So, where is the problem? If mining is a naked lie, then why do so many people really benefit from it and even continue to invest?
From the initial barbaric growth, mining has gradually formed a billion-dollar market with rich formats and clear division of labor. However, in the process of implementation, there are actually various "traps", resulting in less than expected income. If there is no reasonable risk avoidance measures, it is really easy to lead to losses.
The author still takes bitcoin mining as an example to share a common marketing trap-"the mining machine returns to the original cycle", hoping that readers can benefit from the next ten minutes of reading.
"Toxic" Marketing Slogan
In the process of propaganda and trading of mining machines, there is a key and trivial parameter called "return period". If it is a more responsible merchant or channel provider, it will mean that this is a "static return cycle".
This data is calculated with reference to the theoretical calculation of power and power consumption, mining difficulty, block reward, real-time currency price and a specific electricity price at the time of data release. According to the above data, first calculate the net income of mining that day. Then divide the cost price of the mining machine by this net income, and you can get the static return period.
This value is generally not large. The static cost recovery period of most mining machines is less than 300 days, and some performances are far superior to similar mining machines (for example, the performance of mining machines is improved by 2-4 times, or the FPGA mining machine or ASIC mining machine of a certain currency appears for the first time), and the static cost recovery period can even reach 150 days.
For ordinary investors, such a quick return time is simply profiteering, just like a colorful poisonous apple to attract investors to swallow it in one gulp!
However, the actual situation will always be very different from expectations. With the massive shipment of mining machines, the income of each mining machine will be rapidly diluted, because the output per unit time of most encrypted assets is fixed.
Imagine that a few months after you bought a mining machine, the computing power soared by 30% due to a large number of shipments from manufacturers. Due to "various reasons", the electricity price rose by 10%, and the market turmoil caused the currency price to plummet, and it rained all night. At this time, the block reward is halved, and you suddenly find that the static return period of the mining machine at this time is infinite, because the mining income is no longer offset by the electricity bill. You can only look at the sky silently and say, "Uncle, I am digging a wool." .
Factors affecting mining income
The static capital withdrawal cycle is a painting cake, which can't be used to satisfy hunger, but we have to consider the return on investment when making investment decisions. So how to evaluate the fund withdrawal cycle of mining machine to make it as close as possible to the actual situation?
To solve this problem, we must first understand what factors affect the mining income and why the static return period is not worth referring to.
Take bitcoin as an example. At present, most mineral pools adopt the income model based on PPS (such as PPS+, FPPS, etc.). ). According to the "mining income calculation method", we can get:
The bracket part is the theoretical income of the unit calculation day, which can also be obtained directly from the third-party website when calculating.
We found that there are several factors that actually affect the mining income of Bitcoin:
Calculation power of mining machine: under normal market conditions, mining machine will not choose to reduce the frequency of mining machine too early, which can be regarded as a fixed parameter;
Difficulty in mining: From the perspective of the development of Bitcoin, the difficulty in mining Bitcoin is increasing. At present, the difficulty of mining bitcoin is twice that of 20 19 and three times that of 20 18, which changes dramatically.
Figure 1 bitcoin mining difficulty change curve
Block reward: Bitcoin's current block reward is 6.25BTC, which will remain for nearly 4 years (the second half is in May 2024) and can be regarded as a fixed parameter;
Transaction fee reward: in a long period of time, the average transaction fee is stable in a fixed interval. If there is no drastic fluctuation in the market (such as the big bull market at the end of 20 17, which led to a large number of BTC transactions, network congestion and a significant increase in transaction cost incentives), it can be regarded as a fixed parameter;
Figure 2 Changes in the proportion of bitcoin transaction fee rewards in mining income
Currency price: If the currency price when the mining income is converted into cash is different, the mining income will be very different. However, in practice, the mining income can be locked in the expected currency price in advance through financial means such as hedging. In order to reduce variables as much as possible, currency price can be regarded as a fixed parameter when calculating mining income.
In addition, the impact of electricity price on mining is relatively direct, and electricity price affects mining cost. The higher the electricity price, the lower the mining income. Under normal circumstances, reliable mines will not modify the electricity price frequently, and the electricity price can be regarded as a fixed parameter.
To sum up, the sharp fluctuation of mining difficulty is the main reason for the huge difference between the static mining payback period and the actual mining payback period. Therefore, in order to predict the mining recovery cycle more accurately, it is necessary to consider the change of mining difficulty.
