Cryptocurrency mining revenue report for August: The payback period for mining machines has been extended by an average of 30%

With the rise in cryptocurrency prices, mining profitability has increased significantly compared to the beginning of the year, and the mining industry has fully recovered. Due to the successive delivery of mining machine orders in the first half of the year, BTC computing power has continued to increase; at the same time, the current shortage of mining machine supply still exists. After major mining machine manufacturers launch new mining machines, the entry of high-performance and high-computing-power mining machines will cause inefficient mining machines to be eliminated from the market.

Original title: "TAMC Research Institute | Mining Revenue Report in August 2019"
Author: TAMC Research Institute

Key points of this report:

• Coin price: The overall market fell 8.54%, and the top ten mining coins fell an average of 16.98%

• Total network computing power: The average computing power fell by 0.59%, and the BTC computing power remained high

• Unit computing power income: The average daily income of the top ten currencies fell by 20.16%

• Mining machine cost: Mining machine prices rose slightly; graphics card prices remained stable, with an average price change of -1.03%

• Mining revenue analysis: The payback period of mining machines is extended by an average of 30%

1. Introduction

This report provides mining revenue of mainstream POW mining coins, and calculates the static payback time based on the unit computing power revenue at the beginning of the month, for reference only. There are three main factors that affect the payback period of miners: coin price, total network computing power and mining machine price. The shorter the payback period, the better the current market's money-making effect, and the higher the possibility of potential large capital entering the mining market. When the mining revenue continues to be unable to cover its costs, a large number of miners will choose to turn off the mining machines.

With the rise in cryptocurrency prices, the current profitability of mining has increased significantly compared to the beginning of the year, and the mining industry has fully recovered. Due to the successive delivery of mining machine orders in the first half of the year, BTC computing power continues to increase; at the same time, the current shortage of mining machine supply still exists. After the major mining machine manufacturers launch new mining machines, the entry of high-performance and high-computing-power mining machines will cause inefficient mining machines to be eliminated by the market.

2. Coin price: The overall market fell by 8.54%, and the top ten mining coins fell by an average of 16.98%

In August (August 1, 2019 - August 31, 2019), the market showed a trend of shrinking volume and correction. At the beginning of the month, it basically fluctuated in the range of 270 billion to 300 billion US dollars, once breaking through the 305 billion US dollar mark, and fell below 250 billion US dollars at the end of the month to return to the low point in the past three months; from the perspective of volume, the return of off-site funds this month was insufficient, the upper chip pressure level was under pressure, the upward momentum was curbed to a certain extent, and the market sentiment remained cautious. As of the beginning of September, the total market value of global blockchain assets was 269.05 billion US dollars, down 25.11 billion US dollars from August 2019, a drop of 8.54%.

Figure 1 Market trend, source: CoinMarketCap, TokenMania

Figure 2: Price fluctuations of mainstream mining currencies this month, source: CoinMarketCap, TokenMania

In August, the top ten mining currencies all fell in the middle of the month, with an average price drop of 16.98%, and ZEC's price drop ranked first; at the end of the month, ETC's price closed up, breaking out of an independent trend. Among the top ten mining currencies this month, only ETC rose by 8.41%, and the prices of the other nine currencies fell, including ZEC, which fell by 30.05%, LTC, which fell by 29.52%, and DASH, which fell by 26.04%. Generally speaking, a fall in currency prices will extend the payback period of mining machines.

3. Total network computing power: The average computing power dropped by 0.59%, and the BTC computing power remained high

In theory, the proportion of computing power controlled by miners in the entire network determines the success rate of their mining. The higher the proportion, the greater the possibility of miners receiving rewards. At the same time, the increase in the computing power of the entire network will lead to a relative increase in the difficulty of mining for miners.

Table 1: Computing power of mainstream mining currencies in the past three months, data source: Block Explorer, TokenMania

Figure 3 Changes in the computing power of mainstream mining currencies this month, source: Block Explorer, TokenMania

The hashrate of the top ten mining coins fluctuated this month, with the total hashrate falling by an average of 0.59%, with ETC ranking first in terms of hashrate increase. Rising coin prices are usually conducive to attracting new hashrate. This month, the hashrate of 5 coins increased, with ETC up 36.19% and ETH up 8.24%. BTC hashrate remained high, breaking through 90E by mid-September. The hashrate of 4 coins, including LTC and BSV, fell, with LTC down 31.72%, BSV down 16.31%, and DASH down 11.27%. LTC's hashrate fell the most this month, mainly due to the fall in miners' income as LTC production cuts were implemented and the coin price fell.

