What should miners do in the post-Bitcoin mining era?
Today is May 17, 2023, today’s bitcoin price is 26,820USD, mining revenue, 0.075USD per T, the highest in front of more than 0.12USD, 2024, around April 30th, bitcoin will both usher in the fourth half, the industry bearish sentiment is still spreading, the peripheral capital wait and see serious, manufacturers production track record high, the market trading track record low, global mining construction is progressing slowly, and energy prices are volatile.
This is an uncertain industry, the only certainty, mining is getting harder and harder, the threshold is getting higher and higher, and gold miners are slowing down their pace.
Short-term phenomenon (before and after BTC halving)
Why did earnings explode ?
Why short-term mining revenue increased by 50% from 0.07USD revenue, the closest relationship with miners here is undoubtedly the brc-20 inscription tokens fire, so that btc online transfer fees, the highest peak growth of 20 times, miners daily revenue increased by 600 btc, according to the 900 bitcoins mined per day, the maximum day of the whole network share revenue more than 1500, also in advance foreshadows the future scenario of mining revenue distribution due to fees when daily bitcoin production is very scarce.
Based on the bitcoin ecology, extended applications, increased miner earnings, from economic interests this is undoubtedly a very good result, miners are shareholders of bitcoin banks, customers transfer money, miners earn fees.
From a practical point of view, the various inscription coins issued by today’s brc-20, bona fide projects may be an economic experiment, more projects are just a financial game initiated by the project side, more big V, KOL with a single, and more latecomers to buy in the future.
So the current traditional miners, more see the brc-20 project, as a short-term carnival of animal coins, game coins, NFT that has happened in the past erc-20 or other chains, which is currently lively and difficult to produce quality projects in the long run.
Because bitcoin is pure, he is like gold, does not need to be backed by applications, just quietly where, with a global individual consensus, will ask for $100,000, $500,000, $1,000,000 in monetary value.
Global mining production is strong, but market demand has plummeted
The three major mining machine manufacturers, Bitmainland, Sleipnir, and Avalon, because the chips are demanded 6 months or 1 year in advance to reserve capacity, therefore, the upstream producers, is certain to increase 150,000-200,000 mining machines per month, but corresponding to the power resources, has been unable to meet the upstream production capacity, so according to the current production pace, the whole market will be more supply than demand, and is irreversible in the short term.
But because bitcoin has 1 year to halve, and because of the huge upstream production of miners, today’s miners all have good credit-to-price ratios. If you are a bitcoin mining identifier and stalwart, current participation will reap the maximum amount of bitcoin before halving, and it is still a good investment today. Whether you are a mine builder or a mining participant, after October ’23, if you don’t have excellent resources as a prerequisite, it is recommended to stop your investment and wait for the halving to come before determining the direction of your investment.
In addition, like pineapple, bit small deer and some unknown small factory, also in the chip design or chip flow, is expected in the second half of this year, there are more than 2 new brands into bitcoin mining machine mining this track, therefore, mining machine manufacturers and traders, comprehensive into the red sea era, is expected at the end of 23 years, part of the traditional mining machine traders will leave this market because of industry demand and market shuffle. The industry will move from the era of big middlemen to the era of manufacturers’ direct operation. However, due to the sharp decrease in demand, manufacturers’ self-mining business will become the largest customer of new energy points worldwide.
Serious fluctuations in hashrate and increased administrative supervision
So far this year, according to the global shipments, and the global unshelved machines, the full network arithmetic power should have exceeded 500E, but why it has been hovering between 350E, which is determined by the global unstable energy and mining.
21 years of China, 22 years of Kazakhstan, 23 years of Angola, every year there are regional industry events due to politics, policies, regulations, resulting in a sharp reduction or disappearance of regional arithmetic power.
The large number of mining companies that went bankrupt as a result of the 22-year bear market is still expected to exceed 300,000 machines that are currently sealed in U.S. warehouses.
But the industry has no shortage of explorers, with Russia, the Middle East, Esse, and South America, also opening up thanks to the efforts of global miners, who are expected to be the new places to take on computing power.
The U.S. government has determined that it will study tax increases for cryptocurrencies and will discuss tax increases for bitcoin mining, so the U.S. market will also see a great deal of uncertainty, as mining is subject to compliance, but more importantly, a comprehensive fight for power in the global energy race. If the US introduces a definitive mining tax increase bill, it is expected that North American arithmetic will stagnate and leave on a large scale.
