How to choose a mining farm? Wang Wenguang, head of Bitmain’s mining center, gives these 6 suggestions

On April 21, BitDeer and eight major mining brands jointly held the "First 421 Flood Festival" live broadcast conference. Many well-known people in the industry expressed their views on the flood season, halving market and future industry development. Wang Wenguang, head of Bitmain Mining Center, analyzed the impact of halving on miners and mines at the meeting, and also gave his professional advice on the selection of mines.

The flood season is both an opportunity and a challenge for mining farms. Some mining farms will move to different locations depending on the water supply. The cheap electricity during the flood season is what miners and mine owners look forward to the most in a year, but mining farms will encounter many problems during the migration process, and for some mining farms, the cost of relocation may be greater than the benefits. So how should we choose? What are the "tricks" of mining farms during the flood season? How should miners choose a mining farm? BlockBeats interviewed Wang Wenguang, the head of Bitmain's mining center, and asked him to tell everyone about it.

BlockBeats: Could you briefly introduce the mining center? Is it the reorganized mining farm department? What businesses does it currently have?

Wang Wenguang: The mining center is a merger of the original mining farm department, asset department, operation and maintenance department, and overseas mining center. Currently, there are mining farm design, construction, operation and maintenance, repair, and external hosting services. Bitmain's mining center has more than 30 mining farms, some of which are self-built and some are managed by cooperative mining farms. We have been helping our partners design and transform the mining farm structure, improve operation and maintenance automation, and improve the level of maintenance.

BlockBeats: Currently, the most common sources of electricity are hydropower and thermal power. Which service does the Bitmain mining center provide more? Which one is more profitable?

Wang Wenguang: Strictly speaking, it is hydropower and grid power. The stability and price of these two types of electricity are different, so we put different machines according to their different characteristics. Because we have both hydropower and thermal power, we have a wide range of choices. What we do is to provide customers with the best configuration to achieve the highest returns.

BlockBeats: What preparations do mining farms generally make before the flood season arrives? What preparations do mining farms make after the flood season? Can you take the mining center as an example to briefly introduce the flood season, including whether the mining farm will be relocated and what the cost is?

Wang Wenguang: Before the flood season comes, there is a lot of work to do: electrical facility inspection, mine main body inspection, mine transformation (adaptation to new models), logistics support confirmation, etc., which is tantamount to the opening of a new mine. After the flood season ends, the machines are generally removed, and the main thing is to do safety protection settings.

As the value of mining machines increases, the computing power increases, and the cost of relocation also increases. What are the relocation costs I mentioned? The costs of on-shelf and off-shelf operations, operation and maintenance, mining revenue loss during relocation, maintenance costs caused by DOA, and mining revenue loss due to power outages. Every relocation is an actuarial calculation, which is becoming more and more sophisticated. In terms of trend, the greater the computing power of the machine, the greater the loss of relocation. Therefore, we cannot simply consider the low electricity price of hydropower. I believe that the situation of Sichuan hydropower in 2019 is still vivid in everyone's mind, because there are very few miners who relocate to generate income.

BlockBeats: After the halving, miners, mining pools, and mining farms will all be affected. If the price does not rise after the halving, how many mining farms are expected to shut down? Will the mining farms suffer a large loss in this case? How should they deal with it?

Wang Wenguang: There is no data that can directly show the shutdown data after halving, because different models match different electricity prices. However, according to our model, the computing power will be reduced by about 20% after halving, after all, there is a buffer of low electricity prices during flood season. From the current situation, more than 1/3 of the mines will reduce their load or shut down after halving. Now is a special moment for this industry. Everyone should work together for warmth. The mines should survive first and then live well. Some of our partners have already given us the cost price in early March, which is a very far-sighted approach.

BlockBeats: In 2019, the National Development and Reform Commission removed "cryptocurrency mining" from the "eliminable industries", which seems to be relatively favorable to the mining industry. So how is the situation of mining farms in terms of supervision? Is it still a gray industry at present, or will there be support from local policies?

Wang Wenguang: I think that the current domestic policy on mining is "neither encouraging nor supporting nor opposing". However, from the trend point of view, various places are moderately liberalizing, and many places have already regarded mining as an indispensable industry, such as Sichuan. This is a good start, indicating that the government has also understood the importance of mining as the underlying support of blockchain, and the important role of mining in alleviating the contradiction of energy supply. The country's energy system reform will move in a more market-oriented direction. With the strengthening of taxation and corporate self-discipline, I believe that the mining industry will become more and more popular with the government.

BlockBeats: We often see information in the community about mining farms looking for power resources for mining machines. What should miners pay attention to when choosing a mining farm?

Wang Wenguang: First of all, as I said at the Fengshui Festival, the mining industry has not yet developed into a completely 2C era. High-quality mines have no shortage of customers and will not attract investment all over the market. For miners of average size, there are still many choices of mines.

Here are some suggestions for you:

1. Try to choose an old mine. New mines have more problems, and old mines will be much better after running-in.

2. Choose a mine with a large total load, so that there is more room for maneuver and it is more stable.

3. Choose a mining farm with a good market reputation and cooperate with the company rather than individuals.

4. Do not cooperate with middlemen, but sign contracts directly with the mine owner.

5. Sign a formal custody contract and clearly define the responsibilities and obligations of both parties.

6. Choose a reliable operation and maintenance party. You should know that the machine is not just put on the rack, it also needs to operate normally to make money. A good mining farm plus good operation and maintenance can ensure smooth mining.

These are also a complete set of services that Bitmain Mining Center will provide to customers. Customers can choose mining farms with us, enjoy Bitmain’s operation and maintenance, stay with our machines, mine together and get through the halving together!