Estimation method of payback period of mining machinery
After thinking clearly, we can try to estimate the investment return period of a mining industry. Take the latest generation of bitcoin mining machine S 19 as an example:
If you buy S 19 at the official selling price, you will start mining in Niandian Mine (electricity price: 0.35 yuan/kWh). In the current difficult period, the daily mining income is:
At the time of writing, the calculation power of the mining machine = 95 times/second, the theoretical income per unit calculation day = 0.0000929 BTC/ time/second (data from F2Pool Fish Pond), and the current price = 68,549.55 yuan (data from CMC). Daily mining income =60.5 yuan.
Daily mining expenditure (i.e. electricity fee) is:
The power consumption of S 19 mining machine is 3250 W, and the mining machine runs all day for 24 hours. Therefore, the daily electricity consumption of the mining machine is 3250× 24 =78000 W h = 78 degrees. Electricity price =0.35 yuan/kWh. Daily mining expenditure =27.3 yuan.
It can be seen that the mining net income of S 19 at this time = daily mining income-daily mining expenditure =33.2 yuan, and the static payback period of mining machine calculated according to the current mining difficulty and currency price =S 19 mining machine price /S 19 mining net income = 429 days.
However, as mentioned above, the actual mining situation is greatly influenced by the change of mining difficulty, which is quite different from the static recovery period of mining machine. In order to estimate the recovery period of mining more accurately, it is necessary to consider the fluctuation of mining difficulty.
Looking back at the changes in the difficulty of bitcoin mining in the past two years, the difficulty of bitcoin mining has been adjusted for 54 times in the past two years, and the average difficulty of each mining has increased by 2.38% (the mining income is inversely proportional to the mining difficulty, that is, the mining income has decreased by 2.32%). Assuming that the mining difficulty will continue to increase at this rate in the next two years, and it will be adjusted every 14 days on average, it can be estimated that by the nth mining difficulty adjustment:
Among them, 0.0232 is the decrease of mining income after each adjustment of mining difficulty, and n is the total mining expenditure after adjustment of mining difficulty. Daily electricity consumption of mining machine × electricity price = daily mining expenditure =27.3 yuan.
Substituting the data of mining machine computing power, theoretical income of current unit computing power day, currency price, daily electricity consumption, mining machine electricity price, etc., we can get the curve of mining machine net income changing with time:
It can be found that at the 35th difficulty adjustment (about 20211October), the mining income of the mining machine began to offset the electricity expenditure. At this time, the net income of mining reached the maximum of 7076.9 yuan, less than half of the cost of mining machine, and the investment has not been recovered.
Fortunately, the actual situation is not necessarily like this: if the depreciation price of S 19 mining machine can reach half of the sales price at this time, the mining machine can be sold at this time to recover the cost. (S 19, as the latest generation of machine king, still has this value preservation. )
The above results are qualified as follows:
The electricity price is 0.35 yuan/kWh.
The iteration of mining machine renewal has maintained the speed of nearly two years.
The currency price is stable between 63,000 yuan and 70,000 yuan, or the currency price is locked in this range by hedging in advance.
But the actual situation is changeable, and the above conditions are not necessarily effective in this investment mining process. For example, some miners can get mining machines at lower prices, some people have more advantageous power resources, and more skilled people can improve the mining performance of mining machines and so on. Therefore, in the process of calculating the return on investment, we should comprehensively consider our own situation. The following are several other possible situations for your reference:
If there are more advantageous power resources, the data will be different. For example, if the electricity price reaches 0.2 1 yuan/kwh, the mining machine will reach the maximum net profit 13900 yuan in the 55th difficulty adjustment (about August 2022).
In view of the fact that the chip manufacturing technology adopted by the latest generation of mining machines has reached a very high level, it is optimistic that the iterative speed of mining machines will be greatly reduced in the next 2-3 years. Around the replacement of all old mining machines by the new generation of mining machines represented by S 19, the change of the whole network computing capacity will continue, and the whole network computing capacity will grow slowly. Therefore, in the next three years, the average difficulty increase of each mining can be set lower. In this way, the result will be very different;
Currency price has a great influence on mining income. When investing in mining, we can hedge the future mining income at a certain currency price in advance and sell it to lock the currency price (I am optimistic about the market in the next two years, investors can keep enough cash flow and wait for a higher currency price to hedge), thus reducing the possible impact of currency price fluctuation on mining income and obtaining stable income.
On the whole, with the increasing audience of encrypted assets, the mining industry has gradually met the requirements, and the mining profit will definitely return from profiteering to meager profit, and the mining investment risk will become greater and greater. In the future, we need to integrate high-quality resources and use necessary financial means to avoid risks and lock in benefits.
All the above estimation results are calculated by the author according to the difficulty of mining and the price of money when writing an article. Readers should combine the actual situation when estimating. This paper only provides a relatively reasonable estimation idea of mining return period, and I believe that a great god will make an estimation model with more variables, which can estimate the investment return of mining industry more accurately.