend on the market. Today, as mining machine manufacturers, do you think it is a long-term business to produce and sell mining machine? Will it diversify? What's the plan?
The mining companies are optimistic about this question. "Mining machine, bitcoin and the whole industry all need to be updated and developed, and further changes are needed." Chen said, "It takes time for a new industry to develop and grow". In terms of future development, the companies all say that they are developing new fields or trying to make innovations. Alex Ao also admitted that integration makes hi-tech, and one will be eliminated if he only wants to live on his past achievements.
4. Some people think that from the perspective of historical development, fewer and fewer projects will adopt PoW mechanism, and the mining pool industry will depress gradually. Do you agree with this sharp view? How is your pool prepared for this challenge?
No mining pool companies agree with this view. Mao Shixing said: "Firstly, the number of PoW projects continues to increase, especially some teams with good technical capabilities and application scenarios choose to use the PoW mechanism to promote the project. Secondly, the PoW mechanism requires participants to make actual costs to obtain block rewards. For miners, it is not easy to get, so they will cherish it more. For the attacker or perpetrator, his attack cost is higher. This will enable the project to develop in a more healthy and orderly manner. PoS mining has its advantages and disadvantages too, so PoW mechanism cannot be completely denied."
5. This year, the price of BTC plummeted by 75%. The mining revenue was lower than the cost, a large number of mining machine was shut down and the hash power of the mining pool declined. The mining industry seems to have entered a state of "spiral decline". The digital money market down 86% this year, what do you think of the market in 2019?
The mining companies remain optimistic and confident. Feng Chen said that there is no need to over-interpret the situation in the next year or two, as long as we have been in this industry, adhering to the main industry and at the same time making timely innovation and creation, we will have the opportunity to make a bigger and stronger business. Mingyue Deng also said: "The devastating blow is not exist, because eventually the price will reach a balance point that everyone can accept. Only when the bubble bursts early can valuable applications emerge and the sustainable development of the whole industry be promoted."