1. Summary of investment points   With the expansion of the digital asset ecology and the rise in the price of digital currency, mining, as the upstream link of the digital asset industry chain, is entering an unprecedented white-hot stage. The emergence of legal and compliant mining farms around the world has also brought operating expenses such as cheap electricity costs to the industry, and the profitability of the mining industry has been significantly improved.   As the payback period of mining machines is greatly shortened, the profit-making effect is getting better and better, which will lead to potential capital entering the mining industry, and the amount of funds in the industry will be more abundant. According to Oxford data, with the increase of mining computing power in recent years, the total market value of cryptocurrencies has also continued to grow, and they have maintained an annual growth of 100%.

The decentralized and individualized mining in the past no longer exists, and the concentration of computing power has become the trend of the mining industry, and has entered the era of large mining farms. The cloud mining market for C-end users has gradually become a hot spot. On the one hand, the C-end is large, and cryptocurrency investment users are developing rapidly. On the other hand, high-quality mining projects are springing up. Cloud mining platforms are becoming a linker and converter for C-end users and blockchain investments.   At present, some cloud mining platforms such as Bit Deer, Bit Fufu, and OHhash have appeared in the market, which have the characteristics of integrating upstream and downstream resources and obvious profitability. It is worth noting that Ohhash integrates blockchain governance, DAO, NFT, etc. To the mining track, the future is worth looking forward to.   To sum up, as the mining difficulty increases, the mining threshold will only get higher and higher. It is foreseeable that cloud mining is likely to become the best choice for small miners to mine in the future. Therefore, the cloud mining track is an excellent track worthy of attention in recent years.   2. Definition and classification of cloud mining   The usual steps of blockchain mining are: “purchase mining machine - deploy mining machine - set up mining - obtain income”, but this step of deploying mining machine is affected by many factors, such as currency, mining machine, electricity price, site, temperature , noise, operation and maintenance, etc. These thresholds require certain conditions and knowledge to eliminate, so a sub-module under the mining industry, cloud computing power, came into being.   Cloud computing power is a remote mining mode. Users purchase cloud computing power contracts through the platform, lease computing power for mining, and obtain income regularly. The advantage of cloud computing mining is that users do not need to have an in-depth understanding of mining principles and various software and hardware, or purchase expensive mining machines, and do not need to maintain 24 hours by themselves. As long as they place an order to buy, they can participate in mining and obtain mining income. , similar to the purchase of income rights products. For ordinary investors, purchasing cloud computing power contract products (leasing computing power) is a low-cost and low-threshold mining method. Investors can regularly receive mined coins, which is more stable than buying coins. At the same time, mine owners rent out their computing power to obtain cash flow in advance and diversify risks to achieve a win-win situation.   The users brought in by cloud mining are not only helpful for the sales of mining machines, but also for the upstream and downstream mining farms in the industry, and the mining pools will help to drive the value-added of the upstream and downstream industries. If a cloud miner wants to become a participant of a mining pool, then the user needs to purchase a certain amount of “hash power.” Each participant receives a proportional profit share according to the amount of rented hash power.   2.1 Classification   Currently, there are 3 known cloud mining methods, namely:   Virtual Private Server (VPS) This method of mining requires renting a server and installing mining software. In other words, rent a computer that can be accessed remotely from the internet.   Rent computing power It involves buying or obtaining a contract with a company to rent some of its computing power. Typically, users can choose to rent or lease how much computing power. Their income will be proportional to the computing power they receive.   Its biggest advantage is that you don’t need mining hardware to start mining. Hence it is the most common and used cloud mining method. But be aware that due to its popularity, there are many companies that sell this computing power fraudulently.   Managed Mining In this model, the company pays the miners. That is, they are responsible for the consumption and maintenance of the client’s mining hardware.   This is not a very common method because many miners cannot afford these fees, but they have the equipment, so they host it to a professional company, so they can get a good yield.   Now companies that provide bitcoin mining services have begun to “move” this cloud mining function to smartphones. Users only need to log in to the mobile APP to purchase, place an order, and pay directly through the cloud mining package. Each valid package can be managed on the mobile phone, such as viewing the daily income curve, switching mining pools, changing the income address, and continuing. Pay electricity bills, etc. In addition, these mobile APPs also have the characteristics of traceable computing power, direct payment from mining pools, transparent user income, and flexible choice of service packages. Through authentic, transparent, safe and convenient services, everyone can truly mine.   3. Status of cloud mining market (industrial status)   3.1 Development History   Cloud mining platforms have been around for almost as long as mining pools. Cloud mining has begun to rise, and the number of cloud mining products in the market is increasing. In 2013, CEX opened the world’s first Bitcoin cloud mining platform, and the user scale grew rapidly. Bitfury, a Russian mining machine manufacturer, acquired CEX in 2013. Benefiting from Bitfury’s mining farm resources, CEX’s cloud mining business developed further. accelerate. Subsequently, Swedish mining machine manufacturer KNC launched the cloud mining product KNC Cloud, relying on the 7PH/s computing power of its northern Swedish mine, and gradually took the lead in the field of cloud mining business. Unlike CEX, KNC and other cloud mining companies that have mining resources as their development support, China’s domestic Huobi.com develops cloud mining business by cooperating with other mining farms, and its cloud mining platform Digcoin builds large-scale mining operations. Machine clusters, overall management of power supply, in-depth promotion of cloud mining business.   Up to now, the mining industry has a complete ecological chain, and cloud mining companies are gradually entering the C-end market, which heralds the advent of the era of large mining farms and the end of the era of personal mining.   3.2 Market size   According to Brandessence Market Research, the cryptocurrency mining market will reach \(2,285.4 million by 2021. The cryptocurrency mining market is growing at a strong CAGR of 28.5% and will reach \)5,293.9 million by the end of 2028. The huge demand for cryptocurrencies is one of the major factors driving the growth of the global cryptocurrency mining market.   At the same time, the global “cloud mining service market” is growing rapidly. Through the data analysis of Genesis Mining, BitFufu, BitFawn, Nicehash, Hashnest, OHhash and other companies, the situation is as follows:   Compared with 2021, by 2028, the global cloud mining service market size is expected to reach tens of billions of dollars, and the compound annual growth rate during 2022-2028 is unexpected.     3.3 Industry positioning   In fact, cloud mining is the linker and converter of the B-side and C-side of the blockchain. Compared with investors buying their own mining machines for mining, cloud computing mining and mining machine rental mining are more convenient and worry-free, which are mainly reflected in the choice of currency, purchase of mining machines, investment amount, transportation, custody, maintenance, etc. There is a professional team to deal with it, and users do not need to endure loud noises, and do not need to worry about hidden dangers.   At the same time, with the popularity of cryptocurrencies in the world, more and more users are pouring into this industry, and mining may become the first investment in the industry. Compared with other projects, mining coins generally have a cost price, which makes it easier for users to generate trust. At the same time, the cost of obtaining coins will be lower than the market, which is the preferred target of most conservative investors. the majority in the world.

