Six questions to Canaan Creative’s Sales Director Chen Feng: The most powerful mining machine in the A11 series has been released. Is it time to upgrade the mining machine?

In October 2019, Canaan released the latest Bitcoin mining machine Avalon A11 series for the first time. Among them, A1166 has a rated computing power of 68T/S, a maximum computing power of 73T/S, and an energy consumption ratio as low as 46J/T. This is the most powerful generation of Bitcoin mining machine in the past decade.

On the evening of October 17, ChainNode live broadcast room held a live broadcast with Chen Feng, the sales director of Canaan Creative and Avalon, on the characteristics and sales policies of the A11 mining machine. Afterwards, Babbitt had an exclusive conversation with Chen Feng. We raised six explosive questions about the A11 series of mining machines, mining, computing power in 2020, and Bitcoin prices. Let's see how Chen Feng answered.

▲Chen Feng (first from left), Xiaogui (founder of Bibi News), Junyao (host of ChainNode live broadcast room)

Question 1: What is the static payback period of the A11 series mining machines?

Today, the price of the coin is 58,000 yuan. According to the A1166 rated computing power of 68T, when the electricity fee is 0.36 yuan, 0.001314 bitcoins can be mined every day, with a daily income of about 78 yuan, an electricity fee of 27 yuan, and a daily net profit of about 51 yuan. Based on the price of 13,940 yuan after using the coupon, the static payback period is about 8.5 months (calculated at the current Bitcoin price). The price of A1146 is 9,999 yuan, corresponding to a static payback period of about 7 months.

The industry pricing rules will determine the price of mining machines based on the payback period. 6-8 months is currently the more "standard" payback period in the industry. The previous 3-4 month payback period is a thing of the past, unless the coin price experiences a sharp increase .

Question 2: When will the A11 series be shipped?

The A11 series is not a PPT mining machine, and the official mass delivery time is January-February 2020.

Generally speaking, the whole machine can be produced two weeks after the chip is delivered. The chip delivery is currently planned for late December. It can be foreseen that January to March next year will be the key nodes for large-scale arrival . What users get in January will basically be the first batch of mass-produced machines.

The higher the wafer yield of the chip production, the more high-computing chips can be produced on the same wafer. For mining machine manufacturers, a high yield means a large output, while a low yield means fewer machines. This is the only uncontrollable factor. The secret behind Avalon's insistence on high quality for so many years lies in its high standards and control over wafer yield.

Question 3: There are thousands of mining machine models. How to choose a reliable mining machine?

Miners always pursue high computing power and low power consumption, because computing power represents income and power consumption represents cost. A11 is a high-computing mining machine, and the power consumption is reduced through global optimization and customization, including overall optimization from chip architecture design to peripheral power supply, fan, main control board and other modules. Its power consumption is currently the lowest among mass-produced machines in the industry.

A1166 has a rated computing power of 68T/S and an energy efficiency ratio of 46J/T. A1146 has a rated computing power of 56T/S and an energy efficiency ratio of 57J/T. It is very competitive.

At present, large miners will consider a variety of factors when purchasing mining machines. In addition to the key factor of price, there are two other important factors: the stability of the mining machine and whether it is delivered on time. Assuming that the mining machine has a high damage rate and delayed delivery, the purchase cost will be increased invisibly, and the loss will be huge after comprehensive calculation. In addition, the residual value (liquidity) of the mining machine is also one of the considerations. Small and medium-sized miners, especially new miners, are more sensitive to the price of mining machines.

We often hear that the damage rate of mining machines during transportation is high. There are many factors, mainly the uneven quality of mining machines and improper transportation and violent loading and unloading. The stability of Avalon mining machines is well-known in the industry. Everyone thinks it is very stable and there will be no small problems. This has always been the case for the 8 series, 9 series, and 10 series. The A11 series also improves the heat dissipation capacity.

In addition, we have no delayed delivery, ensuring that customers can receive the goods on schedule and start excavation in time.

▲Avalon A1166 mining machine

Question 4: Who is mining? Do small miners still have a chance?

The threshold for mining is getting higher and higher, and institutional players are entering the market. They can purchase tens of thousands or even hundreds of thousands of mining machines in a batch.

Large institutions have cloud computing power, some of which they mine themselves and some of which they sell to retail investors. Some large institutions do not look at short-term returns. They do not buy Bitcoin directly, but they are willing to obtain clean Bitcoin through mining. Buying Bitcoin is actually a bullish speculation to earn a premium. Buying mining machines for mining is the lowest-cost investment method to obtain Bitcoin.

Avalon mining machines are very attractive to customers due to their good cost-effectiveness and stability, and large miners will make their own comprehensive judgments.

Even so, small and medium-sized miners with smaller demand still exist. They can also find electricity and locations suitable for mining, and it is more convenient to relocate and resell machines.

Question 5: What will the computing power be like in 2020?

The dry season is coming, and a large number of small computing power machines will be temporarily shut down due to the lack of suitable mining farm hosting. The currency price will remain sideways and the profit will decrease, and the computing power will drop in the short term.

Although new machines have been shipped, the actual shipment volume cannot offset the loss of computing power due to a large number of shutdowns, so the computing power will not surge before the end of the year. However, computing power is ultimately linked to the rise in coin prices, so it depends on the coin price.

In short, Bitcoin is becoming increasingly difficult to mine, and it is better to mine early than late.

Next year, new machines with high computing power will be shipped, and the computing power will increase. However, based on the tape-out situation we know, the shipments of other friendly companies will not be very large, because they will not rashly tape out a large number of mining machines. In 2017, due to the good market conditions, mining machine manufacturers put many machines into production, but a large amount of inventory was generated. This time, they will not play that way.

Let's talk about a special case. This year, the demand for thermal power exceeds the supply. Most of Xinjiang and Inner Mongolia no longer accept old machines with low computing power. New machines with high computing power are the first choice. The main reason is that many newly built mining farms are designed according to high computing power models. The machine positions are limited. The old machines with low computing power not only take up space but also cannot digest the load. Moreover, if the market fluctuates, the machine may be shut down at any time. For the mining farm, the new high computing power machine can operate at full capacity, the machine position utilization rate is higher, and the subsequent operation and maintenance management of the new mining machine is also more convenient.

At present, as new mining farms are concentratedly built and put into operation in November and December, the market has a great demand for new high-computing power machines, so our sales are relatively good. The ones in October were sold out early, and the ones in November and December are almost sold out. Many major customers are already planning to use the machines in the first quarter of next year.

Question 6: How will Canaan Creative fight in 2020?

In the future, Canaan will continue to expand its business into two major sectors.

The first is AI chips, which will grow to a scale of tens of millions of US dollars in 2020.

The second is the mining machine. The A11 series will be the main model in the next six months. In 2018, we launched the world's first 7nm mining machine. 7nm is definitely the direction in the future . Next year, we plan to launch the second generation of 7nm models. In addition, we will increase overseas expansion to increase Avalon's brand awareness and overall market share.