8btc Online Summit | RRMine Global CEO Tsou Yung-Cheng and Veteran Bitcoin Miners Talk Halving amid Economic Shock
At the 8btc Global Partner Online Summit, RRMine global CEO Tsou Yung-Cheng, along with four veteran miners, discussed how the upcoming bitcoin halving is influencing the mining sector and how RRMine is doing amid the global economic shock of coronavirus.
The 8btc Online Summit is a two-month virtual conference that hosts an assembly of industry leaders in the crypto space, including mining rig manufacturers, mining service providers, cryptocurrency pool operators, crypto exchanges, investors, and other individuals passionate about crypto. At the March 31 forum, we have invited the global CEO of RRMine along with four heavyweight miners/investors of the mine to discuss a wide variety of subjects.
Speakers joining the discussion include:
Tsou Yung-Cheng: RRMine global CEO, official member of Forbes councils, certified blockchain professional, owns more than 20 years of experience in multinational operations
Li Wei: tech geek, technical investor, undergraduate in computer science and technology of Tsinghua University, further educated in finance in University of International Business and Economics, heavyweight miner with RRMine
Xu Weizhuo: has 12-year experience in traditional education industry, heavyweight miner in RRMine
Dai Yi: initiator of Asia Blockchain Technology Association, doctoral candidate in business administration at ISC Paris, node investor of RRMine
Sis V: CEO of Hashrate Club, ECNU MBA/Emlyon PGM, node investor of RRMine
What impact the bitcoin halving will have on bitcoin mining output is one of miners’ most concerned question. Regarding this, Tsou said that “the halving will not cause a sharp reduction in bitcoin production and miners who have survived from the March market will see no big impact, RRMine will have go through the halving event smoothly and steadily. The bitcoin halving is scheduled to take place around May 13. We have made a clear judgment based on the market cycle and the transmission effect. While the hashrate market contains various factors and relatively complex transmission process. Each short-term prediction data may have small errors, but the long-term direction is accurate.”
The halving will have no big impact on miners, BTC production in late May may be higher than that before the halving
Since March 25, bitcoin price has been hovering around $6,500. On the following day on March 26, the mining difficulty saw a big drop, which shows that bitcoin price’s influence on mining was quickly reflected, leading to the whole network’s hash power decrease to 99E, some mining machines shut down, mining difficulty drop by 15.95% and the mining output increase by 15%.
Speculation 1: It is estimated that the mining difficulty will see another adjustment on April 9, on which the price of bitcoin will continue to exert its effect. The difficulty will be drop by around 10%, and mining output will increase by about 10%.
Speculation 2: From April 9 to May 7, there will be two more difficulty adjustment before the halving. If bitcoin sees no big changes in the price, the hashrate of the bitcoin network will remain stable basically – around 100E, and bitcoin output will also remain stable until halving.
As a result, miners who have keep their machines running since March will see their production increase by around 25 percent until the halving occurs.
The third bitcoin halving will take place sometime around May 13, 2020. After that, the reward for mining a new block will be halved to 6.25 BTC from the current 12.5 BTC. The bitcoin entering circulation will reduce by 50%. While for miners who have kept their machines running all the time may see only 25% drop in their block reward as their mining output has increased by 25% ahead the halving mentioned above. In such a context, whether from the duration of the time period or the mining difficulty adjustment before and after the halving, the coming halving will have little impact on the miners who are running their machines all the time even in March.
On the day of the halving, it is likely 40% of mining rigs will shut down, and then bitcoin hashrate will drop from 100E to 60E. That is, within 1 to 3 weeks the difficulty of the entire network will reduce by about 40%, which will lead to a big increase in bitcoin production. The bitcoin mined at the end of May, compared with that in March, will be temperately reduced by 25% on the halving day, and will increase by about 15% when the mining difficulty sees another drop in 1-3 weeks. When the wet season comes in early June, bitcoin output and the hashrate will reach a new dynamic balance, then there comes the phase that tests various platforms’ cost per hash and their operations.