  In addition, nearly 85% of bitcoins have been mined. The old coins no longer have advantages, and the mining pool computing resources are relatively concentrated. Small mining farms no longer have the advantage of competing for blocks. Instead, the new coins are future trends.   4.Cloud mining market demand and pain points   4.1 Mining demand drives the development of cloud mining   The era of huge profits in mining has passed. The core competitiveness of large mining industry and commerce is two: 1. Power resources; 2. Large-scale and professional maintenance level. In short, cost advantage and technical advantage. For large mining industry and commerce, relying on these two advantages to earn stable and reasonable profits is the demand for stable operation, so large mining industry and commerce are also willing to rent out their computing power in the era of non-profiteering mining, while for ordinary users , invest funds to share mining dividends and profits, and the two parties are connected, so the cloud computing power market is formed. The risk of speculating on coins (short-term trading to earn the price difference) is higher than that of coins (long-term bullishness). Cloud computing power brings a small amount of mining income to investors every day, and it is also controlling investors’ “frequent operations” in disguise. The market opportunity of cloud mining is that it provides individuals with a more “neutral” investment method. The threshold is lower than that of self-built mines, the risk is lower than short-term operations, and the cost is lower than market price purchases; it also allows mines to share costs and risks. Get better cash flow.   Compared with self-purchased mining machine mining, cloud mining has the following advantages:

