How can miners increase their income by choosing the right mining machines?

In May 2020, Bitcoin will usher in the third block reward halving. Driven by the recent rising prices and the country's vigorous promotion of blockchain, many people outside the mining circle have begun to become interested in Bitcoin and Bitcoin mining.

As a miner, mine owner, and mining pool shareholder, I want to talk to my passionate new friends about the three elements of mining (mining machines, mining farms, and mining pools). Today we are going to talk about the selection of mining machines.

①When to buy the machine?

The essence of mining is to obtain rewards by maintaining the security and consistency of the Bitcoin ledger. The reward is Bitcoin. The income is closely related to the price of Bitcoin, so the time to buy the machine also determines your overall rate of return.

We are currently before the third halving. The two previous halvings have led to an increase in the price of Bitcoin. The subsequent news of the increase brought greater publicity effects, bringing in more people and funds, creating an astonishing bull market.

Therefore, it is relatively appropriate to buy mining machines at present, and you can make good profits. Mining is also an investment behavior. Don’t think about buying the machine at the lowest point and selling it at the highest price. As long as you can act within the rising range, you can get considerable returns.

Many friends are struggling over whether to buy coins or mine them. You can refer to the previous three articles "Coin trading to the left, mining to the right? How to choose"

②What machine to buy?

A mining machine that is stable, has relatively low power consumption and relatively high computing power is a good mining machine, and it is also the goal that mining machine manufacturers are constantly pursuing.

Why is a machine that meets these conditions a good machine?

We can conduct a specific analysis from aspects such as expenditure and benefits, the increase in computing power difficulty caused by machine updates, and brand factors.

The chip process of the mining machine determines the energy consumption ratio of the machine, and the energy consumption ratio determines your mining expenses.

What is the energy consumption ratio? For example, the energy consumption ratio of the first generation of the flagship s9 is 100W/T, and the energy consumption ratio of the new machine s17+ is 40W/T. The energy consumption ratio determines the proportion of your electricity bill (electricity bill is your expenditure)

For example, based on an electricity price of 0.38 yuan, the daily electricity cost per ton for s9 is 0.912 yuan, while the daily electricity cost per ton for s17+ is 0.36 yuan, which is 40% of the cost of s9.

The energy consumption ratio here leads to the concept of a shutdown coin price. When the computing power difficulty remains unchanged, the coin price drops to a certain price. If the output income of the mining machine is equal to the electricity expenditure, this price is called the shutdown coin price.

At this time, mining is not cost-effective. It is better to buy coins directly. The shutdown coin price is proportional to the energy consumption ratio. For example, the shutdown coin price of s9 is 55,000 yuan, and the shutdown coin price of s17 is 22,000 yuan. There is no doubt that the lower the energy consumption ratio of the machine, the longer it can last in the process of currency price decline.

Under the rules of Bitcoin mining, the revenue per ton will be adjusted accordingly with the adjustment of the overall computing power difficulty. It can be predicted that under Moore's Law of semiconductors, new machines will be continuously updated, the production capacity of machines will increase, and the difficulty will continue to increase. The BTC revenue per ton will gradually decrease.

Taking into account extreme risk situations (for example, the price of Bitcoin does not increase with the increase in computing difficulty for a period of time, or even falls), when the fiat currency income continues to decline, in order to survive and mine for a longer time, until Bitcoin rises to the ideal price in mind, it is best to choose a new machine with a low energy consumption ratio to ensure the relative stability of income in the long run.

In addition, many novices are advised not to calculate the static payback period when buying machines. Remember to take into account the increase in computing power difficulty. Calculate the dynamic payback period instead of the static period, and the rate of return will be relatively accurate.

3. About mining machine brands

My suggestion is to choose mainstream mining machine manufacturers, such as Bitmain, Shenma, Avalon, Xindong, Yibit, etc., which will have better guarantees in terms of supply capacity, performance stability, and after-sales service.

Be careful when choosing machines from many small OEM factories. Although the prices are relatively low, the machines may have inflated computing power, excessive power consumption, unstable firmware versions, or even be difficult to find the manufacturer when you need to return them for repair, and you may have to wait in line for one to two months before a successful repair is possible.

In summary, when purchasing a mining machine, it is recommended to choose a machine from a major brand with high computing power and low energy consumption. Theoretically, such a machine can mine for 2-3 years. According to previous experience, it can obtain excess returns in a bull market and survive the subsequent bear market to hoard good coins.

③Spot or futures?

The question of spot or futures is something that many new friends will be entangled in. I personally think that futures face more risks, such as whether the manufacturer can deliver the goods on time?

Some bad dealers may have sold short and failed to ship goods, etc. Even the black swan event of the Japan-South Korea trade war last year led to the delayed shipment of certain futures.

Another point is that for novices (small and medium-sized miners) in the current spot market, the spot price is actually roughly equal to the futures price plus the income from the waiting period (shipping time + express delivery time + shelf time).

Therefore, it is recommended to buy spot goods that you can see and touch, and it is best to ship the goods as soon as the payment is made. Basically, you can go to the mining farm and start running the machine 3-5 days after payment, and steadily enjoy the joy of BTC arriving in your account every day.

To sum up, we can draw the following conclusion: It is the right time to get involved in the mining industry. As long as you buy a brand new machine with a capacity of 50T or more, host it in a stable mining farm, and choose a conscientious mining pool, mining will definitely make money.

That’s all about my insights and thoughts on mining machines. Welcome to follow our official account. If you have more questions, you can communicate with me in the background. I hope that the followers of the mining professor can avoid pitfalls and make more money in the mining process.