Figure 4 Changes in the computing power of mainstream mining currencies in the past six months, data source: block browser, TokenMania, Note: 1M=10^6Hash/s, 1G=10^9Hash/s, 1T=10^12Hash/s, 1P=10^15Hash/s, 1E=10^18Hash/s

4. Unit computing power income: The average daily income of the top ten currencies fell by 20.16%

Unit computing power income refers to the daily mining income calculated based on the proportion of unit computing power of different currencies in the entire network and the fluctuation of currency prices, excluding the impact of mining machine costs. Taking Bitcoin as an example, the unit computing power income refers to the RMB income that can be obtained from 1THash/s computing power in a single day. In theory, the computing power controlled by miners is proportional to the daily income.

_Table 2 Daily income per unit of computing power of mainstream mining currencies (unit: yuan), data source: TokenMania, Note: There are differences in the minimum unit of computing power between different currencies: BTC is 1THash/s, ETH is 1MHash/s, BCH is 1THash/s, BSV is 1THash/s, LTC is 1GHash/s, XMR is 1K_Hash_/s, Dash is 1GHash/s, ETC is 1MHash/s, ZEC is 1KHash/s, DCR is 1THash/s_

Figure 5 Changes in unit computing power revenue of mainstream mining currencies this month, source: TokenMania

Figure 6 Changes in the unit computing power income of mainstream mining currencies in the past six months. Source: TokenMania

Affected by the price correction and the increase in the total network computing power, the daily revenue per unit computing power of the top ten mainstream mining currencies fell this month, with an average drop of 20.16%. Only the daily revenue per unit computing power of BSV rose slightly by 0.68%. This month, the daily revenue per unit computing power of 9 currencies fell. Due to the reduction in production and the decline in currency prices, the daily revenue per unit computing power of LTC fell the most this month, down 45.49%; during the same period, ZEC fell 25.31%, XMR fell 25.28%, DCR fell 21.98%, and BTC fell 17.51%.

5. Mining machine cost

Due to the different encryption algorithms of various currencies, the current types of mining machines are mainly divided into ASIC mining machines and graphics card mining machines. Due to the specificity of the former, the price of its mining machines is more obviously affected by the currency price. Among the top ten mainstream mining currencies, only XMR does not have an ASIC mining machine. Although ETH and ETC have ASIC mining machines, their advantages over graphics card mining machines are not obvious. The rest of the currencies have been occupied by ASIC mining machines.

Table 3 Encryption algorithms of mainstream mining currencies, source: TokenMania

5.1 ASIC Mining Machines: Mining Machine Prices Slightly Rising

In August 2019, the prices of mining machines from the three major mining machine manufacturers were basically stable. As the supply shortage problem still exists, the prices of second-hand mining machines continued to rise. In early September, the spot price of Canaan Creative's mining machines increased by an average of 1.07%, and the spot price of Bitmain's mining machines decreased by an average of 0.24%. The price on the official website of Ebang International showed no price increase, but the mining machines were all sold out. Due to the drastic changes in the supply and demand relationship of mining machines and the great impact of market fluctuations, price statistics are for reference only.

Table 4 Price changes of mainstream ASIC mining machines, source: Bitmain, Avalonminer, Ebit, TokenMania

5.2. Graphics card prices: Graphics card prices are stable, with an average price change of -1.03%

Due to different encryption algorithms, ETH and other mining machines currently use GPU graphics card mining machines, and their core components are customized mining motherboards equipped with 6 to 12 graphics cards. Due to the large number of sales channels for graphics cards, prices in different regions will vary. The following data is for reference only.

