In today's era of rapid technological development, new infrastructures are constantly emerging, among which blockchain technology has attracted much attention as a revolutionary innovation. The related Bitcoin mining has also become a hot topic in the investment field. However, for investors, not understanding the mechanics and risks behind Bitcoin mining can lead to investment mistakes, a topic that this article will explore in depth.

In today's wave of digital economy, Bitcoin has received widespread attention as a virtual currency, and Bitcoin mining is one of the important ways to obtain Bitcoin. However, many investors blindly follow the trend and lack an in-depth understanding of Bitcoin mining, resulting in increased investment risks. Therefore, understanding the principles and risks of Bitcoin mining is an issue that every investor should pay attention to.

First, Bitcoin mining is the process of using computers to solve complex algorithmic problems to verify transactions and add new blocks to the blockchain. Miners compete to obtain accounting rights by consuming a large amount of computing power, thereby receiving a certain number of Bitcoins as rewards. However, as the Bitcoin network grows, mining difficulty continues to increase and mining costs continue to rise, which poses certain challenges to investors.

Secondly, the risks of Bitcoin mining cannot be ignored. Due to the violent market fluctuations and the uncertainty of Bitcoin prices, mining income is difficult to stabilize. In addition, mining equipment is expensive, and electricity costs cannot be ignored. Investors need to comprehensively consider the balance between cost and return to avoid losses caused by blind investment.

Before investing in Bitcoin mining, investors need to understand market dynamics, master relevant technical knowledge, and formulate a reasonable investment strategy. At the same time, you can also diversify risks and improve the stability of returns by participating in mining pools. Only with a full understanding of Bitcoin mining can investors make wise decisions and avoid falling into investment misunderstandings.

In general, although Bitcoin mining is an investment method with great potential, it also comes with certain risks and challenges. While exploring Bitcoin mining, investors need to remain cautious, treat investments rationally, and avoid blindly following the trend. Only through continuous learning and in-depth understanding can we seize investment opportunities in the blockchain era and achieve the goal of wealth appreciation. New infrastructure revelations, not understanding Bitcoin mining, will become a major hidden danger for investors.

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The recently hotly discussed new infrastructure has made chips, IDC, 5G, investment institutions and other related industries "excited". However, these industries were not born on the first day. Looking back on the development of the past ten years, a large amount of capital, talents, and resources have been invested in them. Among them, what is the actual profit situation? Even with strong support from the state, how many people can actually get financial resources? The market is fair and a company that cannot make profits on its own is not a good company, and it is difficult for companies that rely on policy support to achieve great development.

From an investor's perspective, if I were to classify investors, I think first-class investors discover and create new value, second-class investors form groups to create new trends, third-class investors team up to follow trends and chase hot topics, and fourth-class investors Cast the net blindly to protect the principal.

IDC under the new infrastructure - a vent, not a depression

The proposal of new infrastructure has led many industry practitioners and investment institutions to believe that this is a huge trend in the IDC industry and requires full deployment. In my opinion, this idea is half right and half wrong. This is a good thing for the IDC industry, because with the development of technology, computing and storage requirements are increasing exponentially, which will inevitably bring about the rapid growth of related IDC; but for investors who want to lay out, whether you are a professional investment Institutions and related industry players must have in-depth understanding and careful consideration before making decisions.

It can be known from public information that the current total load of domestic IDC is about 23 million kilowatts. This has been driven by the development of the communications industry, Internet and mobile Internet in the past two decades. With the development of 5G, Internet of Things, and AI, IDC will usher in A new wave of growth, but authoritative predictions indicate that the actual annual load growth rate will be difficult to exceed 20%. Because IDC has a huge initial investment, the threshold is very high, it consumes a lot of power, and it also faces strict restrictions on PUE in various places.

From an investment perspective, IDC has high thresholds, low gross profit, and low returns. It is difficult to bring high returns and faces various scale bottlenecks. However, the 80/20 rule applies everywhere in the market. After all, there are only a few people who can make rational judgments, and even fewer can find value depressions.

Bitcoin Mining—The Real Value Swamp

We admit that Bitcoin has only been around for 11 years, and it is still a relatively niche industry that even most people don’t understand at all. According to incomplete statistics, the number of people who have held Bitcoin so far does not exceed 60 million. However, there are more than 7 billion people in the world. Looking at the market, how many industries will have such a "potential demographic dividend"?

As an important part of the Bitcoin ecosystem, Bitcoin mining undertakes the task of maintaining system security and stability. At present, the total global mining load is about 8 million kilowatts (China accounts for about 70%). It only took ten years to grow to 40% of the traditional IDC volume, and it still maintains a high-speed growth trend that far exceeds the growth rate of traditional IDCs. We have analyzed in previous articles that Bitcoin mining is essentially a part of the computing industry. It has many similarities with the traditional IDC in the computing industry. Both are industries with chip costs and energy costs as the core costs.

In a previous article, we made an analogy. Bitcoin is currently more like a global energy technology and financial index. It is highly correlated with the Dow Jones Index in large cycles. This correlation comes from investors in Bitcoin and Dow Jones constituent stocks. It may be the same group of people or related groups: When we look at the constituent stocks of the Dow Jones Index, they are basically concentrated in the three pillar industries of society: energy, technology, and finance. In terms of energy, Bitcoin mining requires a large amount of electricity (thermal power, hydropower, Natural gas, electricity, etc.). In terms of technology, Bitcoin itself was initiated by crypto geeks and has received a lot of attention from the computer industry and chip industry. In terms of finance, Bitcoin itself, as an alternative liquidation system, has a lot of irreplaceable financial value.

As the infrastructure of the Bitcoin industry, Bitcoin mining is a value depression in terms of compliance and risk resistance. However, many investors have ignored it due to various misunderstandings and prejudices. As for the detailed reasons, I believe that good investors will do in-depth research and make their own judgments.

On the other hand, real trends do not need policy support, the free hand of the market will make the right choices. Without any policy support:

1. The chip of the Bitcoin mining machine is the first to complete the evolution of CPU-GPU-FPGA-AISC and adopt the most advanced 7nm process;

2. Mining machine manufacturer Bitmain has achieved revenue of over 10 billion and net profit of over 5 billion in four years since its establishment, and has become TSMC’s second largest customer in China;

3. The scale of global Bitcoin mines is growing rapidly, and a large amount of idle energy is being reused. Domestic local governments have taken the initiative to establish hydropower consumption demonstration zones and cloud computing industrial parks;

4. The price of Bitcoin has exceeded 20,000 US dollars per coin. Although it has experienced several sharp fluctuations, the user base has grown linearly;

5. In order to provide services for Bitcoin transactions, tens of thousands of exchanges have been established around the world. The United States has the compliance support of Nasdaq and top institutions. Its liquidity and transaction volume are currently second only to the foreign exchange market, and its potential Very huge;