Large-scale mining is now a hot issue in community discussions. By the freedom choice of the market, it is inevitable for large-scale mine to replace individual miner. The time of large-scale mining is coming.
As a new digital currency, Bitcoin has extensive attention from scholars in various fields since its creation. More and more people are joining the team of mining. In the early days, Bitcoin was still quite new. Anyone could mine on a normal computer bought from a local retail store. Today, Bitcoin mining machines change from CPU, graphics card to professional mining machines. bitcoin miners used to geeks while now anyone with interests can get involved in this industry. The number of companies in Bitcoin industry is increasing, from 55nm to 16nm. The mechanism by which bitcoins get created and distributed makes more people entering the mining world. The more people participate in mining, the less the efficiency of bitcoin mining becomes. Bitcoin mining, which used to be entertainments for some amateurs and geeks, has become a mature company business.
The costs of equipment, time, electricity, and network-wide computing power continue to increase. The difficulty of mining is increasing. The currency is fluctuating. Unexploited bitcoins are decreasing. Labor costs are increasing as well. There are various factors who can have impact on the Bitcoin industry. It is becoming almost impossible for individual miners to get profits by mining. Large-scale mines are developing when individual miners are losing their competitiveness. The mining industry is entering an era when only large-scale mine owners can survive in this industry and be competitive.
The reason is as follows:
First of all, the scale advantages of large mine can significantly reduce the purchase cost of the mining machines. Given their own huge demand for mining machines, large-scale mines are more capable of negotiating with mining machine providers. They can get mining machine at prices much lower than individual miners.
Secondly, the scale advantages of the large mine can significantly reduce management costs. If there are a number of mining machines, the cost of managing 10 mining machines is not much different from managing 1,000 mining machines. However, if we separate these 1000 mining machines and give each person 10 mining machines to manage, we will have to pay 100 workers. By grouping mining machines, we can save the labor cost for 99 workers thanks to the centralized deployment of large-scale mines. Compared with individual miners, large-scale mines can significantly reduce labor costs for mining.
In addition, the cost of electricity accounts for a large proportion of the cost of mining. The scale advantages of the mine can significantly reduce the cost of electricity for mining. Since the mine is a large consumer of electricity, it has stronger bargaining power to exert electricity companies and get them to provide a lower price. In this way, the cost of mining at large-scale mines can be at very low electricity prices. Electricity cost is the main problem for individual miners or small mines but not for large-scale miners. With the increasing cost of electricity price and the impact of policy supervision, the longer payback period and the falling digital currency value, a safe policy environment and ultra-low electricity costs have become key factors for surviving in the mining industry.
Today, individual miners are changing their way of mining and start to work with large-scale mines, facing the increasing cost pressures on mining machines, electricity bills, labor, and maintenance.
According to a manager of Interconnected Online mine, their company will have huge investments in three phases in Kuwait, Bahrain, and the Middle East to build the world’s largest data center. Now they have built 60MW substations, 5 iron scaffolding lines, 20,000 square meters of machine rooms. They have even paid the expansion fees to the government. In this phase, they can simultaneously start up 40,000 1620W machines.
In addition, their mine gets strong policy support of local governments. They get the lowest electricity rate in the world thanks to these policies. To solve the industry pain points, Nebula Mine will provide industrial services including miner hosting, financial leasing, asset package trading, futures pre-sales, staged finance, etc.