1. Cloud mining does not require large-scale purchase of mining machines in the early stage, the financial burden is light, and the threshold is low.
2. Cloud mining has high stability and does not need to bear additional risks such as mining machine failure and performance loss.
3. Cloud mining does not require investment in post-maintenance costs

The in and out of cloud mining is flexible, and the risk of lock-up is minimized compared to mining mach

It is precisely because cloud mining has many of the above advantages and market demands that cloud mining has gradually become a highly sought after darling in the market.  

4.2 The Pain Points of Cloud Mining   There are currently three major pain points in the cloud mining market, mainly in three aspects: the opaque mining of cloud computing power, the lack of liquidity of cloud computing power, and the low utilization rate of cloud computing power funds.   The opacity of cloud computing mining is due to the fact that individual users buy the computing power of centralized miners. How users know the real computing power of the miners and the actual computing power of the purchased shares can only depend on the Miners’ trust. This will lead to the opacity of subsequent computing power gains, which may cause losses to participants.   If the revenue is not transparent, it is only a partial loss of revenue. A more serious problem is that the mining machine and computing power cannot be redeemed after the user pays, which will lead to greater personal losses. In addition, most ordinary users’ understanding of cloud computing power is not necessarily very accurate, and may be misled by concepts. For example, it will confuse Filcoin’s cloud space and effective storage computing power. Users may buy “cloud space” instead of generating income. “Effective Storage Computing Power”. This will also cause losses to users.   The reason for the lack of liquidity of cloud computing power is that the current “cloud computing power” is often purchased from a certain miner. If users have turnover needs, it is difficult to transfer, and often they can only be transferred under the same miner’s banner, and the operation The process is cumbersome, and cross-miner transfers are almost impossible.   The utilization rate of cloud computing power funds is not high, because after buying the “cloud computing power” shares, users can only wait for mining income, and can no longer use their assets to participate in other financial activities, and their capital utilization rate is not high.   5. Comparison of cloud mining projects and operation modes   For the business model of cloud mining, make a vertical comparison with different platform types of cloud mining, and make a horizontal comparison on different mining methods. Horizontal comparison：

