Currently, cryptocurrency is one of the biggest outlets in the financial market, many applications with digital asset options are growing. Investors and the banking app industry are rolling out encryption-enabled features, giving more people the freedom and diversity to invest, while bringing a lot of efficiency to themselves.
Credit card points will be replaced by encrypted rewards, adding accurate and exciting value to customers. As people become more comfortable with the use and participation of digital technology, the trajectory of cryptocurrency has permanently shifted upward.
Three trends in cryptocurrency mining over the next five years.
Trend 1: Institutionalization or 2Bization
After institutions enter the market, the mining industry‘s investment threshold and management requirements become higher, and the overall situation is highly specialized, which will lead to the exit of retail investors; when significant funds are attracted, a lot of retail funds will also be introduced. After they came in, mining machines became more expensive, and mines became scarce. In general, after these funds came in, the investment threshold for mining has become higher. Because there are more miners, the mining income is diluted, so the profit is low. The original management cost was also reduced, so the management requirements have become higher.
So, in general, the mining industry will become more like a traditional industry, unlike the blockchain industry in 2017 and 18. It seems that everyone can get rich in the blockchain industry in 17 and 18 years. Others who invest in other fields are pleased to earn a little and are not happy about five or ten times in the blockchain. As long as the capital flows in and out reasonably in any industry, its income range should be concurrent and close, and there should not be such a large profit margin. A large amount of capital comes in, profits are reduced, and risks are also reduced. To reduce costs, organizations need to focus on large and small and outsource peripheral businesses.
The service requirements of institutions may differ from the standards required by miners in the past—retail investors or self-employed individuals. Now we can see that the threshold of suppliers has become very high. In the past, mining machines were guaranteed for three months, and even many goods were not guaranteed or a one-month warranty. There was such a thing, and now the mining machines have a half-year warranty. Every manufacturer discusses what is about to be officially announced, and it will become a one-year warranty. Some manufacturers may have officially announced it. Therefore, the requirements for the industry have become higher, and the industry must be in compliance with the demand for funds, and the industry as a whole will be highly specialized.
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Trend 2: Compliance
This trend has been going on. At the 17-year bull market, at least 70% of domestic mines were not compliant. It is not easy to say whether those mines that are compliant are fully compliant. It can say that they are compliant in the three aspects of the Development and Reform Commission, Guodian, and tax. The others are not necessarily clear. The reality today is that 70% of mines are compliant.
At present, the soil for compliance has begun to appear, and mining machines are inherently easy to comply with. First of all, we talk about taxation. After buying a mining machine and issuing an invoice, The matter of paying the tax is settled. Auditing is not a problem. We already have two NASDAQ companies. Now domestic 3C certification and European CE certification are available. As an IT product used in the industry, the mining machine is already fully compliant.
Trend 3: Energy players will dominate the supply side
The logic is elementary. The price of the currency increases by five to ten times. According to our calculation, the mining machine can hold five to ten times. But can energy be produced five to ten times at will? Very difficult so that energy will become a very scarce thing next time. Then, we have to find energy suitable for the mining range when the price range is reasonable.
What is the energy suitable for mining? One is the price of the currency just mentioned, and the second is the region. The country’s legal environment and the quality of employment need to have a certain level. In some places, it is a policy environment, and the government’s policies change back and forth, but they are legal. The miners may be pushed out and brought back incessantly, and this environment is not very good either. In some countries, such as Africa and Iran, the prices are excellent, but labor costs are very high.
Because of the scarcity of energy, the dominant position will become stronger and stronger in the next five years, the iteration of mining machines will become slower and slower, the profit will become thinner, and the industry influence brought by chip research and development technology become weaker.
The iteration of the mining machine is divided into five eras. The first is general equipment. The second era of professional mining machines has just begun to appear. At this time, a large number of players have poured in. Unfortunately, this era is evolving too fast. It has just started at 110 nanometers in 2013, nearly ten years behind Intel’s CPU; We used 28 nanometers in two years, the same as the Apple 7 released in the same year in 15 years.
Isn’t this amazing? In 18-20 years, the iterations of 7 nanometers and 8 nanometers are very fast. The destructive effect was that 110 was over after 55 nanometers came out, and all the fronts died after 28 nanometers came out. After 16 nanometers came out, customers who bought Bitmain’s 28m S7 were also miserable.
So next, mining machine manufacturers will only have a benign impact on the industry. The next thing that may be more terrible is the mine, whether cheap electricity and a stable mine.