RRMine, being confident and optimistic, has made an early layout ahead of the halving
RRMine has been in operation since 2017 and gone through some critical points of the market smoothly. By analyzing the operation logic of the mining market and making effective use of its dynamic rules, the platform has made layout and response measures as early as possible. By using the hashrate cost advantage far below the market average level, the positive operation logic of financial risk control, the ability to fight back in the business positioning, as well as the diversified hashrate derivative products, RRMine helps users to fight against the potential market risks from a multi-dimensional. RRMine users will not be greatly affected in the yield from the cloud mining contract even after the block reward is halved. With the new dynamic balance of the whole network established and the arrival of the wet season, the difficulty in mining will reduce, the mining market will be more optimistic after digestion and consolidation.
Heavyweight miners’ opinion on bitcoin halving
Li Wei: the halving is a supply-driven catalyst for technological innovation
Tech investor Li Wei said that bitcoin has proven its value after a decade of development. The relationship between the halving effect and the bull market is not obvious, the halving is a reduction in the supply and serves as a supply-driven catalyst for technological innovation for the mining industry. However, the price is determined together by the supply and demand, and the adjustment of the market to the price is a process. That is to say, after the reward is halved, the price will depend on the market’s demand for bitcoin. In this sense, instead of the halving, the economic situation, changes in the international situation may trigger the next bull market. From a technical perspective, cloud computing industry, after a decade of development, has formed a complete ecological system. In the past, cloud computing used to provide storage service, the demand for computing power in the future will become a new focus. Cloud computing has experienced two versions, one is the centralized computing power represented by early day Google cloud and Ali cloud, the other is the decentralized computing power based on blockchain like RRMine’s mining activity, and the latter has become an important trend.
Xu Weizhuo: out of the traditional channel, discover the new world
Xu Weizhuo, a traditional education investor-turned miner, believes that in terms of supply and demand, bitcoin production (supply) globally will decrease from a total of 1,800 BTC per day to 900 in May this year, while the demand for bitcoin will keep the same and may even increase. In this dynamic supply and demand relationship, bitcoin’s deflation model will push its price and value higher, so Xu is bullish on bitcoin in the long term. In the past two halvings, the bull did not come immediately after the halving. The bitcoin price may stay sideways for a period of time or even see a decline after the halving, but for miners, it is wise and the right way to keep mining and hodling bitcoin. Moreover, the halving, plus the price keeping unchanged or falling, will squeeze out some medium and small-sized mines with higher mining costs, which will lead to the hashrate decline, mining difficulty drop, and then bitcoin production increase. In the face of the uncertainty of the future, we need to keep learning and growing, and to break the stereotyped thinking that to acquire wealth by time. Xu said that she has done that way by investing in RRMine cloud mining contracts.
Sis V: traditional finance and mining industry share similar logic, there are unequal opportunities
The CEO of Hashrate Club thinks that the blockchain is like the Internet in 2000, which is full of opportunities. The halving will eliminate a number of outdated old machines and small and medium-sized miners with low mining efficiency, in such a context, the industry will be reshaped. Those who have made preparation and layout in advance will seize the opportunity. The price of bitcoin may not surge immediately after the halving, which would lead to mining difficulty decrease and give miners a chance to continue their bottom-hunting. The traditional finance and the mining industry is like two parallel worlds, sharing similar logic and unequal opportunities. As a node investor who has been deeply involved in RRMine’s business since its early stage, V has witnessed the development of cloud mining industry. Through practice, she believes that what a man can earn is the money within his scope of cognition. Hopefully, more people will find their own time machine in the parallel world (digital world) and seize this opportunity.
Dai Yi: looking at the halving from the financial cycle
Dai Yi, founder of Asia Blockchain Technology Association, believes that traditional finance has cyclical rules for hundreds of years. The market performance after the past two halvings and non-linear thinking can help us deduce the trends of the market. Dai suggests investors review the development history of the traditional finance and bitcoin, from which one can get a glimpse of some market trends. Investing itself is something that only a few people who can delay gratification and refuse to follow the market sentiment can succeed. Miners willing to commit to the primary market for bitcoin mining are more aristocratic than speculators in the secondary market, as they are able to dig deeper into the underlying values and indifferent to short-term gains or losses. In the face of the current financial turmoil, the mining industry is the production combination whose cost is lower than the secondary market, and during this period, miners will have discounts from mining machine makers, and electricity and site rental will be subsidized by the state, and cloud mining clients could have the opportunity to gain more hashrate at low costs. I believe that many RRMine users agree with me on that. They understand the underlying logic of the cloud mining industry, what we need to do is to withstand the cycle fluctuations and all will be paid off.