Shutdown, loss, suffering… The halving hasn’t come yet, but a mining disaster is about to happen?

At 9 p.m. on February 4, Jiang Zhuoer, founder of the Litecoin Mining Pool, posted on Weibo that he had a mine in a remote suburban area and that the mining machines were forced to shut down and not allowed to resume work.

This annoyed him. "Regular temperature measurement, roll call, and strict prohibition of going out are understandable, but what good does shutting down mines do for epidemic prevention? If things continue like this, most people (especially frontline workers who have no income to work) will die of poverty before an epidemic even occurs."

This video has been read more than 120,000 times on Weibo and received more than 250 comments, which shows that the industry is paying close attention to it.

As February begins, the novel coronavirus epidemic is still ongoing. Dingxiang Doctor data shows that there are 24,363 confirmed cases nationwide, an increase of 3,889 cases from yesterday (4th), and the number is in an upward curve.

As a result, the national prevention and control measures to combat the epidemic have been further tightened, and the lockdown measures are infiltrating towns and even villages across the country. Take Yueqing, Zhejiang Province, for example. The entire city was closed for two weeks, and all external traffic was closed. No one was allowed to enter or leave. Surveillance cameras deducted 6 points and fined 300 yuan. Residents all used temporary passes and could go to designated markets twice a week to buy daily necessities.

Originally, mining practitioners thought that mines are often located in remote areas and do not require a large number of staff. As long as there is electricity and Internet, they can operate normally. Moreover, there are always staff on duty at the mines during the Spring Festival every year. Mining is the safest industry and will not be affected by the epidemic.

However, miners are now in a state of panic. The mines under construction have been shut down, the mining machines are locked in the warehouse and cannot be put online, the operation and maintenance personnel cannot enter, and the resumption of work is nowhere in sight...

The bull market did not come, the halving did not come, but a protracted war without even any self-rescue measures came first.

People can’t get in, tens of thousands of mining machines are gathering dust in the mine

Lao Xu is a big miner who has his own mines in Yunnan, Guizhou, Sichuan, Xinjiang, Inner Mongolia and other places. In response to what Jiang Zhuoer said, Lao Xu said that the operating mines have not been forced to shut down due to the epidemic. They are still operating normally under the operation and maintenance of the on-duty personnel.

In Inner Mongolia, more than 10,000 mining machines are lying quietly in one of his mines. Because electricians cannot enter the mine, these mining machines cannot be powered on and are gathering dust.

It is a difficult period now. Most mining machines use thermal power as energy and are located in Xinjiang and Inner Mongolia. Affected by the epidemic, Xinjiang's policy is that people entering Xinjiang must be quarantined for 20 days and then self-isolated for 14 days. This has caused many mines to be unable to resume work after the holiday.

The impacts brought about by this include the inability to repair machines in a timely manner when they are damaged. Yin Changming, the founder of Xiaoqiang Mining Machine, previously told Babbitt that he has a mine that can accommodate 4,000 machines. Four operation and maintenance personnel were arranged during the Spring Festival. They go to the mine for work and return to the living area after get off work.

As a result, the sudden policy restricted three operators from entering the mine, leaving only one operator to maintain the roaring machine. When the machine broke down, he had to patch it up by himself. Fortunately, Xinjiang's electricity and network are relatively stable, and there has been no large-scale loss of computing power.

Jiang Zhuoer said in an interview with Babbitt that what he encountered was an isolated case, where only one of dozens of mines was shut down, but it is not ruled out that other mines will be shut down in the future. Other mines cannot have materials and personnel entering or leaving, which also has a great impact on mine maintenance.

Currently, the situation where employees are unable to enter mines after the New Year is happening all over the country.

The mine with a load of 100,000 kilowatts has stopped working, and the flood season plan may be ruined

Mining has never been an easy business, and miners must plan ahead based on their own judgment. At present, the epidemic has stopped everything that should have been carried out step by step, and they were caught off guard.

In Yunnan and Guizhou, Lao Xu has a 100,000-kilowatt mine under construction, but transformers and other equipment and workers are unable to enter the construction site, and the mine is completely shut down. This means that the mine will inevitably be powered on later.

Captain Yu of the Mining Association is in the same situation as Lao Xu. The mines he has suspended construction are losing millions of dollars a month. "Capital has costs. I can't get electricity or use the machines. More than 1,000 new mining machines are sitting in the warehouse."

According to Captain Yu, investing in a mine is not a one-time job. Building a new mine is an ongoing process. In the mining industry where profits are calculated in minutes, the suspension of work really pains him.

"The loss is huge," he said. "We don't know what will happen during the flood season. If we miss the opportunity, it will be over."

In May, the southwest region will enter the flood season, which is an annual event for Bitcoin mining. The epidemic has completely disrupted their layout and rhythm. Last year, they hoped that the flood season would come earlier. This year, they hope that the flood season will come later, because there is no time to build the mine, and only if it comes later can they make a profit.

Is there any solution?

"The government won't let us in. There's nothing we can do but wait." What worries Old Xu even more is that he estimates the situation will not improve until after the fifteenth day of the first lunar month. But even then, people entering will definitely have their temperature taken and be quarantined, and there's no telling when they can start work.

As things stand, mining is no less affected by the epidemic than other physical industries. "We can't say that everyone will stop working because of the epidemic, right?" Old Xu is not in a good mood, but he still expects the situation to improve in late February.

Before the halving, the hash rate may decrease instead of increase, and the price of Bitcoin may rise

Previously, Babbitt interviewed Canaan Creative’s sales director Chen Feng, who said that the major manufacturers currently do not have many mining machines in stock, and the factories are temporarily unable to start production. Coupled with logistics difficulties, it can be inferred that there will not be a large number of mining machines online in the first quarter.

Lao Xu also agreed with this statement, "I think the computing power will not increase in the short term, and may even decrease."

Xiong Yue, director of the Bixin Research Institute, is more pessimistic: "In the first half of the year, there is no way to increase the computing power."

On January 28, the difficulty of Bitcoin mining was adjusted to 15.47T, an increase of 4.67%. Based on this, the average computing power is calculated to be about 110E, which is the highest since the birth of Bitcoin. The computing power is a valuation based on the difficulty. The real-time computing power cannot be calculated, but judging from the average computing power in the past three days, at least the computing power of the entire Bitcoin network has not been reduced due to the epidemic.

In the future, the computing power may decrease instead of increase, so what will happen to the price of Bitcoin? Lao Xu and Captain Yu both believe that it should increase slightly.

“I don’t think the halving will bring about a big bull market, but because of the anticipation of the halving, there will be a market, and as profit-takers sell, prices will return to normal. At the end of 2019, we were thinking about making a big move, but now, everything is different.”

"There's nothing else to invest in, we can only put in coins," Captain Yu said sarcastically.