Zhu Fang: The competition in the mining machine service industry is very basic, and the technology and services need to be more professional and refined

A few days ago, at the 2020 Industrial Ecology Forum and 58COIN’s third anniversary event, Zhu Fang, the co-founder of Inbit, expressed some views on the subdivision of mining industry-the mining machinery service industry.

The following is the text of the interview:

Question: It is understood that encrypted mining services mainly include mining machine maintenance, maintenance training, power supply R&D and sales, mining machine hosting and other related services.

After leaving the mining pool, are you mainly doing mining equipment related services? Why choose the direction of mining equipment after-sales service?

Zhu Fang: At present, services such as repair, secondary sales, custody, and extended warranty of mining machines are actually relatively lacking in the industry. The mining circle is still very junior, and there is not even a maintenance company that can gather the maintenance service qualifications of mining machines.

Question: In other words, there is no competition in the current mining machine service field? Another question is, what is the demand for mining equipment-related services in the mining market?

Zhu Fang: Competition in this field is also fierce. It’s just that everyone is a very rudimentary competition, the means of competition are very traditional, and competition does not produce any value. The competition in this area is like the competition between breakfast vendors. Everyone is vying for a good location and shouting, no one is going to improve the service.

We want to be the king of Yonghe in the breakfast shop.

The market has great demand for services in mines and mining machines. Mainly because a lot of formal and professional funds have come in and they need professional people to provide services. Now all kinds of professional and intelligent tools have been perfected, allowing us to provide more professional and transparent services. This is also an opportunity for the current market.

Question: From your point of view, you should agree that “Bitcoin mining is moving towards specialization and scale.” In recent years, we can clearly feel that the mining industry is moving in multiple directions. In your opinion, what are the development trends of Bitcoin mining?

Zhu Hai: Yes. The industry is becoming more specialized and large-scale, and more subdivisions have emerged. Including our services are gradually becoming professional, providing more sophisticated technology.

In addition to these aspects, there are several trends.

One trend is that the risks of mining are decreasing. All ecological risks in the entire mining industry are decreasing and guarantees are increasing. Before 19 years, none of the mines said they were compliant. However, this year’s mine pools can withstand scrutiny in all aspects of laws and policies, and force majeure will hardly come from the government.

There is also a trend that more money enters the market and profits become thinner. In the past, the risk was high, but the return on investment was often high, but if you encounter force majeure, there is no way to lose money. Now the risk is low, but the investment income is low, the loss is also small, and it can be done through various financial means.

Question: “The bull market in mining”-the high water period has long since ended, and now the low water period has arrived, and this year happens to be the year when Bitcoin rewards are halved. What impact did the dry season after the halving have on the mining industry?

Zhu Fang: Every time I look at it, the impact of the dry season is the same, and in many cases there are some differences, which are caused by market conditions, mining machine iterations, and changes in the mining pattern.

Specific to this dry season, one of the impacts is that the price of mining machines will fluctuate greatly. Because of the high electricity price, the price of some low-efficiency mining machines will plummet; after the market gets up, miners find that these mining machines can be turned on again, so the price of mining machines soars.

Taking into account the factor of halving, its impact is to make a batch of older mining machines withdraw from the market early. At a certain stage before the currency price rose, some machines with more than 60 watts experienced panic that shouldn’t have been there.

Question: In an interview with the market leader of Weibit mining pool before, he mentioned a trend that many mining pools and mining machine manufacturers gradually transfer their services overseas. How do you see the trend of “mining abroad” in recent years?

Zhu Fang: Because the demand for domestic Bitcoin mining machines is different from the demand abroad.

In foreign countries, technical geeks used to have demand for mining machines, but now many institutions are in demand for mining machines. Looking at the country again, the country used to be mainly energy players and a small number of technology geeks (technology enthusiasts), but now most of them are still energy players. So there is a big difference between domestic and foreign countries.

Now Bitcoin mining is no longer as hot domestically as before, but its popularity abroad is beginning to increase. The imbalance of domestic and foreign demand has caused some changes in the market. In the second half of this year, many products were indeed transferred overseas.

Q: In the recent period, the price of Bitcoin has continued to rise. At its peak, the price exceeded $16,000, which exceeded many people’s expectations.

What is your opinion on the price trend of Bitcoin in the next year?

Zhu Hai: Judging from the monthly line, Bitcoin this year is almost a unilateral upward trend. The upward trend should continue in 2021, and it is possible for the price of Bitcoin to rise to between US$30,000 and US$100,000 in 2021. However, epidemic factors and world economic and political reasons may have a greater impact on Bitcoin prices. Ideally, I think the price of Bitcoin can reach the price range of 50,000 to 120,000.