Bitcoin has gone up and down, causing a panic among miners themselves

At 23:00 on January 11, the bitcoin price was reported to be $ 31,938, about eight times higher than the $ 3,800 level in March 2020. Just a day earlier, bitcoin hit $ 41,000. People in the virtual currency world do not hesitate to call this a “giant bubble”, and they themselves are not afraid to call themselves “gamblers”. It can be said that the violent upheavals make it difficult for them to sleep well, and this is also a way to challenge each person. And here’s a statement from one of the people in the craziest whirlwinds.

“I ordered 50 mining machines in the first half of 2019, at a mine in Sichuan and officially started mining in July. At the time, bitcoin was recovering from the 2018 crash and the price per virtual currency is about 10,000 USD. But who knows that the crash in March 2020 has directly reduced my wealth by 2/3, making me feel really desperate. Xiaogu, a bitcoin miner shares. “Not only is the virtual currency falling in price, but it also costs $ 7,000-9,000 each month to pay the electricity bill. If there is a power outage in the mine, the situation is even worse. At the worst times, the bank card is only about 3,000 USD “.

Under mental pressure, Xiaogu chose to “cut meat”. He decided to sell the bitcoins obtained from mining at as low as $ 3,800 in March 2020, then even changed jobs to make a living. But in May 2020, the temptation of virtual money made him join the market again (bitcoin price was about 6,000 USD), to this day.

“After deducting the monthly fixed electricity bill, these 50 mining machines bring you more than $ 15,000 a month”, he recalls.

Currently, the psychology of cryptocurrency players with bitcoin is still very high, but when this “giant bubble” will burst has become a common question that haunts people’s minds. For Xiaogu, who has gone through several waves of “going up and down dogs”, he is determined to choose regular and timely withdrawals, a safe strategy.

Just 50 mining machines are enough to sit and count money

A riverside cryptocurrency mining pool in Sichuan, China.

In addition to bitcoin investors or speculators, there is a large group of people who make a living on the mining of virtual money, claiming to be “miners”. The production of bitcoin requires the use of computing power and is extremely power consuming, but this is an enriching opportunity for those who own or have cheap electricity.

Driven by the market, miners’ income from virtual currency mining has increased accordingly, spurring demand for miners to skyrocket. Major miners are buying more and more high-powered cryptocurrency miners, hoping to take advantage of the current high prices of cryptocurrencies and the increasing difficulty of mining. Fundamentally, mining income appears to be more stable than from over and over again.

In 2019, Xiaogu joined the ranks of miners.

Looking back on 2018, bitcoin fell from $ 17,157 per coin to a minimum of $ 3,733, a drop of nearly 80% and considered the biggest crash in history at the time. At this point, the cost of mining exceeded the transaction price of bitcoin at the time, leading some experts to have determined that bitcoin was in a “death spiral” and that blockchain technology was essentially experiencing bottlenecks. during development. The entire year of 2019 can then be said to be a year when the virtual currency slowly “recovers” after the decline. When Xiaogu entered the market, bitcoin rebounded to approximately $ 10,000.

“At the beginning of 2019, I went to see the mining in Sichuan in person. At that time, a big brother in the money world told me: ‘Buy virtual money and miners now, very profitable. “. So I ordered 50 miners. At that time, Bitmain’s famous mining machine, the Antminer S19, cost about $ 1,500 each. But in general the miner should be placed in the mine because you cannot dig at home, not only too expensive but also very noisy. he shares.

At that time, Sichuan province had become the largest concentration of bitcoin mining in the world and the cost of electricity was the factor of primary concern. Regardless of the savings in line installation costs and the convenience of using electricity, most bitcoin mines are built directly inside hydropower stations. Sichuan is rich in hydroelectric resources and has a surplus during the rainy season. The mines are mainly built on the Dai Do River in Sichuan. For every 100 bitcoins mined in the world, 5 of them are produced around this river basin.

When Xiaogu first entered the cryptocurrency mining industry, his 50 miners per month would likely consume between $ 6,000 and $ 8,000 in electricity bills, but also provide a correspondingly steady income. At that time, he said, miners were not too afraid of the price of virtual currencies rising or fluctuating, because just continuing to mine would make profits. What they feared the most was power outages.

Every year in May, Sichuan enters the rainy season. For miners, this is a rare opportunity. But during the transition from dry to rainy season, the mines will lose power for about 10 days, an inevitable “painful” period.

Crazy market in 2020

Bitcoin has gone up and down causing a panic among miners themselves | Internet

In March 2020, as the COVID-19 epidemic swept the world and caused a major shock in the financial markets, in a state of “scarcity of dollars”, investors sold off their assets. they were exchanged for liquidity in USD, leaving both gold and bitcoin to be thrown away. On the evening of March 12, 2020, bitcoin plummeted nearly 50%, from nearly $ 10,000 to a minimum of $ 3,800. At the time, there was even an opinion that Bitcoin could return to zero.

“At that time, sentiment collapsed, assets were shrinking by nearly two-thirds. The miners had to sign a betting agreement with the mining pool, which means that no matter how much the currency costs, they must mine. , when the price of bitcoin dropped to 3,800 USD, I lost 3,000 to 4,500 USD per month, “ Xiaogu said.

Overwhelmed he finally chose to sell bitcoin at its lowest price in March. To this day, Xiaogu’s cell phone still contains screenshots depicting the crypto market crash at the time. that point. Fortunately, he was back when bitcoin rebounded to around $ 6,000 over the next two months. And since then, bitcoin’s price continued to climb like crazy.

As bitcoin crosses above $ 10,000 in early October 2020, observers may notice signs of large institutions starting to enter the cryptocurrency market. For example, on October 8, mobile payments giant Square unexpectedly announced a $ 50 million investment in Bitcoin; on October 13, property management firm Stone Ridge revealed it had purchased more than 10,000 bitcoins, worth about $ 114 million; On October 22, the world’s largest cross-border payment platform PayPal announced it would allow users to buy, sell and hold cryptocurrencies on the platform; On October 27, Singapore’s DBS bank announced it would offer encrypted cryptocurrency transactions.

However, Xiaogu, who experienced the “crash” in 2019, is now much more cautious. He claims to have sold his bitcoins twice, at $ 14,000 and $ 27,000 respectively. At the same time, there are now two methods of monthly profit settlement for mines. One is the direct cash settlement after deducting the periodic electricity bill, the second is taking virtual money and paying electricity bills. Xiaogu naturally chose the first option.

Now, even the top currency pundits always say that bitcoin is a giant bubble, but no one can tell when the bubble will burst.

“Now, friends in my circle say they are planning to rent a yacht to celebrate the new year”, Xiaogu said. “For now, they say they will continue to mine, but there will be no more speculation in Bitcoin. Cash withdrawn in time, now going back to stocks may be a more practical option.”

Refer Sina

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