Figure 7 Price changes of various graphics cards this month, source: Tmall, JD.com, Amazon, TokenMania

Figure 8 Graphics card price changes in the past six months, source: Tmall, JD.com, Amazon, TokenMania

The average price of eight sample graphics cards this month dropped by 1.03%. For graphics cards priced at 1,000 yuan, Nvidia's GTX1060 dropped by about 5.89%, while AMD's RX580 rose by about 4.55%. For mid-to-high-end graphics cards, Nvidia's GTX1070Ti dropped by about 6.9%, while the prices of other graphics cards remained the same.

6. Mining revenue analysis: The payback period of mining machines is extended by an average of 30%

According to the full network data of each currency, according to the full network computing power data of each currency, assuming that the electricity fee is uniformly 0.45 yuan, the static payback period of mining for each sample mining machine is calculated as shown in the following table (for mining machines that can mine different cryptocurrencies, the shortest payback period is selected).

Table 5 Payback period of mainstream cryptocurrency mining machines, data source: public data compilation, TokenMania

This month, the payback period of Bitcoin mining machines for BTC and BCH is similar. The seven mining machines with the shortest payback period are: Antminer S9K (191 days, BCH), Antminer Z11 (198 days, ZEC), Avalon 1066 (239 days, BCH), Avalon A921 (240 days, BCH), Avalon A920 (241 days, BCH), Ebit E11 (248 days, BCH), Avalon A850 (249 days, BCH); the six mining machines with the longest payback period are: Antminer L3++ (shutdown days, LTC), Antminer D5119G (9594 days, DASH), 1060 (6G) 6 card (1652 days, ETC), RX5806 card (1072 days, ETC), Antminer DR535T (635 days, DCR), Ant S17Pro53T (415 days, BCH).

The five sample BTC mining machines with the shortest payback period are: Ant S9K (191 days), Avalon 1066 (239 days), Avalon A921 (240 days), Avalon A920 (241 days), and Ebit E11 (248 days); the four sample BTC mining machines with the longest payback period are: Ant S17Pro53T (415 days), Ant S17Pro56T (415 days), Ant S17Pro50T (409 days), and Ant S1753T (404 days).

On the whole, among the sample mining machines, BTC mining machines have a faster payback period, with a payback period of basically 200-400 days this month, and the payback period of most mining machines has been extended by about 30% compared with last month. On the other hand, the payback period of graphics card mining machines in the sample this month exceeds 1,000 days. Currently, the payback period of purchasing a new graphics card for mining is long and the risk is relatively high.

[Note] The above payback period is a static theoretical payback period. There is a certain deviation between this payback period and the actual payback period and it is for reference only.

Figure 9 Comparison of the return on investment of mainstream currencies in the past three months, source: TokenMania

The sample mining machine data with the shortest payback time is selected as the payback time of the cryptocurrency, and the statistical results are shown in Figure 9. The payback period of each currency has generally been extended this month, and the payback time of BTC, BCH, and BSV is basically around 200 days; as the LTC mining output is halved and the currency price falls, the payback period of the sample mining machine has been significantly extended.

7. Conclusion

With the rise in cryptocurrency prices, mining profitability has increased significantly compared to the beginning of the year, and the mining industry has fully recovered. Due to the successive delivery of mining machine orders in the first half of the year, BTC computing power has continued to increase; at the same time, the current shortage of mining machine supply still exists. After major mining machine manufacturers launch new mining machines, the entry of high-performance and high-computing-power mining machines will cause inefficient mining machines to be eliminated from the market.

Currency price: The overall market fell by 8.54%, and the average decline of the top ten mining currencies was 16.98%. In August (August 1, 2019 - August 31, 2019), the overall market showed a trend of shrinking and correction. At the beginning of the month, it basically fluctuated in the range of 270-300 billion US dollars, once breaking through the 305 billion US dollar mark, and fell below 250 billion US dollars at the end of the month to return to the low point in the past three months; from the perspective of volume, the return of off-site funds this month was insufficient, the upper chip pressure level was under pressure, the upward momentum was curbed to a certain extent, and market sentiment remained cautious. As of the beginning of September, the total market value of global blockchain assets was 269.05 billion US dollars, a decrease of 25.11 billion US dollars from August 2019, a decrease of 8.54%.