  Vertical comparison：

  Mainstream platform comparison： Project Introduction   BitDeer：BitDeer opens the form of mining machine grouping, starting from one set, all investors can place orders on the platform with one click to enjoy cloud hosting services. The sales information on Xiaolu’s official website shows that the cloud-hosted mining machines are all real mining machines, and the model on sale is the Antminer S19 Pro, the world’s most efficient machine directly provided by the partner Bitmain. In the whole custody process, BitDeer packages and integrates upstream and downstream resources of mining machine manufacturers, mining farms, mining pools and other industrial chains for users, and provides all services online from mining machine procurement, mining farm hosting, mining pool docking to operation and maintenance management. , making the mining hosting service transparent.   GenesisMining：GenesisMining is one of the world’s leading hash power providers, offering cryptocurrency mining capabilities of varying scales, targeting newcomers, home miners interested in mining, and even large investors. Provides multi-algorithm, multi-currency cloud mining services using the latest technology - without any pool fees. GenesisMining guarantees “100% uninterrupted operation of equipment”. When the mining equipment crashes, slows down, or is completely damaged, GenesisMining’s software algorithm can ensure that other mining machines can be replaced immediately, avoiding any loss of computing power.   Ohash：The core asset of ohash is safe and stable high-quality computing power. In addition to well-known cooperative mining companies, mining pools are also extremely popular. The company’s goal is to allow everyone to benefit from the world’s top mining farms and to provide users with simple and safe mining services. The aggregation and distribution of computing power is the core function of ohash, which provides a vibrant and secure hash computing power market. ohash is user-friendly, providing users with faster, simpler and safer computing services, allowing users to You can quickly obtain the latest industry information, mining technology and large-scale industrial data centers.   Bitfufu：Bitfufu is an entity shared mining platform that leases the computing power of self-built mines and cooperative mines by time-sharing to allow users to mine easily. Mining machines are placed in professional mining machine hosting farms, and an enterprise-oriented and professional team is responsible for searching for low-cost energy, and managing and operating the mining machines without the need for users to worry about it. Bitfufu also includes a number of large-scale computing power suppliers that have been carefully selected and certified by the platform, and is committed to building a standardized computing power platform in the cloud computing power industry to provide customers with open, fair and transparent real mining services. The platform can greatly reduce mining costs through centralized procurement and joint co-construction mechanism. At the same time, it can access high-quality suppliers around the world. The price comparison of each merchant is transparent, and the decentralized method will release the profits of the intermediate links to the users to the greatest extent.   Nice hash：Nice hash aims to connect the decentralized buyers and sellers of computing power into one market. With punctual and stable payment, excellent customer service support, high security and system stability, NiceHash has become a leader in the cryptocurrency mining industry. a well-known brand. NiceHash is the largest cryptocurrency hashrate market in the world today, providing hashrate buyers with more than 20 different algorithms at any time. NiceHash also exists as an important system network. By providing support for the creation of new coins, providing transaction verification and transaction services for daily mining, NiceHash has become an important role in the cryptocurrency world.  

6.Cloud mining investment income   6.1Mining fees of different cloud computing products   In this chapter, Sirius Labs will analyze the cost and return on investment of various types of cloud computing mining.   After considering some risks, cloud computing mining has a certain cost advantage over buying coins. Especially when the currency price skyrockets, this cost advantage is particularly obvious. Because the cloud computing power contract is a standardized contract product, the price has a certain stability. The pricing of contract products will not be quickly adjusted in time with currency price fluctuations. This creates a low-risk arbitrage opportunity: continue to obtain BTC at a low price in the future through the cloud computing power contract, and sell it in advance at the current price higher than the current estimated cost in the contract exchange to profit. Since cloud computing power mining can lower the threshold for users to obtain digital currency, which is more cost-effective than buying coins directly on exchanges? ►Graph Mining cost  

6.2 Mining calculation cost Some of the factors that affect the return on investment in cloud mining. The most obvious is cost (which is why cloud companies are rated on price). The service charge includes electricity, storage and equipment charges. On the other hand, the decisive factor is the reputation and reliability of the company, since fraudulent schemes and bankruptcies prevail, then the profits do not exist. Profitability calculators (eg, Genesis modules) typically perform calculations based on electricity bills, an initial investment in hardware. In effect, it’s a combination of ongoing costs and a one-time investment.   In the case of personal mining, the ongoing cost is to pay the electricity bill, and the monthly mining fee can be entered in lieu of the electricity bill. This cost can be calculated as a monthly operating cost by multiplying the unit of electricity consumption and a conversion factor of 0.744 (energy per kWh in units per kWh) multiplied by a conversion factor of 0.744. However, for cloud computing fees, a different calculation is required, as the provider provides an (effective) monthly running cost. Therefore, users need to calculate the equivalent cost per kWh of cloud mining to input into the mining calculator. This is done by dividing the monthly running cost by a conversion factor of 0.744.   6.3 Mining cost of cloud computing products VS buying coins   In addition, since cloud computing power mining can lower the threshold for users to obtain digital currency, which is more cost-effective than buying coins directly on exchanges?   ►Graph: Mining cost of BitDeerffiVeryHash  