Medium-term possible (after BTC halving)
A huge migration of hashrate will begin in 2024
The moment the halving comes, the hashrate should have broken through 450E, which means that the bitcoin price broke through $60,000, the miners’ earnings are comparable to the current moment, and if there is no continuous rise in the coin price as support, the global hashrate migration is coming.
High-priced energy countries, migrating to low-priced energy countries, it’s not a compliance issue here, it’s a survival issue. It is impossible to imagine how the areas where high energy, taxes, and construction costs are located will survive at the moment of the next round of halving.
This migration may be high energy miners exit, sell miners, flow to low-energy price countries, or may be, still involved, groveling into the game.
Large power consumption models completely out of the history stage, the old mine into the replacement wave
Would you believe that today there are still a large number of S9, T2T machines running recklessly in many mining sites around the world, because the mine owners their electricity costs are cheap enough.
When the 24-year halving comes, there are two kinds of statements, one is more than 40w machines, all eliminated, and another is more than 30w machines, here we do not make a prediction, but in the known network-wide arithmetic, at least 100E hashrate is still provided by the large power consumption models hashrate, but because many sites are electricity prepayment, is expected to halve the day there is a 5% drop in arithmetic, 1-2 months, there are 20-30% drop in arithmetic power.
These stagnant sites, will become participants in the market for additional hashrate, but according to the logic of hashrate migration, they are more likely to be recipients of arithmetic in high-energy countries, unless the halving comes at a time when manufacturers are offering prices that are on par with used phones. But it is difficult, because the migration wave is coming, there is no minimum, only lower.
Water-cooled technology becomes a major force after halving.
Here is not only the scale and number of water-cooled professional mining problem, water-cooled mining machine, will also do as a heat source, become a powerful participant in modern agriculture, spas, hotels, heating and other scenarios, have continued to participate and replace the past consumer heating equipment, and began to reconcile with traditional society.
In addition, in professional mining, because of the water cooling lower bad loss rate, stable hashrate online rate, good secrecy, excellent environmental protection properties, will also be recognized by more new investment groups. In the case of limited single-site and power resources, exemplary standardized water-cooled mining farms will emerge worldwide.
The supply chain system will also get a new change, the world will appear professional third-party brand and service capabilities of water-cooled integrated technology service providers, to solve the user miniaturization, medium-sized, large-scale, including heat source integrated application of different water-cooled scenarios needs.
Technology companies serving global miners will also emerge in terms of equipment upgrades, water-cooled panels, water-cooled accessories, power supplies and other technical modifications.
In the post-digging and expansion era, service teams and brands, will become the needed party in the mining industry, landing in the major mining regions around the world to achieve a unified brand, global deployment and global service.
Miners enter bonus period as manufacturers’ production scale declines
Because manufacturers of chips are required in advance to the chip factory reservation, and manufacturers in 23 years since the mining business has become mainstream, when the industry is stable, manufacturers will not give priority to selling production machines, more likely to sell in the mining machine, because it is expected that 24 years of major manufacturers will be a large vice down chip expectations, the upstream production scale will be controlled, arithmetic power rise will become orderly.
Next year’s hashrate appeared, the upstream if still production-oriented, not only face huge liquidity pressure, more likely to face huge operating losses, if the industry bear trend failed to improve, the upstream manufacturers because of liquidity depletion, bankruptcy is not possible. Therefore, according to the market shipments and corporate cash flow to do business estimates, sensible upstream manufacturers will control the chip procurement scale and shipment scale. Therefore the industry will usher in 1-2 years of recuperation opportunities, mining will enter a short-term dividend period.
In addition, because of the scarcity of energy points, the future is also unlikely to appear like 22 years 23 years, such a production scale, the upstream manufacturers dividend times past, the market fully into the energy points, the user era.
Productization of mining machines, productization of hashrate, more user-friendly products emerge
After the halving came, the higher the threshold for personal participation, but the industry has a brand guarantee, advantageous supply chain, stable energy point of the company will launch a personal-friendly mining machine products and arithmetic products.
Unlike the need to deal with electricity, sites, after-sales, and many other issues, the future of the product, will be a comprehensive solution type, the user only need to place an order through the system, service providers throughout the service, to solve the user energy point problems, maintenance problems, hosting problems, service providers to get paid for their services.
