Q&A: What are the benefits of standardizing crypto mining?
2021-03-16 08:00:00Read More
Cointelegraph/News by by Connor Sephton/Published on 19.03.2021
What are the benefits of standardizing hash rates, and how will the mining industry evolve over the next 12 months? We speak to BitFuFu’s independent director, Celine Lu.
Different mining machine models and their parameters — such as computing power and energy consumption ratios — can be difficult for users to understand. Fluctuations in hash rates can also have an adverse impact on a user’s income.
BitFuFu says it is the world’s first platform that offers standardized mining hash rates. We talk to the company’s independent director, Celine Lu, about how it works, how users benefit, and the key trends that are set to dominate the mining sector in 2021.
1. Hello! What does crypto mining standardization involve?
The energy efficiency ratios of different brands and models of mining machines currently vary. This is a critical factor that influences the miners’ electricity supply, and overall productivity.
That’s why BitFuFu brought up the idea of standardizing mining hash rates — making it much simpler for consumers who are making a purchase. Now, they just need to focus on the energy efficiency ratio instead of a multitude of factors. We’ve adopted a smart algorithm that divides regular computing power into homogenous units that are easy to understand.
Our models have been split into three streamlined categories: The classic 30Series, the balanced 40Series, and the more aggressive 50Series.
Taking the 30Series as an example, this collection includes the S19Pro Antminer, the S19 Antminer and other mining machine models that offer about 30J/T.
2. What are the benefits of this for users?
A standardized hash rate is much more convenient and intuitive for users, and ensures making estimates is far easier. From here, they’ll be better equipped when choosing plans on the basis of mining performance.
For the mining industry, this leads to more efficient trading and hash rate liquidity, which in turn promotes healthy industry growth. As the hash rate is standardized, it can also be distributed and exchanged between DeFi products, Bitcoin options and other derivatives, and the market's growth would be a hundredfold.
3. What is the significance of Bitmain selecting BitFuFu?
Bitmain's cooperation brings valuable resources to the platform and optimized economies of scale. As the largest mining company, Bitmain has a wide range of mining resources.
When it comes to mining pools and mining machines, Bitman and BitFuFu will be joining forces — starting sales of next-generation equipment in order to expand the global market. The partnership will also make an important contribution to innovation.
As the mining platform officially endorsed by Bitmain, BitFuFu has advantages in terms of computing power resources — including lower hash rate costs and stable operations.
Of course, the long-term objective of BitFuFu is to reduce barriers to entry so more users (including retail and institutional investors) can obtain high-quality mining services.
To meet this goal, BitFuFu has three key areas of focus: Acquiring users, high-quality supply chain integration based on Bitmain’s resources, and developing new business models and potential for expansion.
4. What is BitFuFu’s ultimate goal for the future?
In the mining sector, there are still huge opportunities — and the proliferation of expansive mining farms has risked shutting out everyday people.
BitFuFu’s goal is to enhance the liquidity of hash rates and transform computing power into real revenue.
Attracting more prospective users could deliver substantial benefits to the whole mining industry.
5. Why is authenticating mining so important?
Authenticity is of utmost importance in not only the mining space, but also for the blockchain and cryptocurrency world in general. In particular, the cloud mining market has been volatile, and we witnessed a slew of major scams in the recent past. For us, BitFuFu and Bitmain's strategic partnership provides legitimacy with its expertise in the industry. Our hash rate schedule management framework allows users to monitor their hash rate on a third-party mining pool platform, while revenues are directly delivered to users through a mining pool.
6. There’s been a lot of concern about Bitcoin’s power consumption. What is BitFuFu’s response to this?
China faces dilemmas in finding a way to manage electricity supply. Specifically speaking, there is a huge surplus of electricity and the government has to find ways to minimize waste. With supply exceeding demand, local communities are unable to fully absorb the resources. In addition to that, the channels that can be used to distribute these resources are limited.
Data suggests the total amount of unused hydropower, wind power and photovoltaic power in 2018 stood at 69.1 billion kWh, 27.7 billion kWh, and 5.49 billion kWh respectively. In total, it resulted in approximately 102.3 billion kWh of wasted energy. In the southwestern and northwestern regions of China, where the waste of electricity is relatively high, timely action must be taken. Local government policies are recommended to ensure spare electricity can be converted into power for mining machines.
This problem is a pressing issue for the government, and it is also an opportunity for miners. With proper measures in place, it will stop natural resources from being wasted, all while providing local authorities and residents with tax revenues and wealth respectively.
7. You were previously involved in BitDeer. What makes BitFuFu different?
I switched to working on the wealth management platform of JD — one of China’s biggest online retailers — after I left BitDeer. Throughout that time, I've benefited immensely.
In the role, I was exposed to the basic assets of various standardized wealth management products through asset securitization, risk control tools, and at the same time we have a thorough knowledge of users and the entire process of financial services.
Mining products must innovate at a rapid pace. Some people who left the original core team of BitDeer approached me and said they'd like to create another platform. I was really happy for that opportunity, so I brought traditional funds into the business to collaborate with us. As an independent director I have worked to support the team since then, and I think we do an excellent job on the BitFuFu platform.
8. Why would users choose BitFuFu?
Users come to us because of profitability and authenticity.
The return rate mainly depends on the cost of computer power, the overall mining difficulty of the entire network, and the currency’s price. The price of currencies and mining difficulty are both uncontrollable variables that are present across all platforms. For a new generation of mining machines, BitFuFu will cooperate with Bitmain in future on the cost of computational power that can better guarantee returns.
Given the uncontrollable factors of the mining difficulty and price, in the future we will be cooperating with Bitmain for a new generation of mining machines that can deliver greater profitability. BitFuFu and Bitmain's strategic partnership, along with real-time monitoring on the BitFuFu website, provide users with protection and enables users to see the status of the computer power activity on the third-party mining pool platform.
In short, I think that's why users prefer BitFuFu. We offer a true mining platform.
9. How do you expect Bitcoin mining to evolve in the next 12 months?
The creation of standardized crypto mining products is bringing creativity to conventional mining and its existing product models.
On one hand, it will expand the traditional mining industry to a vast, exponential consumer market. On the other hand, standardized mining consumers have a strong appetite for new product models, and we can develop ideas accordingly from them as we continue to see market growth.
Standardized hash rate mining and traditional mining will continue to coexist, while conventional mining entry barriers only increase over time. This means that the industry continues to flourish only for professional and big mining service providers. Standardized hash rate mining is expected to develop quickly. There have been a number of ground-breaking products and new consumers with different needs who have now been motivated to take part in the mining industry. Overall, it is a positive sign for us moving forward.
10. Does BitFuFu have any features in the pipeline to tell us about?
We now enable users to trade their hash rate resources freely — boosting liquidity in the secondary markets.
We also enable other businesses to open a shop on our web platform to sell their own hash rate plans with their brand. More mining machines will be supplied in the future to mine other cryptocurrencies besides BTC soon.
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