  7. The future development direction of cloud mining projects   Cloud mining products are emerging continuously. Mining is no longer a game for retail investors and non-professional miners. Cloud computing power is just the best way to realize that everyone can mine, and mining tends to be standardized. In the era of everyone mining, standardization and specialization are the general trend.   The business model of cloud computing power mining is progressive, but the current cloud computing power mining machine service platforms on the market generally have the problem of investment asset protection risks and weak services. Many organizations looking at the prospects of cloud computing services are also actively improving these problems.   The cloud computing power mining platform is bound to tend to a healthy and healthy development. Transparent industry standards and standardized operation systems can be achieved through decentralization; cooperation with high-quality mining farms and high-quality services throughout the whole process will become the core competitiveness of the platform to seize the market.   The future cloud mining platform has the following characteristics:   decentralization   The stability and reliability of the platform are the primary criteria for choosing a cloud mining project, followed by profitability and flexibility. This standard will also drive cloud mining projects to have opportunities in the future to appear on a decentralized security platform. It can avoid problems such as excessive concentration of computing power.   Tokenization of computing power   The tokenization of computing power means the emergence of a computing power market. Through the blockchain method, the computing power can be traded more transparently and conveniently, allowing users to participate in mining anytime, anywhere. At the same time, the features of general availability and appreciation will benefit the holders more, and will also turn the holders of tokens into mining users, achieving a real quantum leap. At present, there is no similar platform.   Combine with NFT:   Cloud mining platforms are currently at the edge of the blockchain field. In order to truly enter the mainstream, on the one hand, the industry does not have a high degree of user recognition of mining attributes, and on the other hand, the community atmosphere is insufficient. The platform can combine mainstream gameplay such as NFT to increase the recognition and stickiness of users, which will be more conducive to the development of the industry.     Decentralized governance:   At present, the vast majority of governance platforms in the market are centralized, which leads to a single model and greatly reduces user participation. In the future, the decentralized governance method may increase the category of mining projects, increase the gameplay of the project, and show the same activity as the trading platform.   8. Investment opportunities for cloud mining projects   It can be seen that it is very difficult for individuals to participate in mining for gold. But the times are constantly developing. The most subversive spirit of blockchain lies in decentralization and breaking the monopoly of centralization. The emergence of cloud computing power has made the general public see the hope of gold nuggets, and the era of personal mining will reappear. . According to the introduction, a large number of blockchain currency holders and new users will flock to this new track, and various mining projects and mining platforms will become hot spots.   In the selection of cloud mining projects, comprehensive consideration should be given to: One is security: after all, blockchain security is the first priority, whether it is the user’s personal information or the security of wallet assets, it is crucial;   The second is the interaction of operations: because cloud computing power mining involves mining machine computing power, mining farm management, mining pool data, wallet transfers, on-chain deposits and withdrawals, etc., these data are closely related; The third is product scalability: in all cycles, the cloud computing power product is a product that changes according to market changes. The price of mining machines is changing, the daily output of currency is changing, the currency price is changing, and the exchange rate is changing. Therefore, the scalability of the software is very important, which means whether you can make timely adjustments according to market changes, and be flexible in principle.   In terms of cloud mining platforms, the following characteristics are more attractive for investment:   1.Rich upstream and downstream resources, with physical mines as a guarantee; 2.The team has many years of experience in mining and blockchain projects; 3.The team has strong innovation ability and can quickly launch new gameplay; 4.Users can participate in governance and identify and launch various new projects; 5.Possess pass-through gameplay to ensure maximum user interests;   Although there are various opinions on the popular cloud mining companies, there is no doubt that the following companies play an important role in the mining ecosystem and have high investment value.