At present there are already sporadic products prototype, is expected to be reduced by half, the hashrate market completely exploded, become individual or small-scale mining phenomenal products.
Future one-click order to buy mining machines, automatic hosting, pay a deposit, upload the miner number, automatically collect coins every day, pay the monthly electricity bill on time, generate maintenance problems, pay according to the standard. Machine sale according to the industry, automatic transactions, completely solve the problem of product flow.
For the hashrate section, there will be hashrate leasing, hashrate finance, perpetual hashrate and other products, industry support may also appear hashrate NTF, hashrate securitization products, so that the financialization of products, to achieve efficient flow, rapid realization.
Future outlook (after the end of the next round of half reduction)
Renewable energy is the industry’s last card
The point that Bitcoin mining cannot be coordinated is to grab energy with traditional industries and people’s livelihoods. Although Bitcoin mining is actually not a big part of global energy according to distributed mining, when mining is centralized, it is easy to have a resource plunder situation in the area where it is located, thus facing regulation, punishment, and blocking at the political level.
The only siloed renewable energy, or siloed energy that cannot be commercialized, is undoubtedly the industry’s last card. With the development of energy storage devices, it has become possible for solar power to develop into a force for future bitcoin mining.
Traditional solar power, because of the problem of access to the acquisition, investment in realizing the time is too long, storage equipment is too expensive, and other comprehensive problems, can not enter the industry for large-scale use.
But with the decline in production costs, technological advances, the future will be bitcoin, as a solar power plant revenue supplement, shorten the investment cycle, which is undoubtedly a very good tool.
In addition, the associated gas of natural gas, pit gas, is not suitable for access to the main power generation network because of the purity, reserves. In Central Asia, Russia, including North America, there are more distributed resources, each small in size, around 10MW, but its good economic indicators, also suitable for power generation energy, used for bitcoin mining use. At present, because of the higher purchase cost of natural gas generating sets, this piece needs more equipment supply chain finance companies to enter, in order to more quickly promote the scale application of companion gas as mining energy landing.
In addition, like nuclear power generation, geothermal power generation, wind power generation, solitary network hydroelectric power generation and other energy sources are also good alternative energy for mining in the future, but these projects have large infrastructure costs. More specialized companies and capital are needed to enter in order to achieve faster replacement of traditional energy sources.
Countdown to the departure of traditional miners
As bitcoin mining becomes more and more difficult and the amount of mined coins becomes less and less, the countdown has been made for the departure of traditional miners who are oriented to short-term investment as revenue. It is expected that more than 60% of traditional miners will leave this round of halving, and it is optimistically estimated that at the end of the next 4-year halving cycle, it will be difficult to find traditional miners in the industry, and it will be more oriented to mining bodies with capital ties such as institutional mining centers, hashrate product centers, and national capital mining centers.
Future bitcoin mining becomes the new normal for long-cycle revenue
The future bitcoin price will break through a key indicator, because of the globalization legislation, regulation, taxation and other requirements of the full establishment, the price will enter a long period of stability, this time, bitcoin mining speculative properties will weaken, become a new force in the global financial investment products, according to the global major financial products, bitcoin mining will become 3 years or 5 years of financialized investment products It is no longer seen as a daily or monthly investment return. Instead, it will return to annualized investment income attributes like traditional investment targets.
More financial institutions, sovereign nations fully embrace bitcoin mining
Bitcoin will become a kind of asset marker, accepted by a wide range of financial institutions and sovereign states. Bitcoin will be able to easily realize the exchange function of bitcoin in countries all over the world, and bitcoin will become a kind of hedge asset in the financial system, becoming a kind of counterpart asset completely equivalent to gold, widely adopted by high net worth customers.
Major financial institutions and countries around the world will set up special digital asset management departments, bitcoin will achieve complete integration with traditional finance, and a bitcoin index will appear in the financial section, which will be a key indicator of global financial assets.
The upcoming halving, although raising the threshold of entry, is also in the direction of improving the industry’s service capabilities, so that we say goodbye to the past industry’s sloppy development, the industry into the era of branding, refinement management era.
For the team and company with technology, service, energy and flow capabilities, it will be a new opportunity. We will also see that the Tangicoders of the industry, as always, will stick to the idea of bitcoin and fight for it.
We also wish all mining participants, whether halved or not, that everyone can get what they want. Bitcoin has not failed anyone since its birth, and all we need to do is make friends with time.
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