Crypto Mining Solely A Financial Products for Chinese Individual Miners in Rainy Season 2020
“For a small miner like me, just invest in to pay the electricity bill, and wait for the profits, even for large miners in the future.”
Said Mr. Huang, a Chinese crypto miner in an interview. For some small miners, in the current market, considering mining as a sideline is a more relaxing choice.
Several research reports have pointed out that Chinese miners dominate over 65% of the global bitcoin network hashrate, so bitcoin prices, electricity prices, policies, halving and other events have a profound impact on miners in China.
From last year to now, in Sichuan, where more than 50% of China’s bitcoin network hashrate is concentrated, mining related policies have been making constant noises.
China’s Sichuan province known for bitcoin mining has recently issued a notice encouraging the blockchain industry to help consume the excessive hydroelectric energy there ahead of the rainy season usually starting in May. However, the Chinese province of Yunnan, one of the key crypto mining areas like its neighboring province Sichuan, has reportedly started pressuring cryptocurrency mining businesses operating in the region, according to 8btc’s previous report.
Uncertainty in Rainy Reason
There is also great uncertainty in the basically regular rainy season. In fact, the delay of rainy season, rainstorm and geological disaster in 2019 has brought huge losses to miners in China’s Sichuan.
“Generally, the electric charge is about 20 cents, but when the miner is shut down due to the extreme weather and other reasons, the return cycle of a miner will be prolonged, and the average electric charge will rise to 40 cents or even 50 cents if the cheap electricity is missed.”
Said Mr. Huang, it is estimated that the cycle of return may be increased by one month when the miner is shut down for a day.
Crypto mining is becoming more and more specialized and large-scale, and it is difficult for individual investors to participate in. In the future, large-scale and joint mining will become mainstream. Among them, the cooperative relationship between mining machine investors and mining machine manufacturers may be more common.
A miner once encountered the situation that the crypto farm owner reduced the computing power. The farm owner claimed that the miner had stopped working on the grounds that the policies and power supply. However, due to geographical barriers, the miner could not know the real situation, which made him suffer some losses.
Individual miners certainly can’t compete with large miners in terms of computing power, and even if the mining difficulty is reduced, they can’t be saved as well.
The bitcoin network has just seen one of its biggest adjustment in mining difficulty. According to data from BTC.com, the mining difficulty has posted an increase of nearly 15% from 13.73T to 15.78T. The difficulty that retargets every two weeks, or 2016 blocks, has previously undergone a compounded 15.29% fall after two consecutive decreases since bitcoin’s third halving.
For individual miners, regarding crypto mining as a financial product, or a sideline will be more acceptable for them. Now the mining industry is more and more mature, and the small miner is gradually eliminated by the market.