The top ten mining currencies all fell in the middle of the month, with an average price drop of 16.98%, and ZEC's price drop ranked first; at the end of the month, ETC's price closed up, breaking out of an independent trend. Among the top ten mining currencies this month, only ETC rose by 8.41%, and the prices of the other nine currencies fell, including ZEC, which fell by 30.05%, LTC, which fell by 29.52%, and DASH, which fell by 26.04%. Generally speaking, a fall in currency prices will extend the payback period of mining machines.

Total network computing power: The computing power fell by an average of 0.59%, and the BTC computing power remained high. The rise in coin prices is usually conducive to attracting new computing power to enter the market. This month, the computing power of 5 coins increased, of which ETC increased by 36.19% and ETH increased by 8.24%. The computing power of BTC remained high, breaking through 90E by mid-September. The computing power of 4 coins, including LTC and BSV, fell, of which LTC fell by 31.72%, BSV fell by 16.31%, and DASH fell by 11.27%. This month, the LTC computing power fell the most, mainly due to the fact that the LTC production reduction was implemented and the coin price fell at the same time, and the miners' income fell.

Unit computing power income: The average daily income of the top ten currencies fell by 20.16%. Affected by the price correction and the increase in the computing power of the entire network, the daily income per unit computing power of the top ten mainstream mining currencies fell this month, with an average drop of 20.16%. Only the daily income per unit computing power of BSV rose slightly by 0.68%. This month, the daily income per unit computing power of 9 currencies fell. Due to the reduction in production and the decline in currency prices, the daily income per unit computing power of LTC fell the most this month, down 45.49%; during the same period, ZEC fell 25.31%, XMR fell 25.28%, DCR fell 21.98%, and BTC fell 17.51%.

ASIC mining machine: The price of mining machines has risen slightly. In August 2019, the prices of mining machines from the three major mining machine manufacturers were basically stable. As the supply shortage problem still exists, the price of second-hand mining machines continued to rise. In early September, the spot price of Canaan Creative's mining machines increased by an average of 1.07%, and the spot price of Bitmain's mining machines decreased by an average of 0.24%. The price on the official website of Ebang International showed no price increase, but the mining machines were all sold out. Due to the drastic changes in the supply and demand relationship of mining machines and the great impact of market fluctuations, the price statistics are for reference only.

Graphics card prices: Graphics card prices are stable, with an average price change of -1.03%. The average price of eight sample graphics cards this month dropped by 1.03%. For graphics cards priced at 1,000 yuan, Nvidia's GTX1060 price dropped by about 5.89%, while AMD's RX580 price rose by about 4.55%; for mid-to-high-end graphics cards, Nvidia's GTX1070Ti price dropped by about 6.9%, while the prices of other graphics cards remained the same.

Mining revenue analysis: The payback period of mining machines is extended by an average of 30%. This month, the payback period of Bitcoin mining machines for BTC and BCH is similar. The seven mining machines with the shortest payback period are: Antminer S9K (191 days, BCH), Antminer Z11 (198 days, ZEC), Avalon 1066 (239 days, BCH), Avalon A921 (240 days, BCH), Avalon A920 (241 days, BCH), Ebit E11 (248 days, BCH), Avalon A850 (249 days, BCH); the six mining machines with the longest payback period are: Antminer L3++ (shutdown days, LTC), Antminer D5119G (9594 days, DASH), 1060 (6G) 6 card (1652 days, ETC), RX5806 card (1072 days, ETC), Antminer DR535T (635 days, DCR), Ant S17Pro53T (415 days, BCH).

The five sample BTC mining machines with the shortest payback period are: Ant S9K (191 days), Avalon 1066 (239 days), Avalon A921 (240 days), Avalon A920 (241 days), and Ebit E11 (248 days); the four sample BTC mining machines with the longest payback period are: Ant S17Pro53T (415 days), Ant S17Pro56T (415 days), Ant S17Pro50T (409 days), and Ant S1753T (404 days).

On the whole, among the sample mining machines, BTC mining machines have a faster payback period, with a payback period of basically 200-400 days this month, and the payback period of most mining machines has been extended by about 30% compared with last month. On the other hand, the payback period of graphics card mining machines in the sample this month exceeds 1,000 days. Currently, the payback period of purchasing a new graphics card for mining is long and the risk is relatively high.